Why This Matters to Distributors: Lowe’s is closing the service gaps that have long protected distributor relationships with small contractors. Faster quoting, free same-day delivery, AI-powered product guidance and a $250 million trades workforce investment are all aimed at the same customer. Distributors whose advantage rests on speed, local expertise and contractor trust now face a better-capitalized competitor investing directly in those same differentiators.
Lowe’s Cos. posted its fourth consecutive quarter of positive comparable sales growth in Q1 fiscal 2026, and the home improvement retailer used its earnings call Tuesday to signal a deeper push into professional contractor services — the customer segment wholesale distributors in electrical, plumbing, HVAC and building materials have long considered their own.
The Mooresville, N.C.-based company reported Q1 net sales of $23.1 billion, up 10.3% from the year-earlier period. Comparable sales increased 0.6%. Adjusted diluted earnings per share rose 3.8% to $3.03. Lowe’s affirmed its fiscal 2026 outlook of $92 billion to $94 billion in total sales and adjusted diluted earnings per share of $12.25 to $12.75.
Pro delivered positive comparable sales for the quarter. CEO Marvin Ellison attributed the performance to in-stock discipline, national brand depth, and the continued resonance of the MyLowe’s Pro Rewards loyalty program among small and medium-sized contractors. “We maintain our momentum with our competitive assortment of national brands, consistent strong in-stock position and outstanding service levels,” Ellison said.
The most operationally significant Pro development in the quarter was the launch of a new AI-powered quoting tool called Materials List. Contractors submit a materials list in any format — photo, handwritten note, PDF, or spreadsheet — and Lowe’s associates convert it into a quote. “In the past, this was a manual task, which meant generating these quotes could take days,” said Joseph McFarland, executive vice president of stores. “Now with this AI-enabled tool, we’ve reduced that time from days to minutes.”
The capability is a direct challenge to one of wholesale distribution’s most durable competitive advantages. Electrical, plumbing and HVAC distributors have long outpaced big-box retailers on the speed and precision of complex contractor quoting. Lowe’s is compressing that gap with machine intelligence.
The broader AI deployment reinforces the pressure. Mylow, the company’s AI-powered shopping assistant built on OpenAI’s platform, now handles more than 1 million customer inquiries per month. The conversion rate for online customers who use Mylow is triple that of customers who do not. “A well-designed agentic AI experience can be a clear driver in the purchasing decision,” Ellison said. The in-store associate version, Mylow Companion, surpassed 5 million questions since launch and produced a 200-basis-point improvement in customer satisfaction scores, according to the company.
Online sales grew 15.5% in the quarter. Lowe’s also began offering free same-day delivery for purchases over $25 to MyLowe’s Rewards and MyLowe’s Pro Rewards members — a fulfillment move that narrows the response-time edge local distributors have held on routine contractor replenishment.
In building products, rough plumbing, and electrical drove standout results, particularly with the core small to medium Pro. Those two categories anchor the revenue base for electrical and PHCP wholesale distributors. Millwork posted positive comps again, driven by windows and doors. HVAC and water heaters also showed strength, supported by Lowe’s Home Services installation offering.
The most consequential long-term signal for the distribution industry was Lowe’s $250 million commitment through the Lowe’s Foundation to train approximately 250,000 skilled tradespeople. The investment addresses a labor constraint Lowe’s Pro customers have raised directly. “Our Pro customers are at the forefront of this growing demand, and we hear from them directly about the difficulty in hiring trained workers to fill out their crews,” McFarland said. “This is one of the most critical challenges facing the home improvement industry.”
Wholesale distributors operate in the same contractor ecosystem. A larger, better-trained trades workforce expands the addressable market for both Lowe’s and its distributor competitors — but it also deepens Lowe’s embedded relationship with the contractor base it is systematically cultivating.
Lowe’s continued integrating Foundation Building Materials and Allied Drywall Group, acquired to build what the company calls an interior solutions platform for residential and commercial builders. Ellison estimated 12 million new homes will be needed by 2033, a market he said has historically generated zero Lowe’s revenue. Integration is on track, with cost synergies being extracted in drywall, steel, and insulation procurement. FBM’s commercial business (winning data center, stadium, and municipal contracts) provided a cushion against continued softness in residential new construction.
The broader home improvement market remained under pressure. Ellison called the current housing environment the most difficult since the financial crisis. Comparable transactions declined 0.9%, and DIY discretionary demand continued to lag. But the structural build Lowe’s has executed around Pro — faster quoting, expanded fulfillment, AI-embedded workflows and now a nine-figure investment in the trades workforce — raises the competitive stakes for distributors serving the same contractor.
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