The Home Depot is accelerating its push into wholesale distribution, using digital tools and acquisitions to cement its position as a key supplier for professional contractors.
On its second-quarter earnings call, CEO Ted Decker pointed to gains in the company’s “Pro ecosystem,” a suite of services aimed at streamlining purchasing and fulfillment for contractors who account for nearly half of Home Depot’s revenue. “We are growing market share with these initiatives,” Decker said.
Technology plays a significant role. Home Depot has rolled out an order management system that lets contractors reserve inventory, adjust orders before fulfillment, and invoice upon delivery—capabilities that mirror the workflows of large distributors. The retailer is also expanding its trade credit program, which Campbell said has produced “double-digit lifts in spending” across digital and in-store channels.
Logistics upgrades are another piece of the strategy. By applying machine learning to optimize routing and inventory, Home Depot is offering faster job-site delivery, with same-day and next-day service now available for more products. Contractors using the service spend more and buy more often, according to the company.
Acquisitions are giving Home Depot additional distribution heft. The integration of SRS Distribution, a specialty building products wholesaler acquired earlier this year, has already exceeded expectations, driving new revenue and cross-selling opportunities. Now, Home Depot is moving to acquire GMS, a major distributor of interior building products, in a deal valued at $4.3 billion.
If approved, the transaction will expand Home Depot’s wholesale footprint to more than 1,200 locations and 8,000 trucks, positioning the company among the largest players in professional building materials distribution. Decker called the acquisition “additive to our organic efforts to better serve Pros working on complex projects,” giving the company broader assortments and more fulfillment options.
The pivot comes as Home Depot leans further into contractor-heavy categories such as lumber, concrete, and decking. “We continue to see strength in Pro-heavy categories,” said Billy Bastek, executive vice president of merchandising.
Financially, the company reported modest growth. Sales for the quarter ending July 28 rose 4.9% to $45.3 billion, up from $43.2 billion a year ago, while net income was flat at $4.55 billion. First-half sales increased 7% to $85.1 billion, though net income fell 2.2% to $7.98 billion.
With retail growth slowing, Home Depot is betting on wholesale distribution to drive its next phase of expansion, blending scale, logistics, and technology to capture more of the professional construction market.
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