Most retailers make their year around Christmas, but the festive season for home improvement is just winding down. This week’s second‑quarter results for Home Depot and Lowe’s, plus figures released two weeks ago by Floor & Decor, are set for a muted celebration. Earnings‑per‑share expectations for the two big‑box giants are down about 11% each for the period since last summer.

These results mean the three companies’ shares have underperformed the S&P 500 by 35‑50 percentage points in the past year, casting doubt on the hoped‑for recovery that was expected to lift same‑store sales growth, making the celebration less festive.

The slowdown is tied to a stagnant housing market, as sales of existing homes, a key driver of improvement spending, have stalled, keeping growth near zero for the year.

The surge in mid‑2020 through mid‑2022, fueled by pandemic‑era savings, remote‑work home upgrades, and the lowest mortgage rates in history, created a golden era for home improvement. However, the expected rebound now meets new headwinds that will keep same‑store sales growth around zero this year. The lingering effects of the pandemic and the recent rise in borrowing costs further dampen demand, reinforcing the muted outlook. This stagnation reduces the pool of homeowners able to fund remodeling projects, further suppressing spending.