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Home Depot Vs Floor & Decor: Which Retail Stock Stands Taller?
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In the dynamic world of home improvement retail, two powerful players are vying for dominance, but with very different playbooks. The Home Depot Inc. (HD - Free Report) , the industry’s undisputed heavyweight, commands the market with unmatched scale, an expansive product mix and a deeply entrenched national presence. Floor & Decor (FND - Free Report) is a fast-moving challenger making waves with its focused, high-growth approach to hard surface flooring.
While Home Depot commands the lion’s share of the market with its vast scale and legacy strength, Floor & Decor is swiftly gaining ground, leveraging its niche expertise and focused business model, and expanding its footprint to outperform expectations. As HD doubles down on breadth and infrastructure, FND is winning with precision and agility.
As consumer preferences evolve and housing trends shift, the question looms large: Can specialization outpace scale? This face-off explores how the titans of scale and specialization are battling for market share and what it means for investors and the $1-trillion home improvement industry.
Decoding HD & FND’s Market Share & Positioning: Scale Vs Specialization
Home Depot is a behemoth. With $39.9 billion in first-quarter fiscal 2025 sales, more than 2,350 stores, and a 25% share of the U.S. home improvement market, HD operates across nearly every product category. Its market dominance spans both DIY and Pro segments, offering unmatched breadth and logistics. In contrast, Floor & Decor’s market share is a fraction of HD’s share, but its narrow focus on hard surface flooring — tiles, wood, stone and laminates — has positioned it as a category killer. With aggressive store expansion and high-single-digit comp growth, FND is punching well above its weight.
When comparing market share and key financial statistics, Home Depot maintains a clear and commanding lead over Floor & Decor in the U.S. home improvement landscape.
The Case for HD
Home Depot’s business strategy is anchored in its unmatched scale, expansive product assortment and seamless omnichannel integration. Serving both DIY consumers and professional contractors, HD leverages a vast store network and robust service offerings. This includes the company’s evolving Pro ecosystem, which has been significantly strengthened by the acquisition of SRS Distribution. The Home Depot brand is deeply associated with value, reliability and expertise, and continues to set the standard for in-store service and category leadership across all segments of the home improvement industry.
As it evolves into a truly interconnected retail powerhouse, Home Depot is bridging the physical and digital with remarkable efficiency. Its AI-powered tool, Magic Apron, brings the in-store associate experience online, contributing to an 8% increase in digital sales in first-quarter fiscal 2025.
Customers benefit from fast, flexible delivery, seamless order pickup, and tailored support whether shopping on mobile, desktop or in-store. For associates, tools like Pocket Guide and emerging generative AI capabilities deliver real-time access to product knowledge and operational insights, fueling better customer engagement and higher conversion rates.
Financially, HD remains a model of consistency and shareholder value. In first-quarter fiscal 2025, the company delivered a 31.3% return on invested capital (ROIC), distributed $2.3 billion in dividends and continued its steady pace of capital investment to drive growth. With an estimated $50 billion in deferred home improvement demand still untapped, Home Depot is exceptionally well-positioned to capitalize on the next wave of renovation and remodeling activity, especially as interest rates normalize and macroeconomic confidence rebounds.
Moreover, HD is strategically equipped to navigate global trade volatility and tariff pressure. More than 50% of its purchases are sourced domestically, and the company is aggressively diversifying its international supply base, ensuring that no single foreign country accounts for more than 10% of its sourcing. This sourcing agility, combined with HD’s scale and deep vendor relationships, enables the company to maintain pricing stability and protect margins.
Instead of passing costs on to consumers, HD is optimizing product assortments, driving productivity gains and using a portfolio-based approach to offset inflationary impacts, widening its competitive pricing edge in the marketplace.
The Case for FND
Floor & Decor is winning by doing one thing exceptionally well — hard surface flooring. Its specialized, high-volume model and warehouse-style stores enable low-cost operations and high inventory turns. FND appeals to Pro installers and style-conscious homeowners with curated, design-forward products at accessible prices. Its vertically integrated supply chain, direct sourcing and focus on value help differentiate the brand and drive repeat business. With aggressive store expansion plans, Floor & Decor is rapidly growing its footprint and market share.
FND is leaning into digital to complement its in-store experience. Tools like online visualizers, virtual design consultations and localized inventory checkers create a user-friendly, confidence-building journey for home renovators. While still scaling its digital sophistication compared with HD, its tech investments are focused and aligned with its high-engagement, style-first shopping experience. The company’s content-driven approach supports higher average ticket sizes and greater brand affinity among younger homeowners and design-focused buyers.
FND is a growth stock with strong upside potential. Floor & Decor consistently delivers double-digit revenue growth and healthy margins due to its focused category dominance. Its lean operations and product control enhance gross profit and reduce the dependency on third-party suppliers. Though still expanding, the company has shown strong execution in new markets, making it a compelling long-term investment for those seeking exposure to specialty retail within the home improvement sector.
Tariff risks are real for Floor & Decor, given its reliance on imported flooring materials. However, the company’s direct sourcing model and strong supplier relationships provide levers to mitigate cost inflation. FND has historically demonstrated an ability to adjust product mix, source from alternative countries and optimize assortments in response to cost pressures. While it may not have HD’s scale advantage, its focused product strategy and price-sensitive customer base push the company to remain nimble and transparent in managing pricing. If tariffs persist or expand, Floor & Decor’s ability to maintain value leadership and manage cost through vertical integration will be critical.
How Does Zacks Consensus Estimate Compare for HD & FND?
Home Depot’s fiscal 2025 revenues are projected to grow 2.9% year over year to $164.1 billion and EPS is expected to decline 1.4% year over year to $15.03. HD’s EPS estimates for fiscal 2025 inched up 0.2% in the last seven days. Home Depot’s annual sales and earnings are slated to increase 4.4% and 9.7% year over year, respectively, in fiscal 2026.
HD’s Estimate Revision Trend
Image Source: Zacks Investment Research
Floor & Decor’s 2025 sales are expected to increase 5.9% year over year to $4.7 billion and EPS is anticipated to decline 0.5% to $1.84. FND’s EPS estimates for 2025 have moved down 7.5% in the past 30 days. Floor & Decor’s annual sales and earnings are slated to increase 10.6% and 21.3% year over year, respectively, in 2026.
FND’s Estimate Revision Trend
Image Source: Zacks Investment Research
This clearly illustrates that Home Depot has witnessed upward estimate revisions in the past seven days following its earnings release on May 20. However, Floor & Decor’s consensus estimates reflected a significant decline in the last 30 days.
Price Performance & Valuation Comparisons of HD & FND
In the last year, the HD stock had the edge in terms of performance, having recorded a total return of 12.7%, including dividends. This has noticeably outpaced the benchmark S&P 500’s return of 10.1% and Floor & Decor’s 35% decline.
One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Home Depot trades at a forward price-to-earnings (P/E) multiple of 23.69X, which is above its 5-year median of 22.28X. However, the HD stock trades below Floor & Décor’s multiple of 37.22X and a 5-year median of 43.63X.
Image Source: Zacks Investment Research
At current levels, Home Depot’s stock appears undervalued relative to Floor & Decor, offering a compelling opportunity for long-term investors. Despite its modest valuation, HD’s pricing reflects strong fundamentals, anchored by deep alignment with Pro customers, a well-established and trusted private-label portfolio, and its continued dominance in the home improvement sector. With strategic investments in supply-chain efficiency, digital innovation and professional services, Home Depot is well-positioned to drive sustainable growth and further solidify its leadership.
In contrast, Floor & Decor’s stock appears stretched from a valuation standpoint. While the company boasts strong top-line growth and a promising niche focus, its current market pricing may be running ahead of earnings potential, especially given its narrower customer base, operational scale and exposure to macroeconomic volatility.
Dividend Analysis: HD & FND
Home Depot stands out as a reliable dividend payer, returning $2.3 billion in first-quarter fiscal 2025 alone, with a yield typically between 2.5% and 3%, backed by strong cash flow and a 31.3% ROIC. Floor & Decor, by contrast, does not pay dividends, opting instead to reinvest aggressively in growth and expansion. HD appeals to income-focused investors, while FND targets those seeking capital appreciation over cash returns.
Home Depot offers a dividend yield of 2.48%, supported by a payout ratio of 59%, signaling a balance between rewarding shareholders and reinvesting in the business. HD has a five-year dividend growth rate of 10.6%. (Check HD’s dividend history here)
The Verdict
In the battle for dominance in the $1-trillion home improvement market, Home Depot stands out as the clear winner, leveraging its unmatched scale, resilient business model and proven ability to adapt. While Floor & Decor continues to impress with category-specific growth and strategic focus, the broader picture favors Home Depot.
HD’s strong one-year total return, attractive valuation and consistent dividend payouts, along with strategic investments in digital innovation and Pro ecosystem expansion, reinforce its leadership position. Also, estimate revisions for HD have trended upward following its latest earnings report, reflecting growing optimism about its earnings potential. Meanwhile, FND’s downward revisions raise caution despite its long-term growth narrative.
In the battle of specialization versus scale, Home Depot wins on execution, value and investor confidence, making it the more promising bet for long-term outperformance in the home improvement sector. Home Depot currently carries a Zacks Rank #3 (Hold), while Floor & Decor has a Zacks Rank #4 (Sell).
Image: Bigstock
Home Depot Vs Floor & Decor: Which Retail Stock Stands Taller?
In the dynamic world of home improvement retail, two powerful players are vying for dominance, but with very different playbooks. The Home Depot Inc. (HD - Free Report) , the industry’s undisputed heavyweight, commands the market with unmatched scale, an expansive product mix and a deeply entrenched national presence. Floor & Decor (FND - Free Report) is a fast-moving challenger making waves with its focused, high-growth approach to hard surface flooring.
While Home Depot commands the lion’s share of the market with its vast scale and legacy strength, Floor & Decor is swiftly gaining ground, leveraging its niche expertise and focused business model, and expanding its footprint to outperform expectations. As HD doubles down on breadth and infrastructure, FND is winning with precision and agility.
As consumer preferences evolve and housing trends shift, the question looms large: Can specialization outpace scale? This face-off explores how the titans of scale and specialization are battling for market share and what it means for investors and the $1-trillion home improvement industry.
Decoding HD & FND’s Market Share & Positioning: Scale Vs Specialization
Home Depot is a behemoth. With $39.9 billion in first-quarter fiscal 2025 sales, more than 2,350 stores, and a 25% share of the U.S. home improvement market, HD operates across nearly every product category. Its market dominance spans both DIY and Pro segments, offering unmatched breadth and logistics. In contrast, Floor & Decor’s market share is a fraction of HD’s share, but its narrow focus on hard surface flooring — tiles, wood, stone and laminates — has positioned it as a category killer. With aggressive store expansion and high-single-digit comp growth, FND is punching well above its weight.
When comparing market share and key financial statistics, Home Depot maintains a clear and commanding lead over Floor & Decor in the U.S. home improvement landscape.
The Case for HD
Home Depot’s business strategy is anchored in its unmatched scale, expansive product assortment and seamless omnichannel integration. Serving both DIY consumers and professional contractors, HD leverages a vast store network and robust service offerings. This includes the company’s evolving Pro ecosystem, which has been significantly strengthened by the acquisition of SRS Distribution. The Home Depot brand is deeply associated with value, reliability and expertise, and continues to set the standard for in-store service and category leadership across all segments of the home improvement industry.
As it evolves into a truly interconnected retail powerhouse, Home Depot is bridging the physical and digital with remarkable efficiency. Its AI-powered tool, Magic Apron, brings the in-store associate experience online, contributing to an 8% increase in digital sales in first-quarter fiscal 2025.
Customers benefit from fast, flexible delivery, seamless order pickup, and tailored support whether shopping on mobile, desktop or in-store. For associates, tools like Pocket Guide and emerging generative AI capabilities deliver real-time access to product knowledge and operational insights, fueling better customer engagement and higher conversion rates.
Financially, HD remains a model of consistency and shareholder value. In first-quarter fiscal 2025, the company delivered a 31.3% return on invested capital (ROIC), distributed $2.3 billion in dividends and continued its steady pace of capital investment to drive growth. With an estimated $50 billion in deferred home improvement demand still untapped, Home Depot is exceptionally well-positioned to capitalize on the next wave of renovation and remodeling activity, especially as interest rates normalize and macroeconomic confidence rebounds.
Moreover, HD is strategically equipped to navigate global trade volatility and tariff pressure. More than 50% of its purchases are sourced domestically, and the company is aggressively diversifying its international supply base, ensuring that no single foreign country accounts for more than 10% of its sourcing. This sourcing agility, combined with HD’s scale and deep vendor relationships, enables the company to maintain pricing stability and protect margins.
Instead of passing costs on to consumers, HD is optimizing product assortments, driving productivity gains and using a portfolio-based approach to offset inflationary impacts, widening its competitive pricing edge in the marketplace.
The Case for FND
Floor & Decor is winning by doing one thing exceptionally well — hard surface flooring. Its specialized, high-volume model and warehouse-style stores enable low-cost operations and high inventory turns. FND appeals to Pro installers and style-conscious homeowners with curated, design-forward products at accessible prices. Its vertically integrated supply chain, direct sourcing and focus on value help differentiate the brand and drive repeat business. With aggressive store expansion plans, Floor & Decor is rapidly growing its footprint and market share.
FND is leaning into digital to complement its in-store experience. Tools like online visualizers, virtual design consultations and localized inventory checkers create a user-friendly, confidence-building journey for home renovators. While still scaling its digital sophistication compared with HD, its tech investments are focused and aligned with its high-engagement, style-first shopping experience. The company’s content-driven approach supports higher average ticket sizes and greater brand affinity among younger homeowners and design-focused buyers.
FND is a growth stock with strong upside potential. Floor & Decor consistently delivers double-digit revenue growth and healthy margins due to its focused category dominance. Its lean operations and product control enhance gross profit and reduce the dependency on third-party suppliers. Though still expanding, the company has shown strong execution in new markets, making it a compelling long-term investment for those seeking exposure to specialty retail within the home improvement sector.
Tariff risks are real for Floor & Decor, given its reliance on imported flooring materials. However, the company’s direct sourcing model and strong supplier relationships provide levers to mitigate cost inflation. FND has historically demonstrated an ability to adjust product mix, source from alternative countries and optimize assortments in response to cost pressures. While it may not have HD’s scale advantage, its focused product strategy and price-sensitive customer base push the company to remain nimble and transparent in managing pricing. If tariffs persist or expand, Floor & Decor’s ability to maintain value leadership and manage cost through vertical integration will be critical.
How Does Zacks Consensus Estimate Compare for HD & FND?
Home Depot’s fiscal 2025 revenues are projected to grow 2.9% year over year to $164.1 billion and EPS is expected to decline 1.4% year over year to $15.03. HD’s EPS estimates for fiscal 2025 inched up 0.2% in the last seven days. Home Depot’s annual sales and earnings are slated to increase 4.4% and 9.7% year over year, respectively, in fiscal 2026.
HD’s Estimate Revision Trend
Image Source: Zacks Investment Research
Floor & Decor’s 2025 sales are expected to increase 5.9% year over year to $4.7 billion and EPS is anticipated to decline 0.5% to $1.84. FND’s EPS estimates for 2025 have moved down 7.5% in the past 30 days. Floor & Decor’s annual sales and earnings are slated to increase 10.6% and 21.3% year over year, respectively, in 2026.
FND’s Estimate Revision Trend
Image Source: Zacks Investment Research
This clearly illustrates that Home Depot has witnessed upward estimate revisions in the past seven days following its earnings release on May 20. However, Floor & Decor’s consensus estimates reflected a significant decline in the last 30 days.
Price Performance & Valuation Comparisons of HD & FND
In the last year, the HD stock had the edge in terms of performance, having recorded a total return of 12.7%, including dividends. This has noticeably outpaced the benchmark S&P 500’s return of 10.1% and Floor & Decor’s 35% decline.
One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Home Depot trades at a forward price-to-earnings (P/E) multiple of 23.69X, which is above its 5-year median of 22.28X. However, the HD stock trades below Floor & Décor’s multiple of 37.22X and a 5-year median of 43.63X.
Image Source: Zacks Investment Research
At current levels, Home Depot’s stock appears undervalued relative to Floor & Decor, offering a compelling opportunity for long-term investors. Despite its modest valuation, HD’s pricing reflects strong fundamentals, anchored by deep alignment with Pro customers, a well-established and trusted private-label portfolio, and its continued dominance in the home improvement sector. With strategic investments in supply-chain efficiency, digital innovation and professional services, Home Depot is well-positioned to drive sustainable growth and further solidify its leadership.
In contrast, Floor & Decor’s stock appears stretched from a valuation standpoint. While the company boasts strong top-line growth and a promising niche focus, its current market pricing may be running ahead of earnings potential, especially given its narrower customer base, operational scale and exposure to macroeconomic volatility.
Dividend Analysis: HD & FND
Home Depot stands out as a reliable dividend payer, returning $2.3 billion in first-quarter fiscal 2025 alone, with a yield typically between 2.5% and 3%, backed by strong cash flow and a 31.3% ROIC. Floor & Decor, by contrast, does not pay dividends, opting instead to reinvest aggressively in growth and expansion. HD appeals to income-focused investors, while FND targets those seeking capital appreciation over cash returns.
Home Depot offers a dividend yield of 2.48%, supported by a payout ratio of 59%, signaling a balance between rewarding shareholders and reinvesting in the business. HD has a five-year dividend growth rate of 10.6%. (Check HD’s dividend history here)
The Verdict
In the battle for dominance in the $1-trillion home improvement market, Home Depot stands out as the clear winner, leveraging its unmatched scale, resilient business model and proven ability to adapt. While Floor & Decor continues to impress with category-specific growth and strategic focus, the broader picture favors Home Depot.
HD’s strong one-year total return, attractive valuation and consistent dividend payouts, along with strategic investments in digital innovation and Pro ecosystem expansion, reinforce its leadership position. Also, estimate revisions for HD have trended upward following its latest earnings report, reflecting growing optimism about its earnings potential. Meanwhile, FND’s downward revisions raise caution despite its long-term growth narrative.
In the battle of specialization versus scale, Home Depot wins on execution, value and investor confidence, making it the more promising bet for long-term outperformance in the home improvement sector. Home Depot currently carries a Zacks Rank #3 (Hold), while Floor & Decor has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.