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From Store to Site: How Home Depot Is Reinventing Fulfillment

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Key Takeaways

  • Home Depot is building an interconnected fulfillment network, connecting stores, digital and job sites.
  • AI-powered delivery routing and added Order Fulfillment Associates are boosting speed and accuracy.
  • Integration of SRS and planned GMS deal will expand distribution and strengthen Pro customer reach.

The Home Depot Inc. (HD - Free Report) is transforming its fulfillment model from a traditional retail network into an interconnected ecosystem that seamlessly links stores, digital platforms and job sites. In its second-quarter fiscal 2025 earnings call, management highlighted that stores remain the “center of the ecosystem,” acting as both customer hubs and fulfillment nodes. 

The company’s machine learning-driven “ship from best location” system determines the most efficient delivery route, enabling record-breaking same-day and next-day speeds. These investments are paying off as customers using faster delivery options are spending more frequently both in-store and online.

To support this surge in demand, Home Depot has added Order Fulfillment Associates across stores and enhanced their mobile tools to prioritize and batch-pick orders. These upgrades have improved accuracy and reduced turnaround times, driving higher satisfaction. The company is also optimizing freight flow, improving shelf availability and deploying a sophisticated order management system that allows modifications, jobsite deliveries and invoicing upon receipt. These features are crucial for professional contractors managing complex projects.

Home Depot’s fulfillment reinvention extends beyond logistics to ecosystem expansion. The integration of SRS and the planned acquisition of GMS will create a vast distribution network spanning more than a thousand locations and thousands of delivery vehicles. Together, these assets will deepen Home Depot’s reach into specialty trades, offering a broader product mix and faster site-to-store service. By blending physical scale, technology and Pro-focused capabilities, Home Depot is redefining home improvement fulfillment for the digital era.

HD’s Peers: How LOW & FND Compete in the Fulfillment Race

Lowe’s Companies Inc. (LOW - Free Report) and Floor & Decor Holdings, Inc. (FND - Free Report) are intensifying their push to modernize fulfillment, deploying new technologies and distribution models to close the gap with Home Depot in the race for faster, more efficient delivery and customer convenience.

Lowe’s is reshaping its fulfillment model through the acquisition of Foundation Building Materials (“FBM”), a move designed to strengthen its Total Home strategy and accelerate Pro customer growth. By integrating FBM’s 370-branch network and advanced logistics, Lowe’s can deliver faster, more efficient job site fulfillment, particularly in high-density regions like California and the Northeast. The acquisition also brings cutting-edge tools such as the myFBM mobile app and AI Blueprint Takeoff technology, enhancing order accuracy, delivery tracking, and speed for both large and mid-sized Pro customers.

Floor & Decor is expanding its fulfillment reach by blending warehouse efficiency with customer-focused innovation. The retailer’s growing network of 257 warehouse-format stores and five design studios acts as both sales and distribution hubs, enabling faster delivery of in-stock flooring and installation products. Its multi-channel model integrates e-commerce and in-store fulfillment, ensuring pros and homeowners receive on-time, reliable access to materials for renovation and construction projects.

Zacks Rundown for HD

Home Depot’s shares have lost 8.7% in the past year compared with the industry’s decline of 12.8%.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

From a valuation standpoint, HD trades at a forward price-to-earnings ratio of 23.88X, higher than the industry’s 21.02X.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

The Zacks Consensus Estimate for Home Depot’s fiscal 2025 earnings implies a year-over-year decline of 1.5%, while that for fiscal 2026 indicates growth of 8.3%. Earnings estimates for fiscal 2025 have been unchanged in the past 30 days.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

HD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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