Track Your Operation’s Progress

Looking at how fellow independent home improvement operators are performing throughout the year gives retailers in the channel a benchmark to make improvements to their own operations.

Since 2022, the North American Hardware and Paint Association (NHPA) has partnered with The Farnsworth Group to produce the Quarterly Independent Performance Report, which tracks key performance metrics.

The most recent Quarterly Independent Performance Report offers insight into how retailers are performing amid continued economic uncertainty. NHPA chief operating officer Dan Tratensek shares where the industry stands as of the second quarter of 2026, noting a pulse of cautious optimism as the year comes to a close.

“As we are starting to see Q2 numbers come in, they are roughly in line with what we had expected to see. Home Depot, Lowe’s and Ace Hardware all posted strong revenue growth during the quarter but are still middling along in terms of comp-store sales,” Tratensek says.

Ace’s comp-store sales for Q2 were only 1.1%, while Home Depot was practically a mirror image of this performance, registering Q2 comps of 1.3% for domestic stores. Lowe’s comps trailed the field, only posting slightly positive Q2 comps at just 0.2%. The positive comps for Ace and Home Depot were driven primarily by higher ticket sizes during the period. For Ace, average ticket was up 3.1%, while it increased 2.8% at Home Depot. Similarly, Lowe’s said transaction size increased 2.3% during the period. All of the companies continued to struggle with store traffic yet again, with Ace transaction count down 1.9% and Home Depot off by 1.0% from a year earlier and Lowe’s seeing a 2.1% dip in count.

For overall revenue, Ace and Home Depot posted similar results, with Ace reporting a 5.9% increase for the quarter and Home Depot clocking in with a 5.7% increase. Lowe’s had a stronger quarter for overall revenue, recording an 8.3% topline growth, with much of that positive momentum being influenced by its recent acquisitions.

Ace’s overall revenue gains were driven by wholesale performance and new store conversions/openings during the period. Ace indicated that stores activated from January 2025 through June 2026 contributed $67.2 million in incremental wholesale revenue during Q2. Ace opened 34 domestic stores and canceled 17 during the quarter, finishing with 5,283 domestic stores—88 more than a year earlier.

“According to their own reports, Ace sales were buoyed by strong performance in grilling, outdoor power, paint and impulse items. While these are typical high-volume items during the peak late spring/summer months, they are also indicative of Ace’s retail store focus. As we are still experiencing somewhat of a K-shaped economy right now, it likely isn’t hurting Ace that they primarily service more affluent, suburban locations and have little LBM, commodity sales through the network. Even taking that into consideration, Ace did report that it had slightly stronger sales to pro and lumber customers during Q2,” Tratensek says.

This same assertion was made by both Home Depot and Lowe’s, who both indicated that slightly accelerated pro purchases were a strong factor in their comp increases.

As a sign that some stagnation in bigger ticket purchases might be breaking, Home Depot reported that transactions over $1,000 had increased by 2.4% during the quarter but also noted that they see continued pressure on “large discretionary purchases” for the foreseeable future.

“Independent retailers in general reported a relatively stronger Q2 while echoing much of what we see in the Ace and Home Depot financial filings. While NHPA / The Farnsworth Group’s Quarterly Independent Performance Report showed localized sales increases, in some cases in double digits, the overall theme was similar to what we are seeing in the broader picture. Slow, modest growth is being driven by ticket size,” Tratensek says.

Retailers responding to the Quarterly Independent Performance Report survey indicated that they were seeing a slight rebound in transaction counts during the period. As the year plays out, future data will show if this is actually an inflection point in the downward traffic spiral or simply an anomaly driven by regional variations.

As far as predictions for the balance of the year, while some organizations like Cleveland Research are predicting a relatively flat performance for 2026, Home Depot reaffirmed its full-year guidance of overall revenue being up 2.5-4.5% and comp-store sales projecting at flat to up 2.0%. Lowe’s, however, lowered its full-year guidance, indicating that it was likely the company will finish the year with flat comp-store sales, down from its most recent projection of flat to up 2%.

“What all this suggests is that neither Home Depot nor Lowe’s are anticipating a strong second half of the year to drive sales improvement,” Tratensek says. “NHPA is still holding to its earlier predictions of the industry being up in the low 2.0% range for the year. The Home Improvement Research Institute also recently revised its 2026 forecast for industry growth and is currently predicting that the industry will see a modest 2.6% increase this year.”

In somewhat of a contrast to the numbers we are seeing from retail, the U.S. Census Bureau numbers showed the building materials segment up 4.6% through July. While some variations in performance are to be expected because of the different ways organizations look at the industry, this number feels particularly strong given the reporting we are seeing from the actual ground.

“One notable point to bring up from what we are seeing with Ace is that Q2 digital sales grew by a robust 12.8% and across management they say this is an intentional focus that they hope to continue leaning into,” Tratensek says. That growth comes as Ace continues to invest in customer data, RedVest Media and consumer-facing digital marketing, all of which are increasingly important components of its broader digital strategy.”

On the digital and fulfillment front, Home Depot just announced the nationwide rollout of Express Delivery, offering delivery on eligible products in three hours or less for a small flat fee. The company also separately offers free same-day delivery on qualifying orders of $25 or more placed by 4 p.m.

“It’s important to note, at least, that among Ace, Home Depot and Lowe’s, Lowe’s posted the strongest Q2 digital growth, indicating that online sales during the period were up 15.7% for the quarter.”

Changes in Transaction Count – YoY by Quarter

In Q2, 37% of independent retailers reported a year over year increase in transaction counts, up 14 percentage points from Q1 and 10 percentage points from Q2 2025. Average transaction counts increased 3.7%, reversing the 1.1% decline in Q1 and the strongest result in the past two years. 

Changes in Transaction Size – YoY by Quarter

Nearly half of independent retailers reported a year over year increase in transaction size in Q2, down 12 percentage points from Q1 but up 3 percentage points from Q2 2025. Average transaction size increased 2.5%, easing from 3.3% in Q1 but remaining above the 1.1% increase reported in Q2 2025.