The news: Lowe’s is acquiring Foundation Building Materials (FBM) for approximately $8.8 billion.

The North American distributor of interior building products generated roughly $6.5 billion in revenues in 2024 on a pro forma basis and operates more than 370 locations across the US and Canada, serving 40,000 Pro customers. Its business spans both new construction and repair/remodel applications.

The context: The deal builds on Lowe’s broader push to strengthen its Pro segment, which offers a more stable revenue stream in a challenging retail environment. Recent moves include:

• The $1.33 billion acquisition of Artisan Design Group, which runs 132 distribution, design, and service facilities specializing in flooring, cabinets, and countertops for homebuilders and property managers.
• A revamp of the MyLowe’s Pro Rewards loyalty program to deliver perks, simpler redemptions, and 5% daily savings for credit cardholders.

The strategy: CEO Marvin Ellison has repeatedly emphasized the importance of broadening Lowe’s Pro business. His plan is to capture a larger share of the expected 18 million new homes needed in the US by 2033. With new construction projected to be a major driver of Pro spend over the next decade, FBM’s footprint and relationships should help Lowe’s scale quickly.

Zooming in: The acquisition news dovetailed with the release of Lowe’s Q2 results; the home improvement retailer beat Wall Street profit expectations.

• Earnings per share were $4.33, up 5.6% YoY, outpacing the $4.24 analysts expected.
• Revenues were $23.96 billion, up 1.6% YoY and in line with expectations.

The retailer also revised its full-year outlook to reflect the acquisition of Artisan Design Group.

• While it said its “core business performance in fiscal 2025 remains unchanged,” it now expects total sales of $84.5 billion to $85.5 billion, an increase from its previous range of $83.5 billion to $84.5 billion.
• It reiterated its outlook for comparable sales, saying they will be flat to up 1% from the prior year.
• It expects earnings per share for the year of approximately $12.10 to $12.35, down slightly from its prior range of $12.15 to $12.40.

Our take: Lowe’s is playing the long game. By doubling down on Pro customers, the retailer is building a buffer against consumer caution and the frozen housing market. FBM’s scale positions Lowe’s to capture long-term share as construction rebounds, and the raised sales guidance signals confidence that its Pro-focused playbook is already delivering results.

That stands in contrast to Home Depot, which recently fell short of both revenue and earnings expectations for the first time in a decade. While Home Depot has leaned into its Pro business as well, tariffs, elevated housing costs, and labor pressures are weighing on its results. Lowe’s acquisitions and investments could give it an edge in weathering near-term headwinds and winning share from contractors and builders who will be critical growth drivers over the next decade.