Paint and Wallpaper Stores NAICS 444120

Nov 24, 2025 - Top Home Improvement Players Notch Tougher Q3

• Home Depot and Lowe’s faced headwinds in the third quarter as housing market weakness and economic uncertainty dampened home improvement demand, according to Retail Dive. Home Depot’s net sales rose 2.8% over Q3 2024, boosted by its $900 million acquisition of GMS, but net income fell 1.3%. Comparable sales were nearly flat. Lowe’s reported a 3% year-over-year sales increase, with gains in pro sales, home services, and online purchases, though net income fell 4.7%. Both retailers cited weaker demand for large discretionary projects and revised their outlooks downward. Each continues to target professional customers, with Home Depot acquiring GMS and Lowe’s planning to acquire Foundation Building Materials. The sector remains pressured by cautious consumers and limited housing activity. Home center sales activity is a bellwether for home improvement spending, which drives demand for paint and wallpaper stores.
• Netherlands-based AkzoNobel, maker of Dulux paint, plans to merge with Philadelphia's Axalta Coating Systems in a $25 billion deal that will create one of the largest global coatings companies, according to Reuters. The combined group, expected to generate $17 billion in annual revenue and $600 million in cost savings, will focus heavily on coatings, which are more resilient in consumer downturns than decorative paints. For paint retailers, the merger signals intensified competition, streamlined product portfolios, and potential margin pressure as the new company leverages scale to cut costs and boost profitability. The deal positions the company to leverage retail channels, offering higher-margin products and greater efficiency. The consolidation underscores ongoing industry pressures from tariffs, rising costs, and shifts in demand.

• Home remodeling spending is expected to remain stable for the rest of this year and through mid-2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in October by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 1.9% to $511 billion in the fourth quarter of 2025, compared to Q4 2024. In the first quarter of 2026, remodeling spending will reach $524 billion, up 2.4% from Q1 2025. Spending will then moderate to $519 billion in Q2 2026, up 2.1% from Q2 2025. In the third quarter of 2026, year-over-year spending is forecast to rise 1.9% to $517 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and economic uncertainty.
• America’s largest homebuilders are struggling to sell new homes despite offering 4% mortgages and deep discounts, according to The Wall Street Journal. D.R. Horton and Lennar have slashed prices and added incentives, but demand remains weak, pushing unsold inventory to levels last seen in 2009. Builders are slowing construction, with D.R. Horton cutting starts by 21% year over year for the three-month period through September. Regional gluts in Texas, Florida, Southern California, and Washington, DC reflect rising resale competition, fewer foreign buyers, and economic uncertainty. Investor activity is at a 15-year low, with institutional buyers demanding steep discounts that builders won’t meet. New homes, often located in less desirable areas and targeted at first-time buyers, are more challenging to sell. Home-building activity is a demand driver for paint and wallpaper stores.