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2026.10.09 | TB | Industrials | Makita: US Pro Power Tool Demand Pt.1

原标题：Makita – US Professional Power Tool Demand – Part 1

#industrials

Third Bridge · 2026-10-09

Analyst-led • 2 Oct 2026

Companies: SWK US, 6586 JP, HD US, 669 HK, 5851 JP

Matthew Berry (MB) Director, Sales, Hardware at Innovative Eyewear Inc (Lucyd)

Ken Morozumi (KM) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

KM [00:00:02]: Welcome to Third Bridge's Interview on Makita, US Professional Power Tool Demand – Part 1. I'm Ken, and I'm facilitating today's Interview. Please welcome Matt.

Before we get started with today's Interview, would you please state I agree or I disagree with the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

MB [00:00:30]: I agree.

KM [00:00:33]: Could you briefly introduce yourself regarding your experience at Makita?

MB [00:00:43]: Yes. I worked for Makita for a little over five years. I worked in the retail division that basically we handled Home Depot account specifically. I was the National Account Manager for power tools for half that tenure. Then my last half, I was the National Field Manager in charge of 55 plus or minus field reps that call specifically on Home Depots.

Questions

00:01:30] Today, I'll be asking about Makita's strategy and its tool business outlook. What are the key trends shaping US professional power tool demand? How do you expect the market to develop over the next 2-3 years?

MB [00:02:00]: Honestly, I expect the market to grow 5-7% YoY and partly, that's because of the introduction of outdoor power a few years ago with gas prices going up, and restrictions being placed on different locales based on noise that I think the battery-operated tools are going to grow. You're also getting to a point with the technology that the tools have the power to do tasks that years ago, you had to have a gas-powered motor or electricity, AC power.

KM [00:03:09]: I want to understand a little bit about the application or end customers. There's a lot of replacement from gas-powered to electric. Are there any differences between applications?

MB [00:03:33]: I think the biggest application that you're going to see, it's like the introduction with an electric vehicle or a Tesla. If you went into a Home Depot store five years ago, they may have had 10 push mowers that were gas-powered string trimmers and blowers for either gas or electric. You have very few cordless. If you go into a store today, it's the opposite that they have 10 or 12 cordless models and one or two gas-powered models. In some locations, they've outlawed gas so they're not even selling new gasoline. If you want a new powered mower you don't have a choice but to buy either a corded or a cordless powered mower or tool, whether it be a hedge trimmer, a string trimmer, a blower, they're all moving toward cordless or electric. I could expand on that. It's really environmental concerns, noise concerns and then just cost concerns of long term, gas is more expensive than having a battery powered.

00:05:42] How has the Makita business been doing so far? Makita's business in the North American market has been declining in revenue for the past five years, while Milwaukee is increasing. The TTI, Milwaukee's company, reported in H1 2026 that Milwaukee sales increased by 7.7% while Makita FY26 Q1 sales grew by 7.5% on a local currency basis. How do you interpret this sudden bounce back in sales for Makita? Does it mean it hit the bottom? How do you interpret the sales increase in North America?

MB [00:06:46]: It's kind of a twofold answer. When the Russian war started with Ukraine, companies started boycotting Russia. It's because everywhere else in the world, it's not as competitive as it is in the United States for sales. When they walked away from the Russia business, the funds that they were able to use to subsidise the US reduced tremendously. They were not allowed or they did not have the ability to do promotions the way DeWalt, TTI and other power tool companies did. If you look at the sales of any power tool supplier, it's varied up and down based on items.

That's because different items are on promo different quarters and they walked away from doing a lot of promotions, and they left their pricing stable and they were hurt by the other vendors that were still doing promos on certain items. An example is to get into the power tool business, power tool companies use a combination package of a drill and an impact driver. I don't know, say it's USD 249 regular retail, USD 249. They'll put it on sale for USD 199, USD 179 for (audio cuts out 09.49) so what was happening is you've got the equivalent TTI brand, you've got the equivalent DeWalt. They're USD 179 or USD 199 and Makita is at USD 249 and they lost sales because of that.

00:10:16] Focused on this quarter, as the Milwaukee and Makita sales increased, it's give or take roughly the same growth rate. How do you interpret the sales growth in relation to the price competition?

MB [00:10:47]: You made a note of it in the notes you sent me. Makita has actually done some advertising with World Cup and they've done a little bit of advertising for outdoor power and items that they normally haven't done in the past few years. If you actually go in a Home Depot, you're actually seeing some promotional pricing on items that you haven't seen in three-plus years. I think they've bottomed out and lost some traction in Home Depot stores by not doing promotions. Six months ago, in the spring, I'm just going to use spring, they have a big promo event for outdoor power and so everybody's got their lawnmowers and their string trimmers and their hedge clippers on promotion. Milwaukee may have had a dozen items on promotion and Makita had two. They weren't that deep of a discount. I think they lost business because they weren't competitive.

You have two types of customers. You have the customer that's Makita, Milwaukee, DeWalt loyal that's in the battery platform that they're going to buy that brand no matter what the price is. Then you have what I consider new customers or customers that don't really have loyalty, they're just looking for a price. Makita has never been a company that chased for price. When you walk into a store and you're a customer and you need a lawn mower, you're looking, "Oh, well, this brand is X price, this brand is Y price, this brand is Z price," and you're going to go with the lowest price if you don't have any history with that company. I mean you may have done some research and narrowed it down to say, "I want a Makita or a Milwaukee or a DeWalt and a Milwaukee," and then when you walk in the store, you're going to say, "Oh, wow, this one is USD 500 and this one is USD 1,000. I'll get the USD 500."

KM [00:13:58]: How many of Makita's existing buyers switched to competitors when Makita had a weakness in price compared to others?

MB [00:14:23]: I don't think they lost customers, but I don't think they gained any new customers. If you're a professional person that uses Makita tools to make your living, if you're a contractor or a plumber or whatever, your job is and you've invested thousands of dollars in Makita, the largest expense is your batteries. If you're a Pro and you've got 20 batteries, you're not going to go switch to a Milwaukee and have to get all new batteries. You're going to stick with Makita and be able to use your existing batteries. I don't think they lost customers, but I don't think they grew their market share of customers.

KM [00:15:42]: Regarding the battery, how much market share did Makita have while you were there?

MB [00:16:02]: I would say out of the big three, out of Milwaukee, DeWalt and Makita we probably had 25-30%, and DeWalt probably had 30-40%, and then the remainder was TTI. I'm not even counting the little off brands and companies like Bosch don't have enough business left in the United States. Hitachi, they don't have enough business left in the US to move the needle.

00:17:19] You mentioned the professional with Makita batteries won't switch brands because of battery cost, and since Makita 40V XGT batteries don't fit existing 18V LXT tools, does moving into 40V force the contractor to buy a new battery ecosystem anyway?

MB [00:17:47]: It does but the brilliant thing that Makita did when they introduced that XGT line was pretty much every existing tool that they had, they made an XGT version. If you were to get into the XGT line, you could get a drill that was an XGT. You could get an impact driver or a circ saw, anything that was made tool-wise LXT, they made their core business XGT also. If you got new customers, they didn't have to have two-battery platforms and if you were an existing Makita customer, you could transition, which was smart. Where I think they may have missed some sales, if you look at Milwaukee or you look at DeWalt, they sell adapters. You could take this version, this voltage and connect it. DeWalt has a new version called a Powershift, new battery line that's called a Powershift but they have an adapter that connects it to a FlexVolt. If you could use your FlexVolt tools with a Powershift battery, that's where they may have missed the market a little bit.

00:20:06] In Q1 2026, Makita's North America business went up by 7.5% on a local currency basis. How do you expect the sales outlook to be in the next 2-3 years?

MB [00:20:37]: Historically, power tools grow at about 5% per year. I think Makita is going to hit like they'll be between 7% and 10% is what I think. I think it's because, one, I think outdoor power is growing in the cordless. I think their XGT line is growing, and they're going to get new customers from that. I also think that they've gotten back to starting to do promotions and be more price competitive and I think that's going to help them with some additional sales that they may have not had one year ago.

KM [00:21:35]: Does that mean Makita's business will outperform the overall market outlook, which is around 5-7%?

MB [00:21:48]: I think that's probably a fair statement because if you look at some of the tools in their XGT line, the other vendors don't have those. They're all starting to come out with large rotary hammers and pressure washers and things that are high-draw tools, but Makita has more of them available today than some of these others. The negative to that is Milwaukee and DeWalt, I think, bring new products to market a lot faster than Makita. Makita, they do a lot of internal testing, and they have a lot of engineering expertise that they want to be 100% that the tool is not going to fail and it's going to do what they state it's going to do, where I think Milwaukee, DeWalt, they have rushed things to market to grab the sales, but the tool may have not lived up to the hype.

00:23:32] Talking about the go-to-market strategy relationship with Home Depot. You mentioned that one of the drivers is XGT, and Makita aims to increase 40V Max share of global cordless product revenue from 10% to 25% by FY30. How do you evaluate this Makita strategy of operating both LXT and XGT in the US market?

MB [00:24:25]: Honestly, I think it's two different customers that buy that product. The homeowner, the residential home contractor, a residential plumber, they can probably use the LXT 18V platform. They're not going to have an issue with that. It's more the commercial construction that they need a heavier-duty tool that creates more power. I think that may be where Makita has been missing for years on that is they have corded tools but they didn't have cordless tools that could do that. I think the technology is caught up with it but it's really two different customers. The person that's using the 40V platform does not need it to hang some sheet rock and put together some simple framing on the house. The XGT platform is more for rotary hammers, grinders, concrete grinders, concrete cutting tools, stuff that the normal homeowner, residential contractor would rarely use.

00:26:24] What competitive advantages does Makita have compared to competitors focusing on XGT? How does it convert into revenue growth of around 7-10%?

MB [00:26:56]: Now with the XGT, tools that were traditionally gas, say, I'll use an example of, say, a power cutter to cut concrete. In the past, you had to have either an electric tool or you had to have a gasoline powered tool and you couldn't make it cordless because it didn't have enough power to do the job or if it had enough power, the battery life using an 18V platform was minutes compared to an hour plus. I think where you're seeing the growth is now these customers can get a tool and have it battery powered, and it will perform the same way as a gas or an electric. It gives the user more options, especially on a tool that you don't use every day. If it's a gasoline, like a power cutter has been traditional gas and the problem is you don't use that tool every day. What happens is a contractor may spend more time getting the tool running and started than they need the tool to cut the item they're trying to cut, where if it's a battery-powered, they snap a battery on it and press the button and it runs.

00:29:00] What kind of professional trades or customers can Makita realistically gain share over the next three years? What determines the win rate in those trades compared to others?

MB [00:29:30]: I think what I call the industrial or commercial, pro, contractor, that's where they have the most ability to grow share because those customers, they may have Makita right now, but corded tools or their gas tools and when they're upgrading, they're going to go with a Makita brand and go cordless because they're going to have a history with the tool and they're going to have tools available that are cordless to do a job that weren't traditionally there, didn't exist years ago. Then I think the other place is when you look at outdoor power, when they're trying to grab new residential customers. If you're a professional contractor that uses 40V tools for your job every day, those people still have to cut grass and cut their bushes and blow and everything else so those are their first customers that they'll convert because they're already familiar with the platform, and it's an easy move to switch from snapping a battery on a lawnmower that they used in their rotary hammer Monday through Friday.

KM [00:31:30]: You mentioned it will gain shares. Does it convert the current 25-30% into maybe 30% or more? How do you expect this market share to look?

MB [00:31:56]: I think it will go 30-35%. I think they're going to take over they're going to take over that industrial customer and they're going to gain share in residential outdoor power. Those two segments are where the growth is going to be.

00:32:32] One question about the industrial customers. Makita has its own battery ecosystem that protects customers from switching to others. The competitors like Milwaukee and others also have that ecosystem or strategy. How do you expect Makita to break that ecosystem and gain share?

MB [00:33:07]: Basically, if you look at DeWalt or you look at TTI and their TTI, it's MX Fuel, I think, and then the DeWalt is the Powershift, they don't have nearly as many tools as Makita does. The XGT is like 40-plus SKUs now, where the others are like 10, half of that and I think they're ahead of the curve on that. As long as they don't get into overtesting the tool before they bring it to market, they'll beat out the other companies. Historically, Makita is very slow when bringing out something new.

KM [00:34:25]: Why is Makita very slow?

MB [00:34:31]: I think they overengineer. Every Makita tool has its own specific motor. Let's take something like drills. If they offer four versions of a drill, each one of those drills has a different motor. Now when you go to TTI or you go to DeWalt, they may have four versions of a drill too, but they're going to use the same motor. The same motor, maybe it's got a different feature or different overall spec, but they reuse parts that they can reuse. I look at it like a car company. They may have a V8 engine that they use in five different models because if they're only building one V8 engine for five different models, they're saving some money. Where Makita's thought is if they were building five different V8 motors, they would build five different V8 motors. They wouldn't think about using the same motor for five different items.

00:36:29] You noted that Makita leads in high-voltage SKU count, but Milwaukee brings product to the market much faster. How long can Makita maintain its SKU competitiveness before Milwaukee catches up, given TTI's speed and the market bringing out product?

MB [00:37:11]: I would think at least three years, if not five but if Makita continues developing tools at their current rate, it may be hard for Milwaukee to catch up. I will tell you the big difference, price has a lot to do with it. TTI, they have a good, a better and a best, where Milwaukee is their best product, where their Ryobi is their good. Then they have a rigid that's better. What TTI does is they take a little bit of margin, they may use some of the margin they're making on their Ryobi product and put it into a Milwaukee. Where Milwaukee has an advantage is, and I'll just use a round number, if Makita was going to sell something for USD 100 and Milwaukee, it costs them the same to make that USD 100 tool, they could sell it for USD 75 because they would take some of the margin from that Ryobi and just roll it into the Milwaukee to help them with the price. With Makita, they're always fighting price.

00:39:28] You expect Makita to have the potential to gain shares for the batteries. What about protecting shares from competitors, especially although Makita has an advantage in SKU, but has a bit of weakness in price? How will the competitors take away these market shares?

MB [00:40:10]: When you get into the high-end tools, I think once you get into that, if you look at what Milwaukee and DeWalt offer and their highest grade, highest voltage tools, they're more expensive than a Makita now. I don't think they're going to be stealing any because when you move it's going to be negligible because there may be a specific tool that maybe Milwaukee makes today that Makita doesn't. If you're a contractor, they might invest in one Milwaukee tool if that was their only choice, if they could see an advantage of it. I have a great example of that is in the LXT, they make an item that's called a rebar tier. When you're forming concrete and you're using rebar, they tie a little metal strips around it to hold it in place. Traditionally, they may have one person. It was done by hand. Somebody wrap wire and cut it. Now that Makita has a tool that does that. That tool is like USD 3,000. What a human could do in a week with that tool, they can do in a day. I think the customer is they evaluate it and they say, "Wow, this is a USD 3,000 tool but I'm not going to have to pay labour on this guy, but for one day of doing this job." The tool is going to pay for itself very quickly.

00:43:04] Let's move on to the go-to-market strategy as we talk about your gaining shares in SKU. One question about the go-to-market strategy and retailers' relationship. How do you evaluate Makita's relationship with Home Depot and its ability to gain a larger share of the retailers' power tool sales?

MB [00:43:37]: I think specifically with Home Depot, it's a twofold business. They don't have as much space in the store as, say, Milwaukee does but if you go into a Home Depot in Florida vs the state of Missouri, Milwaukee is probably going to have the same items for sale in the store, where Makita, they've done a good job of breaking down their sales and they know that say, Florida is more of a concrete market than Missouri. If you were to go into a store in Florida, they may have more concrete tools than a store in Missouri to customise what's available because if you look at it, in a store, you could only have 150 items online, you can have unlimited. Makita know the sales in every market so if these items need to be in the store, they have them in the store. The items that don't, they just let them live online. They've narrowed it down in like a city the size of Atlanta or New York or Miami, the mixes may be different in the city centre vs the suburbs.

00:46:14] What's Makita's advantage and disadvantage in the retailers' relationship and/or US channel compared to others like Milwaukee, who also show products in Home Depot?

MB [00:46:47]: One advantage they have is they've invested in what they call a kiosk, but it's a small display that they have in every store that they purchased and put in the store. They have one and Milwaukee has one. DeWalt doesn't. They use the kiosk for new items, fast-selling items, and it stands out at the front of the department area so we get a lot of traffic that goes by that that they haven't changed out frequently. That's an advantage they have. Now, the disadvantage they have compared to Milwaukee is Milwaukee has got the power, they have Milwaukee brand. They have Ridgid brand, they have Ryobi, they have their toolboxes. Milwaukee makes hand tools now. They make safety glasses. Milwaukee does a couple of billion dollars per year with Home Depot. Makita probably does less than half of that.

00:48:40] Milwaukee have a little more products shown in the store. What percentage of shelf space is allocated to Makita vs Milwaukee, DeWalt or Ryobi inside a typical Home Depot tool department?

MB [00:49:17]: Milwaukee may be 70% because they have three different (talking over each other 49.37). They have Ryobi and Ridgid and you have, I don't know, 20% or 15% DeWalt and then Makita has got the rest. They have the smallest amount of space.

00:50:02] How would you change the strategy of Makita's product displays in Home Depot?

MB [00:50:23]: Two things. I think they need to have more planograms to be able to customise more products to the market, to that market, whether it's Florida or Georgia or Missouri or California. Honestly, if they would adjust their retail price down just a little bit, they might be a little more competitive and grow the sales and be able to grab more space.

KM [00:51:24]: Do you think they can adjust the retail price to compete with the competitors?

MB [00:51:37]: I think the first thing is they've got to go back to doing more promotions to where they were five years ago to at least be competitive with the other suppliers but if they give up a little bit of their margin and price, it's great if you can sell 100 pieces at 25% margin. You're going to make more money. You might be able to sell 500 pieces if you lowered your price and they only made a 20% margin. They might sell 5x as many pieces.

00:52:50] Home Depot is expanding its digital offering, maybe moving towards more online and online availability and fulfilment being more important relative to physical shelf space. How should Makita respond to it relative to its competitors?

MB [00:53:30]: That may be one area that they excel in is because they have I would say, 20% of their line is available in a store. The other 80% is only available online. Home Depot has, I don't know, 25-plus direct fulfilment centres that Makita product is stocked in those, plus Makita has three DCs of their own across the United States. They can get products shipped the same day to Home Depot. Home Depot's goal is to compete with Amazon and be able to deliver product to the customer in three days. It doesn't matter where you live in the US, Home Depot guarantees, they should be able to get you a delivery within a few days.

00:55:07] Out of the total sales from Home Depot, how much was it from online and from in-store at Makita's?

MB [00:55:36]: I would say almost one-third of the business. When I was there, when I was the account manager at cost, I sold in almost USD 500m and USD 130m, USD 120m of that was online but with power tools, the one thing you got to consider is the majority of things that are online are the odd tools that not everybody needs. Everybody needs a drill. Everybody needs an impact driver. Everybody needs a 7.25 circ saw, but you may not need a band saw. You may not need a polisher, you may not need a concrete cutting saw. The majority of the items, I would say 60% of those items that are online sales, you wouldn't have gotten if they weren't online. If somebody needed a drill, they may have bought it online, but because of the ease, but they could have gone to a store to buy it but if you need a power cutter or you needed this speciality tool, they may not have it.

It couldn't be at all (ph 58.10) Home Depot too because Home Depot is not having to invest in inventory. The big thing at Home Depot is they do average sales per item per store per week. They're looking at, "Okay, this store is going to sell 10 drills per week," so when you start talking about some kind of oddball tool like a power cutter or something that's a non-traditional tool, you may be at 0.15 per week. Where on a drill, a store may have thousands and thousands of dollars of inventory on a power cutter, Home Depot may have USD 5,000 in inventory across the whole chain.

KM [00:59:23]: Is that true?

MB [00:59:24]: They can ship it wherever they need to ship it to.

00:59:26] What are the important points or drivers you expect for Makita as a high-voltage product and go-to-market strategy, looking ahead in 2-3 years?

MB [01:00:16]: I think they're going to continue twofold. I think it's going to be adding more items to XGT. They're at a point now that I think they're going to start having version 2.0 of some of those tools where they may have learned from the introduction how do they improve them. I think you're going to see that. Then I know outdoor power is their fastest-growing category. I know they're putting a lot of money into manufacturing and growth of that category because just the growth of the category as far as government restrictions, environmental concerns and cost, long-term cost, it's much cheaper. They've been working on and they released some items that are more for commercial landscapers. To me, that's their fastest-growing category. They're also expanding, I call it their lifestyle items that are used…

They're probably used on construction sites, but they have coolers now. They have coffee makers. They have microwave ovens. They have a lot of LED lighting that it's got construction type uses, but you could also use it for camping. You may get a little bit of residential use out of some of those things. People tailgating (ph 01.02.41) at athletic events where you couldn't traditionally use those items. I think they're getting into some odd type items and they're also moving into some categories like pressure washers and tyre inflators and some items that you wouldn't think about that somebody that's not even a construction professional would have a use for is the way I see it.

KM [01:03:26]: Understood. We talked about the Makita for the GMT and voltage products, so we're going to end this Interview for now. Thank you so much for joining today, and see you next time for the outdoor product.

MB [01:03:48]: Great. Yes, just let me know. I'm available whenever you want. This time works great.

KM [01:03:54]: We'll reach out to you later. Thank you so much for today. Thank you. Bye-bye.

MB [01:04:01]: Have a great day. Thank you.

KM [01:04:03]: You too. Bye-bye.

Transcription ends at 01:04:04 of the recorded material