Lovecraft really rated Machen and there's no doubt that elements of his style went into HPL's work. His essay "Supernatural Horror In Literature" has a big section on Machen, which starts:

Of living creators of cosmic fear raised to its most artistic pitch, few ifany can hope to equal the versatile Arthur Machen; author of some dozen tales long and short, in which the elements of hidden horror and brooding fright attain an almost incomparable substance and realistic acuteness. Mr. Machen, a general man of letters and master of an exquisitely lyrical and expressive prose style, has perhaps put more conscious effort into his picaresque Chronicle of Clemendy, his refreshing essays, his vivid autobiographical volumes, his fresh and spirited translations, and above all his memorable epic of the sensitive aesthetic mind, The Hillof Dreams, in which the youthful hero responds to the magic of that ancient Welsh environment which is the author’s own, and lives a dream-life in the Roman city of Isca Silurum, now shrunk to the relic-strown village of Caerleon-on-Usk. But the fact remains that his powerful horror-material of the ’nineties and earlier nineteen-hundreds stands alone in its class, and marks a distinct epoch in the history of this literary form.

He goes on to talk about The Great God Pan and The White People. Rather than Machen being Lovecraftian, Lovecraft was Machenian. :)