More key takeaways from Home Depot’s Q2 report
Home Depot’s hour-plus presentation on its Q2 results this week included emerging trends in retail, tech, consumer habits and beyond.
Here are some of the highlights.
Seasonal shifts, macro-economic challenges. According to CEO Ted Decker: “During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects. Additionally, we saw continued softness in Spring projects, which were also impacted by the extreme weather changes throughout the quarter.” As a result, Decker says, “we believe a more cautious sales outlook is warranted for the year.”
How the SRS acquisition may alter strategy moving forward. “We will make SRS’ more comprehensive product offerings in roofing, pool and landscape available to all our customers through our Pro desk. And we will offer SRS customers a form of credit tied to their account, which will make purchases in Home Depot stores much more convenient,” Decker said on the webcast.
In-store investments, upgrades and tech. Anne-Marie Campbell, Home Depot’s senior EVP, shared on the Q2 webcast that the company continues to invest in streamlining the in-store experience: “specifically our focus on in-stock and on shelf availability with our sidekick and computer vision applications.”
Campbell shares more details on what that entails:
“We have also enhanced the tools our associates use for our in-store pros and specialty selling. Within the MyView tool, we have given our associates better visibility to our customers’ activity. For example, for our in-store pros, we can see sales trends, specific buying patterns and expiring perks – equipping our associates with insights to better partner, grow share of wallet and deliver value for our customers.”
She adds: “We launched a new platform known as Pipeline Management that enables Interconnected Project Selling for Kitchen Designs. With this tool, associates and store leaders will now be able to have a consolidated digital view of their pipeline and all activities related to a customer’s journey. This allows associates to more easily manage multiple complex projects while more effectively communicating with our customers throughout their journey.”
Campbell also spoke briefly about the company’s trade credit pilot program, which is meant to extend “credit for larger scale projects that are staged over a longer period of time.”
The company is also expanding its Instacart partnership to provide more same-day delivery capabilities (for items up to 60 pounds).
Merchandising and spend trends. According to Billy Bastek, the company’s merchandising EVP, “Our plumbing department posted a positive comp, while power, building materials, appliances, and paint were all above the company average.”
However, larger purchases took a dive. “Big-ticket comp transactions, or those over $1,000 dollars, were down 5.8 percent compared to the second quarter of last year. We continued to see softer engagement in larger discretionary projects where customers typically use financing to fund the project such as kitchen and bath remodels,” Bastek said.
Home Depot’s e-commerce efforts continue to rise. Overall, the company’s digital sales rose roughly 4 percent compared to Q2 of 2023.
Bastek also shared more specific product updates:
- We upgraded the durability of all Lifeproof vinyl plank while also introducing on-trend colors, patterns and lengths. This helped drive positive comps in the category for the quarter.
- In water heaters, we recently modified our line structure to better serve the pro customer needs.
- In paint, we continue to see the benefits of the investments we are making around our products and our fulfillment options including our in-store service and jobsite delivery capabilities.
- We continue to see tremendous success in our outdoor power equipment categories (especially in battery-powered products) driving both positive unit and dollar comps in the quarter.
Bastek adds more details on what’s coming soon:
“This quarter, we are launching the first to market smart glass door with Feather River … This new door technology allows customers to easily change the glass from privacy or frosted, to clear with a push of a button and is compatible with our hubspace ecosystem.”
Finally, Bastek touts the company’s partnership with Milwaukee, sharing that Home Depot has seen “great adoption in electrical hand tools.”
