Q1 Clash of the Home Center giants
The number one rivalry in home improvement made headlines again this week as Home Depot and Lowe’s reported earnings for the first quarter on back-to-back days.
Bottom line: Home Depot net income jumped to $4.1 billion for the quarter, up from $2.2 billion in the same quarter last year. Lowe’s net earnings increased from $1.3 billion a year ago to $2.3 billion.
Of course, there was much more to the story, including the comp-store comparison, which shows Home Depot taking the lead from Lowe’s after four quarters of super-sized comps for both retailers.
Highlights from Atlanta:
At The Home Depot, CEO Craig Menear delivered the news that all top 40 markets posted double-digit comps.
Menear also shared that a rent-online, pick-up in store is in the works. For the 1,300-plus rental centers in the U.S. and Canada. “This will enhance the experience for our busy Pro and DIY customers and complement additional investments we are making to expand our rental footprint and increase our assortment and delivery capabilities,” he said.
Other stats shared, included:
• $9 billion: growth of the company since last year.
• Sales leveraging digital platforms increased about 27% compared to the first quarter last year. That equates to more than 100 percent growth on a two-year, stacked basis.
• About 55% of online orders were fulfilled through a store.
• Big-ticket comp transactions, or those over $1,000, were up approximately 50 percent compared to the first quarter of last year.
• 13 of Home Depot’s 14 merchandising departments posted comps at or above 20%. Leading the way was lumber and kitchen & bath departments.
• Ted Decker spelled out an example of the unprecedented rise of lumber prices. At the end of the first quarter last year, a sheet of 7/16” OSB was approximately $9.55. At the end of this year’s first quarter, that same sheet of OSB more than quadrupled in price to $39.76.
• Comp average ticket at Home Depot increased 10.3%,
• Comp transactions increased 19.1%.
Highlights from Mooresville:
“Our results in the first quarter continue to give me confidence that we're making the right investments to accelerate our market share gains through our total home strategy by enhancing our investments in Pro, online, installation services, localization and elevating our product assortment,” said Lowe’s CEO Marvin Ellison. “With customer demand for an integrated omni-channel shopping experience only increasing, we continue to invest in our omni-channel capabilities.”
• Sales at Lowe's.com jumped 36.5% on top of 80% growth in the first quarter of 2020. That represents a 2-year comp of 146%.
• 13 of 15 merchandising departments generated comps over 15%. All merchandising departments were up more than 20% on a 2-year comp basis.
• Number one highest comp: Lumber “driven by strong Pro demand and unprecedented inflation in the category,” said Bill Boltz, executive VP of merchandising.
• Pro comps of 30% outpaced DIY comps. in the quarter. “Now we shifted to the more strategic phase of growth in the Pro by resetting the layout of our stores with a Pro in mind and deepening our relationship with the Pro through a loyalty program that provides them with members only benefits,” said Ellison.
