Sales, merchandise and more
Executives from Lowe’s and Home Depot told similar stories in their third quarter earnings calls. Both companies posted slightly negative comp-store sales, but both improved their full-year outlooks.
The impact of massive hurricanes, and the anticipated spending on home improvement that necessarily follows such major storms, is playing a role in the sales forecast.
Lowe's slightly outperformed Home Depot in the domestic comparable-store sales department. Lowe's negative 1.1 percent compared to Home Depot's negative 1.2 percent.
The CEOs echoed each other's take on the retail landscape.
Home Depot's Ted Decker: "We continue to see pressure on larger remodeling projects driven by the higher interest rate environment and continued macroeconomic uncertainty."
Lowe's Marvin Ellison: "When it comes to the macro environment, this remains a challenging home improvement market. While interest rates are beginning to drop, consumers continue to face affordability challenges as both inflation and interest rates are putting pressures on their wallet. Mortgage rates also remained stubbornly high and there's still a meaningful gap between current mortgage rates to purchase a home and the homeowners existing rates with over half of current rates below 4 percent.”
Full year guidance
Looking ahead to the full year results, Home Depot said it expects sales to grow about 4 percent, with a comp-store sales decline of about 2.5 percent. “We updated our guidance primarily as a result of the better performance in the third quarter as well as expected hurricane-related demand in the fourth quarter," Decker said.
At Lowe’s, executives expect total sales for the full year to fall between $83 billion and $83.5 billion (previously $82.7 to $83.2 billion). Comparable sales are expected to be down 3.0 percent to 3.5 percent. A previous forecast called for comp declines between negative 3.5 percent and negative 4.0 percent.
Digital data
The Home Depot reported that sales leveraging the company's digital platforms increased 4 percent compared to the third quarter of 2023.
At Lowe's, online sales were up 6 percent. Also, online conversion and traffic both increased, including double-digit increase in traffic to the Lowe's mobile app.
Merchandising moves
Big ticket items of $1,000 or more were down 6.8 percent at Home Depot, compared to the prior year quarter. Pro sales were positive, and better than sales to DIY customers, said Billy Bastek, executive vice president of merchandising.
Power, outdoor garden, building materials, indoor garden and paint departments all posted positive comp-store sales, while lumber, plumbing, and hardware were all above the company average, he added.
Home Depot gave special mention to its widening assortment of cordless Ryobi tools, Milwaukee M18 fuels toolkits and new Husky BITE Tools.
"We are bringing more innovation in batteries with Ryobi Edge, Dewalt XR, and the expansion of the Milwaukee Forge lineup with new 8- and 12-amp hour batteries, all designed to bring more power to our customers," said Bastek.
Alt Lowe's, Bill Boltz, the executive vice president of merchandising, said the third quarter saw positive comps in products such as generators, chain saws and cleaning supplies—a surge that resulted from hurricane cleanup efforts.
Lowe's is bringing to shelves Wal-Board tools, described as the world leader in drywall tools. Boltz also pointed to the introduction of the Pella Steady Set interior window installation system. It is "an innovative way for pros to install windows from the inside. It's faster and safer than exterior installation because installers now won't have to carry a window up a ladder," he said.
