Tale of the tape: HD & LOW
The home improvement giants reported varying degrees of comp-store sales declines in their most recent second quarters.
It was the seventh consecutive quarter that both Home Depot and Lowe’s posted negative comp-store sales. Details on the financial performance are here and here.
But beyond the numbers, the two companies shared insights into tactics and technology both on the sales floor and in the boardroom.
Here are some highlights.
Home Depot
The SRS acquisition.
The acquisition of Dallas-based SRS Distribution allowed Home Depot to post a slight gain in total sales for the quarter. The company expects $6.4 billion in incremental sales from SRS for fiscal 2024.
Since the Home Depot announced the acquisition back in March, SRS added 15 branches, growing to 775 at last count. “These folks are. Super growth-oriented,” said CEO Ted Decker.
Adjusted Outlook
Forecasting fiscal 2024 comp-store sales of negative 3.0 percent to negative 4.0 percent
Reason for optimism:
The company is enthused by the opportunity to gain share in the highly fragmented $1 trillion home-improvement market. “Remember,” said Decker. “We operate in one of the largest asset classes, which is estimated at approximately $45 trillion, representing the installed base of homes in the United States. Today, we have roughly 17% market share, with tremendous growth potential.”
Top sellers in Q2
Plumbing department posted a positive comp, while power, building materials, appliances, and paint were all above the company average of negative 3.3 percent.
Big ticket performance
Transactions over $1,000 dollars were down 5.8 percent compared to the second quarter of last year.
Omnichannel insights
Sales leveraging Home Depot’s digital platforms increased approximately 4 percent compared to the second quarter of last year. Nearly half of Home Depot’s online orders were fulfilled through physical stores.
Lowe’s
Total Home Strategy
The company said Investments in its Total Home strategy this quarter, allowed it to deliver mid single digit positive comps in Pro and 2.9% comparable sales growth online.
Omnichannel insights
The company emphasized its newly expanded same-day delivery options that are now available online, including DoorDash, Shipt, and Instacart, plus its last-mile technology partner, OneRail.
“As we continue to evolve our omnichannel strategy, we've learned that having multiple delivery platforms, extend our reach into both urban and suburban areas and helps us drive incremental sales with different types of customers, especially younger generations who are more digitally savvy,” said CEO Marvin Ellison.
Hot sellers
Lowe’s reported positive comps in building materials, driven by continued growth in Pro across all building materials subdivisions, said Bill Botz, executive vice president of merchandising. Also Lowe’s reported above-average comps in rough plumbing, electrical and millwork.
Adjusted Outlook:
Forecasting fiscal 2024 comp-store sales of negative 3.5 percent to negative 4.0 percent.
Big ticket performance
"We continue to see persistent pressure in bigger ticket DIY discretionary projects in flooring and kitchen and bath, consistent with the trends that began in third quarter of 2023," Boltz said.
Reason for optimism
“The three core drivers of our business remain strong,” said Ellison. “Home prices continue to appreciate which is sustaining historically high levels of home equity disposable personal income is now growing faster than inflation, and the aging housing stock means people will need to make repairs and improvements in their homes.”
