Homeowners continue to wait for lower interest rates before spending on bigger projects as Home Depot’s second quarter earnings and sales beat expectations, but comparable same-store sales decreased and are now expected to continue to decline by 3–4% instead of the 1% that was originally forecasted. In fact, the second quarter marked the seventh straight quarter of negative sales growth. Here are the full details from the call:

Inside the Numbers

  • Home Depot reported $43.18 billion in sales versus $43.79 billion estimated, while adjusted earnings per share were $4.67 compared to estimates of $4.52. 
  • Comparable same-store sales decreased 3.3% versus the 2.39% decrease that was expected. In the U.S., this decrease was 3.6% versus 2.63% estimated.
  • Foot traffic dropped 1.8%, while the average ticket dropped 1.3%.
  • The retail giant updated its fiscal 2024 guidance to increase 2.5–3.5% year over year, up from the 1% that was previously expected. It’s also important to note that fiscal 2024 guidance includes 53 weeks of operating results instead of 52 weeks.

Key Takeaways

  • Project Size Matters: Due to higher interest rates, consumers are continuing to take on smaller home improvement projects while deferring bigger projects that may require financing.
  • In-Stock Is Better than Special Order: Home Depot continues to focus on in-stock selection to capitalize on foot traffic and the in-store experience. Special order is still an option, but customers want to grab and go with the product they’re looking for.
  • The Pro Is in Focus: Investors remain optimistic about Home Depot’s Pro business. Their $18.25 billion acquisition of SRS Distribution was completed in June and is expected to contribute nearly $6.4 billion in incremental sales in fiscal 2024. SRS is a huge building-projects supplier that includes professional roofers, landscapers and pool contractors as its primary customers.

Product Category News

  • Exterior Doors: Home Depot’s partnership with Feather River Doors continues to grow and will be a key relationship to watch in the future for the growth of its millwork department.   
  • Electrical Hand Tools: Milwaukee’s line of electrical and Made in the USA hand tools is an important part of Home Depot’s product assortment and will continue to help pull in some of the Pro audience.
  • Flooring: Home Depot’s relationship with Lifeproof vinyl plank flooring is expanding as the retailer promotes its excellent durability and resilience.
  • Outdoor Power Equipment: Home Depot continues to lead the industry in its focus on battery-powered outdoor equipment as consumers become more environmentally conscious.

Remember, this analysis is based on publicly available information and represents our interpretation of the data. We encourage you to conduct your own research and analysis to develop marketing strategies best-suited for your specific brand and target audience.

At Porchlight, we partner with home improvement brands to develop and implement strategic marketing campaigns that drive results. Contact us today to discuss how we can help your brand navigate the evolving market landscape and achieve its marketing goals.

By providing insights and thought leadership, we empower home improvement brands to make informed decisions and thrive in a dynamic market. So, stay tuned for more industry analysis and marketing tips from Porchlight!

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