Pro sales once again outpaced DIY sales growth in the fiscal first quarter for Home Depot, driven by underlying strength in project demand. Growth for both types of customer are “strong and consistent” on a three-year comp basis, during a period where “the medium- to longer-term underpinnings of demand for home improvement have never been stronger,” according to Home Depot CEO and president Ted Decker.
“The home improvement consumer remains engaged. Customers continue to tell us that their homes have never been more important, and project backlogs are very healthy,” Decker said on the home-improvement retailer’s first quarter earnings call.
Jeff Kinnaird, executive vice president of merchandising for Home Depot, said the company is “encouraged” by the momentum it is seeing with the pro customers.
“During the quarter, we saw many of our customers turn to pros to help them with larger renovation projects,” Kinnaird said. “This can be seen in the double-digit comp performance of our building materials and flowing departments as well as in certain kitchen and bath categories like in-stock kitchens, tubs and showers, and countertops. We also saw double-digit growth in our kitchen and bath installation business.”
Kinnaird noted 11 of the company’s merchandising posted positive comps in the quarter. The average comp ticket increased 11.2% during the first quarter, while comp transactions decreased by 8.4%. Kinnaird said the growth in average ticket was driven by inflation and demand, while the decline in comp transactions reflected the late start to spring and “anniversarying of stimulus.” One a two- and three-year basis, both average comp ticket and comp transactions were “healthy and positive,” according to Kinnaird. Big-ticket comp transactions—transactions over $1,000—increased 12.4% compared to the first quarter of 2021.
“We continue to invest in an ecosystem of capabilities, including enhanced fulfillment options, a more personalized online experience, as well as other business management tools to drive deeper engagement with our pro customers. And we believe our efforts are resonating,” Decker said.
Executive vice president and chief financial officer Richard McPhail said the company is “building out” its ability to attract “repair and remodeler planned purchase(s),” an area the retailer hasn’t been able to previously attract. The retailer is working to build an “ecosystem,” enabling capabilities across fulfillment and delivery, online, and in-store channels to remove friction from the transactions and experiences of pro customers.
Decker said the company is seeing a stronger progression of comps with pros from the unplanned in-store purchase category to the planned delivery purchase category.
“Think of that pro who’s just coming to the store to do cash-and-carry in an unplanned purchase versus one who we know is staging out a project and getting that project delivered. The sequence of comps of that engagement gets higher and higher, with the highest being ‘planned delivered,’” Decker said.
Quarterly Results
First quarter net sales increased $1.4 billion on a year-over-year basis at Home Depot to $39.8 billion. Comparable sales for the first quarter of fiscal 2022 increased 2.2%, with comparable sales in the U.S. increasing 1.7%. Home Depot’s net earnings in the first quarter were $4.2 billion, compared with net earnings of $4.1 billion in the same period a year ago.
