The Home Depot reported sales of $40.2 billion in the third quarter, an increase of 6.6% on a year-over-year basis. Sales in the quarter included $2.9 billion from recently-acquired SRS Distribution. According to president and CEO Ted Decker, SRS Distribution is expected to contribute $6.4 billion in sales for the roughly seven months post-acquisition.
Decker said SRS “gives us the right to win with the specialty trade pro customers who need specialized capabilities to complete their project.”
“The strategic game plan for SRS is proceeding as expected,” Decker said. “The initial things we’re working on [related to cross-sell opportunities] is to make their catalog available to our customers largely through the pro desk and through our outside sales resources, and we’re seeing terrific take up on that.”
While third quarter results were impacted by weather events and general macroeconomic uncertainty, Decker said Home Depot’s quarterly results exceeded expectations. U.S. comp sales decreased 1.2% in the quarter while net earnings in the period was down $0.2 billion year-over-year to $3.6 billion.
During the company’s earnings call, Decker reiterated Home Depot’s focus on growing its pro wallet share “through a differentiated set of capabilities” and creating “the best interconnected experience.” In recent quarters, the home-improvement retailer built a network of downstream supply chain facilities—including 19 direct fulfillment centers—allowing Home Depot to reach 90% of the U.S. population with same- or next-day delivery.
“Recently, we expanded our assortment in these facilities to allow for faster delivery speeds across more products. We made significant website enhancements to better communicate faster delivery options,” Decker said during the earnings call. “In the third quarter, we launched a marketing campaign that builds awareness of our faster delivery speeds. While this just launched, we are seeing the intended results, greater customer engagement, higher conversion, and incremental sales.”
Executive vice president of stores and international operations Ann-Marie Campbell said Home Depot’s pro ecosystem capabilities—which serve pros working on larger, complex projects—is available in 17 markets across the U.S.
“We recently introduced a pro customer experience manager to help drive a higher level of connectivity with our in-store pro and outside sales team in order to deliver a more seamless experience and exceptional service,” Campbell said during the earnings call. “This new leadership role with our existing team enables us to focus more on the news of the pro with a focus on building relationships with our most important pros, ensuring we have job lot quantities available for sale on critical SKUs and allocated more labor hours to the pro desk during peak shopping times.”
During the third quarter, comp transactions decreased 0.6% and comp average ticket decreased 0.8%. Big ticket comp transactions—those over $1,000—were down 6.8% compared to the third quarter of 2023.
“We continue to see softer engagement in the larger discretionary projects where customers typically use financing to fund the project, such as kitchen and bath remodels,” said executive vice president of merchandising Billy Bastek. “During the quarter, pro sales were positive and outpaced the DIY customer. Those pros engaging with elements of our pro ecosystem, who also have a dedicated salesperson,were our strongest performing pros in the quarter.
