Home Depot’s sales to pro customers outpaced sales to DIY customers for the second consecutive quarter. Sales growth among larger pros outpaced growth among smaller pros as backlogs for both cohorts remain long and are growing, according to the home-improvement retailer.
Home Depot said it observed many customers turning to pros to help with larger renovation projects in the quarter, evidenced by the strength of the retailer’s in-stock kitchens, tubs and showers, and vanities categories, which all posted one-year and two-year comps above the company average.
Total sales for Home Depot increased 8.1% on a year-over-year (YOY) basis to $41.1 billion in the fiscal second quarter of 2021. Comparable sales in the U.S. increased 3.4% and 10 of the retailer’s 14 merchandising departments posted positive comps during the quarter, led by kitchen and bath and lumber.
The retailer’s comp average ticket increased 11.3% during the quarter and comp transactions decreased 6%. President and COO Ted Decker said the growth in comp average ticket was driven in part by inflation in several categories, including lumber. Big-ticket comp transactions–defined as transactions over $1,000–increased 24% in the second quarter of 2021 compared to the same period in 2020. Decker said the company experienced big-ticket strength across several pro-heavy categories, such as lumber, vinyl plank flooring, gypsum, and pipe and fittings.
Home Depot began making investments in technology and infrastructure early during the coronavirus (COVID-19) pandemic to extend its in-store focus by offering curbside pickup for customers. The retailer also converted a market delivery center facility into a direct fulfillment center in order to reduce online delivery lead times. One a two-year stack basis, sales from Home Depot’s digital platforms increased approximately 100% and approximately 55% of online orders were fulfilled through a store.
Looking towards the back half of the year, Decker said the retailer is rolling out several partnerships and initiatives to help pros complete jobs quickly. Decker said Home Depot entered a Big Box Home Improvement “exclusive relationship” with OSB panel boards provider LP Building Solutions.
“In addition, we are pleased with the momentum we are seeing with our Pro Xtra Loyalty Program,” Decker said on the retailer’s quarterly earnings call. “Pro Xtra offers more frequent touchpoints with our pros in convenient services like purchasing, tracking, and volume pricing. All Pro Xtra members are [also] now able to access our B2B Pro online experience, offering pros more personalization on homedepot.com.”
The company’s B2B website, which initially launched in the fourth quarter of 2018, is part of the retailer’s plan to enhance digital offerings and offer an interconnected shopping experience for all customers. Since its launch, the platform has added several elements, including the ability for customers to link purchases to QuickBooks and upload purchase history.
Home Depot had taken several steps towards developing a pro “ecosystem” since 2019, including onboarding pros on its B2B website, enhancing the interconnected shopping experience for pros, opening flatbed delivery centers to increase next-day delivery capabilities, and cultivating the One Home Depot experience.
President and CEO Craig Menear said the company is continuing to make progress on building out its One Home Depot Supply Chain vision, with “a critical mass of buildings schedule to come online this year and next.”
“[The buildings] will not only enhance the customer experience from a delivery standpoint, but also expand the breadth and depth of our current opportunity set, drive efficiency, and leverage our scale to further extend our low cost position home improvement,” Menear said on the earnings call.
