HD’s Menear points to merchandise highlights
Atlanta-based Home Depot’s wind-and-storm aided sales effort in the third quarter presented several category highlights, according to executive VP merchandising Craig Menear.
The company’s strong third-quarter performance, which included a 13% net earnings increase and comp-store sales of positive 4.2%, included strength "in the core of the store" and growth in average ticket and transactions.
"The maintenance and repair categories that make up the core of our store continue to perform well," Menear said, during the company’s third-quarter earnings call. "Project basics such as pipes and fittings, fasteners, air circulation, hand tools, chemicals, caulks and appliance parts were positive. And, as customers prepared for winter, small maintenance projects like insulation and waterproofing also sold well."
In addition to storm-related sales strength, the company saw higher-than-company-average comps in tools, electrical, indoor garden, building materials, plumbing and hardware.
Ten departments in all posted positive comps, with paint, flooring, lighting and kitchens rounding out the list.
Negative comps for the third quarter occurred in the following categories: lumber, outdoor garden, bath and millwork.
Brands and product innovation played a role in sales growth, he said. " We offered outstanding values in power tools from brands like Ryobi, Milwaukee, Makita, Ridgid and DeWalt, and we are seeing consistent response to these brands from our customers," he said. Pro customers are responding well to exclusive-to-Home Depot hand tools from Milwaukee and DeWalt, he added
LED lighting continues to advance on the shelves, with the first commercially available 75-watt equivalent LED A-Line replacement, he said.
The Home Depot’s chief merchant also shared the following third-quarter trends with investors:
• Total transactions grew by 1.2%;
• Average ticket increased 3.0%;
• Transactions for tickets under $50 — about 20% of the company’s U.S. sales — were flat in the quarter; and
• Transactions for tickets more than $900 — also representing some 20% of U.S. sales — were up 3.6% in the quarter.
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Masco exec departs
Donald DeMarie Jr., executive VP and chief operating officer of Masco, has left the company “to pursue other opportunities,” according to a Nov. 10 filing with the Securities and Exchange Commission (SEC). DeMarie’s departure was effective Nov. 4.
Masco and DeMarie are working together to ensure a smooth transition, according to the SEC filing.
DeMarie was named executive VP in July 2007 and became COO in December 2007, according to Masco’s 2010 annual report. He had previously served as group president of the company’s Installation and Other Services segment since 2003. He also served as president and CEO of Masco Contractor Services and in other managerial roles since 1995.
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Paint demand is forecast to rise
The demand for paint and coatings in the United States is expected to rise 7.8% annually through 2015, according to a study by The Freedonia Group, a Cleveland-based market research firm. The market is expected to expand strongly in both volume and value terms, rebounding from the declines of the recession-impacted 2005 to 2010 period.
However, the U.S. paint and coatings industry will continue to be impacted by the trend toward sustainability, and growing environmental concerns will subject manufacturers to increasingly stringent government regulations. As a result, paint and coating suppliers will continue to invest heavily in the development of innovative, higher-value formulations.
The large architectural market will grow at an annual rate of 10.8% through 2015, reaching more than $14 billion.
Demand will be promoted by renewed strength in the housing market, particularly as home-building activity rebounds from low 2010 levels. The interior paint market will remain larger and grow faster than its exterior counterpart.
Sales of paint and coatings in manufacturing markets will expand at a respectable rate through 2015, reversing the downward trend of the 2000 to 2010 period. Among the various market segments, furniture and fixtures will enjoy one of the best growth prospects, and will remain the leading outlet for coatings over the forecast period, according to the report.