Home Depot bolsters spring mix
Cordless outdoor power tools and higher end outdoor furniture are two areas where Home Depot’s top merchant signaled out for special mention during the company’s fourth quarter earnings call.
Craig Menear, Home Depot executive VP of merchandise, said the company was loaded for the outdoor spring selling season, but also had a strong lineup of products for indoor projects.
Spring is the biggest selling season for home improvement retailers, especially Home Depot, where second quarter sales hit $22.5 billion last year, compared to $17.7 billion in the recent fourth quarter.
The retailer is planning for its fifth Spring Black Friday event this year. “Working with our vendors, we plan to bring in special buys and extraordinary values on popular spring items like patio furniture, grills, landscaping and live goods, to name a few,” Menear said.
Outdoor living will be boosted by higher end patio furniture from Brown Jordan. Weber’s new exclusive Spirit series of grills with a Gourmet BBQ System will also factor into the mix, as will charcoal and gas grills from KitchenAid.
A line of cordless outdoor power equipment from Ego will be new in 2014. Menear said the 56-vold lithium-ion batter can go from dead to fully charged in 30 minutes.
Inside, Home Depot will be promoting Delta’s Activetouch H20 Handshower, allowing for one-handed operation. A Kohler toilet seat with an integrated LED light will be in the mix. He also pointed to energy efficient water heaters from Rheem.
“Heading into the 2014 spring selling season, we believe we are well positioned and are excited about the opportunities that it brings,” said Menear.
New-home sales up 9.6%
Sales of new single-family houses in January increased to a seasonally adjusted annual rate of 468,000, according to data released yesterday by the U.S. Census Bureau.
The rate represents a 9.6% increase over the revised December rate of 427,000, and 2.2% above the January 2013 estimate of 458,000.
The data follows shortly after the bureau reported a 16% decline in total housing starts for the month of January.
Yesterday, Census also reported the median sales price of new houses sold in January 2014 was $260,100; the average sales price was $322,800. The seasonally adjusted estimate of new houses for sale at the end of January was 184,000. This represents a supply of 4.7 months at the current sales rate.
HD vs. LOW, a tale of the Q4 tape
For the 19th straight quarter Home Depot’s total company comparable-store sales beat those of Lowe’s. But the contest is getting closer.
The No. 1 and No. 2 home improvement retail companies posted quarterly financial reports one day apart from each other. Home Depot’s fourth quarter comp-store sales of 4.4% was a mere half a percentage point ahead of its rival in the category considered to be the best gauge of the health of a retailer. As the chart below shows, the gap is narrowing.
In other fourth-quarter metrics, Home Depot — operating with one less week in its 2013 fourth quarter calendar than it had in the previous year — posted bigger numbers than Lowe’s but smaller percentage increases. Depot’s sales slipped 3.0% to $17.7 billion, while Lowe’s gained 5.6% to $11.7 billion.
In the net income category, Depot cleared more than a billion dollars in quarterly net income ($1.01 billion) for the fifth straight quarter. Earnings were down slightly from $1.02 billion in the 13-week quarter a year ago.
Lowe’s increased to $306 million in quarterly net income, up 6.3% from the year-ago period.
At the end of the year, the score count scoreboard showed Home Depot 2263, Lowe’s 1,832.