Big players impacted by sagging lumber prices
While softwood lumber prices saw a 5.4% decrease for the month, the cost has plunged 44.1% since January 2022.
“It’s been a very turbulent couple of years in the lumber market,” said Ted Decker, CEO of The Home Depot. “To give you an example, what we faced in the fourth quarter on the framing side, lumber was $420 per 1,000 board feet on average compared to $886 per 1,000 board feet on average in 2021.”
“To put that in retail dollar cents for everyone, a 2x4 stud, which is one of our top unit movers in the business retailed on average for $3.40 in the fourth quarter this year. Last year, it was over $5,” Decker explained. “As you look forward into the front half, that same 2x4 stud was over $10. It's now $3.50.”
But with that lower cost, there is a bright side as Decker noted that The Home Depot will see “good unit productivity and certainly an opportunity to drive more project-related business.”
And sales to pros at The Home Depot outpaced DIY sales during the fourth quarter as contractor backlogs remained elevated.
Looking ahead, Lowe’s Executive Vice President and Chief Financial Officer Brandon Sink said, when considering the impact of lower lumber prices, “we are expecting a nearly 300 basis point headwind to sales in the first quarter and a 100 basis point headwind to sales in the second quarter.”