Decker points to Depot’s growth departments
Deflation, décor and other factors that shaped The Home Depot's first quarter.
Home Depot’s top merchant shared the company’s top growth departments for the three months ended May 5. Ted Decker, executive VP of merchandising, also explained some of the factors — including price deflation — that the world’s largest home improvement retail was forced to deal with in the first quarter.
Here are the departments that outperformed the company’s average comp in the first quarter: appliances, indoor garden, decor, tools, outdoor garden, building materials, plumbing and hardware. The retailer reported total company comps of 2.5% in the first quarter.
Here are the departments that had positive comps, but below the company average: Paint, and kitchen and bath.
Millwork and flooring were slightly negative, largely because the category was lifted by hurricane-related spending in the same quarter last year, Decker said. Electrical lighting produced a low single-digit negative comp.
Overall, the comp average ticket was up 2%, and comp transactions increased 5.5%.
Decker pointed to an example of the kind of lumber deflation that began to hit markets last year. At peak prices, a 4×8 sheet of OSB had a price tag of about $17. At the end of the first quarter, that same sheet of OSB fell more than 50% to about $8.
Without that significant deflation, average ticket growth would have been closer to 3%, he said.
The pro factored heavily in Decker’s first quarter recap. “We are investing in a number of different initiatives and services to help our pros get their jobs done,” he said. “One of these services is our tool rental business.”
He pointed to the company’s 1,100 tool rental centers, the largest such network in North America. And the upside is pretty high. “We know that approximately 90% of Pros rent tools, but only one in four of our pros rent tools from us,” he said.
He said Home Depot, as part of its multi-year investment plan, is creating more space, adding more tools and introducing better technology to reach the rental customer.
Decker also described areas of growth. “At our investor conference in 2017, we talked to you about HD Home, our expansion in home decor. We continue to lean into this category by offering a wide assortment of great values and we are seeing strong growth.” Other areas seeing expansion include natural extensions of existing assortments, including auto, pool and work wear. He said he was excited to see growth from brands such as Weather Guard, Hayward and Carhartt.
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[Correction: A previous version of this article failed to identify Ted Decker as the executive VP of merchandising for Home Depot.]
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