Late spring checks Depot’s Q1 sales
Not counting seasonal, strong results for the Atlanta-based giant.
A late start to the spring selling season curtailed The Home Depot’s first quarter results, but the company still produced big sales and income gains.
The Atlanta-based retail giant posted first quarter net sales of $24.9 billion, up 4.4% from $23.9 billion in the first quarter last year. Comp-store sales in the U.S wee positive 3.9%. Total company comps were 4.2%.
The company’s net income swelled to $2.4 billion, compared to $2.0 billion in the first quarter of 2017.
CEO Craig Menear described a slow start to the spring selling season. “Outside of our seasonal business, we had solid results in all markets and categories and are seeing strong momentum in all lines of business during these first few weeks of May,” he said. Menear also pointed to a “favorable housing and macroeconomic backdrop.”
Wall Street had expected comp-store sales of 5.4%, instead of the 4.2% reported in the first quarter. Expectations were also slightly higher for revenue — $25.2 billion, compared to the $25.0 billion reported. Despite the slow start, the company is maintaining its sales and earnings guidance for fiscal 2018. The company expects sales growth of about 6.7%, and comps to grow about 5.0% for the year.
The Home Depot’s total company comps figure of 4.2% continued its string of 28 consecutive quarters of positive comps. However, it was the lowest figure since the second quarter of 2015, which also registered 4.2%.
The company said its efforts to attract pro customers are bearing fruit. Sales to the pro in the first quarter again outpaced DIY sales, a common refrain in recent Home Depot earnings reports. “Investments aimed at deepening our relationships with our pro customers are yielding increased engagement, which translates to incremental spend.”
One of the company’s investments in this area is in delivery. The company bolstered its 2-hour and 4-hour delivery window options with save day car and van delivery in some markets. This move, along with others, led to double-digit delivered sales growth in the quarter, Menear said.
An estimated 35% of the company’s overall sales are to the pro customer.
Another growth area is in the company’s interconnected retail strategy. First quarter online sales grew about 20%. The retailer recently launched a program that allows customers to include and attach install services to products purchased online. “If you purchase a faucet online and want to include the installation of the faucet in your purchase, we now enable this experience,” Menear said.
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