Following three years of “exceptional growth,” The Home Depot experienced “moderation” in 2023, demonstrated by a decrease in sales and net earnings in the fiscal year.
The home-improvement retailer reported sales declined 2.9% in the fourth quarter to $34.8 billion and 3.0% in the fiscal year to $152.7 billion. Comparable sales in the U.S. fell 4.0% in the fourth quarter and 3.5% in 2023. Net earnings in the fourth quarter declined to $2.8 billion from $3.4 billion while net earnings for the 2023 fiscal year fell to $15.1 billion from $17.1 billion.
“During fiscal 2023, we focused on several initiatives to strengthen the business while also staying true to our strategic investments of creating the best interconnected experience, growing our pro wallet sharer through our unique ecosystem of capabilities, and building new stores,” chair, president, and CEO Ted Decker said.
During the company’s earnings call, Decker highlighted the December acquisition of Construction Resources as a step towards continuing to grow Home Depot’s pro wallet share. The distributor of design-oriented surfaces, appliances, and architecture specialty products serves pro contractors focused on renovation, remodeling, and residential home building.
“This acquisition adds to our robust product offering of products and services. It allows our complex pros to easily shop across aesthetic product categories in a showroom setting, which is how they are accustomed to shopping for these types of goods,” Decker said. “In 2024, we will continue learning and building out new capabilities for the complex pro.”
By the end of 2024, Decker said Home Depot will have 17 of its top pro markets equipped with fulfillment options, localized product assortments, and expanded sales force and enhanced digital capabilities with trade credit and order management in pilot for development.
“More job site delivery orders fulfilled from our distribution center means less congestion in our stores and less time dedicated to picking, packing, and stage-in orders for delivery,” said senior executive vice president of U.S. stores and operations Ann-Marie Campbell. “This gives our in-store pro sales associates more time to dedicate to our pros. Additionally, the ability to fulfill large orders through our distribution network also means that we have more product in stock and available for sale for all those pros shopping in our stores.”
Quarterly Results in Detail
Executive vice president of merchandising Billy Bastek said building materials and outdoor garden department posted positive comps in the fourth quarter, with six additional merchandising departments posting comps above the company average.
In the quarter, comp transactions decreased 2.1% and comp average ticket decreased 1.3%, according to Bastek. Big-ticket comp transactions, or those over $1,000, were down 6.9% in the fourth quarter compared to the prior-year period. Bastek said the retailer saw softerr engagement in several big-ticket discretionary categories, including flooring, countertops, and cabinets.
“During the fourth quarter, our pro and DIY customers' performance was relatively in line with one another. While internal and external surveys suggest that pro backlogs are lower than they were a year ago, they have remained stable and elevated relative to historical norms,” Bastek said.
