The Home Depot reported sales of $43.2 billion in the second quarter, a 0.6% increase compared to the prior-year period. Sales included $1.3 billion from the home-improvement retailer’s acquisition of SRS Distribution.
Comparable sales in the U.S. decreased 3.6% in the second quarter. Pro sales outperformed DIY customer sales in the quarter, but both categories were negative, according to The Home Depot. BIlly Bastek, executive vice president of merchandising, said the company saw positive growth pros who engaged with the Pro Xtra program, deliveries to the jobsite, and its B2B website.
“The underlying long-term fundamentals supporting home improvement demand are strong,” Ted Decker, president and CEO, said. “During the quarter, higher interest rates and greater macroeconomic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects.”
During the company’s earnings call, Decker reiterated The Home Depot’s long-term goal of capturing market share in the “highly fragmented” $1 trillion home-improvement market. According to Decker, the company has a roughly 17% market share “with tremendous growth potential.”
“That is why we have been investing and executing on our strategy to create the best interconnected experience, grow our pro wallet share through a differentiated set of capabilities, and build new stores,” Decker said.
Ann-Marie Campbell, executive vice president of U.S. stores and international operations, said the company now has pro capabilities on 17 markets, including a broader product assortment, digital assets, a sales force, and broader fulfillment options.
“Our trade credit pilot program is also underway and while it’s still early days, we’ve seen the program resonate with our customers and the benefits of extending credit for larger scale projects that are staged over a longer period of time,” Campbell said.
When discussing the SRS Distribution acquisition, Decker said The Home Depot plans to drive “incremental growth” through several sales and cross synergy opportunities.
“We will make their more comprehensive product offerings in roofing, pool, and landscape available to all our customers through our Pro desk,” Decker said. “And we will offer SRS customers a form of credit tied to their account, which will make purchases in Home Depot stores more convenient.”
In the second quarter, The Home Depot generated operating income of $6.5 billion, down slightly from $6.6 billion the year-prior period. Bastek said comp transactions in the quarter decreased 2.2% and comp average ticket decreased 1.3%. Big-ticket comp transactions—those over $1,000—were down 5.8% compared to the second quarter of 2023. Bastek said in the quarter the company saw softer engagement in larger discretionary projects where customers typically use financing, such as kitchen and bath remodels.
