The world’s largest retailer of home improvement products, Home Depot (NYSE:HD) announced its Q3 results and continued to out-perform its largest competitor Lowe’s (NYSE:LOW) that has been lagging behind Home Depot over the past few quarters. Despite continued weakness in the housing market, its big-ticket ($900+) sales grew at a decent 3.6%, with robust core business in maintenance and repair segment.
Maintenance and Repair Categories Maintain Sales Despite Weak Housing Market
Home Depot continued to outperform its closest competitor Lowe’s and took away a larger share of the home improvement sector’s (weak) recovery. Its 3Q sales increased by 4.4% (y/y) backed by comparable store sales growth of 4.2% and 3% improved average ticket size. In comparison, Lowe’s comparable store sales grew just by 0.7% last quarter and infact declined by 1% over the first 9 months of fiscal 2011. Home Depot’s sales were driven by continued strength in the core maintenance and repair categories, as well as storm recovery business post-Irene. Transactions for tickets over $900, which also represent approximately 20% of Home Depot’s U.S. sales, were up 3.6% in the third quarter.
The company sees the housing markets headwinds to continue as private residential investments in the U.S. remain at historic lows as a % of GDP. With high inventory levels and difficult credit conditions, Home Depot expects to achieve 2.5% sales growth for fiscal 2011.