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
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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.