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
- Where Will Home Depot’s Revenue And EBITDA Growth Come From Over The Next Three Years?
- By What Percentage Have Home Depot’s Revenues And EBITDA Grown Over The Last Five Years?
- What Is Home Depot’s Revenue And EBITDA Breakdown?
- How Has Home Depot’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- What Is Home Depot’s Fundamental Value Based On Expected 2016 Results?
- Home Depot Full Year Results: Housing Growth And Higher Customer Spending Lead To Solid Comp Sales
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.