House Depot (NYSE: HD) and Lowe’s Corporations (NYSE: LOW) reported their first quarter 2024 earnings outcomes earlier this month. The house enchancment retailers noticed their prime and backside line numbers decline throughout the quarter, as they continued to be impacted by softness in discretionary spending. Right here’s a take a look at their total efficiency in the newest quarter:
Gross sales and profitability
House Depot generated gross sales of $36.4 billion for the primary quarter of 2024, which have been down over 2% year-over-year. Comparable gross sales decreased 2.8%. The corporate delivered EPS of $3.63, which was down 5% from final yr. Lowe’s noticed its gross sales lower 4% YoY to $21.4 billion. Comparable gross sales have been down 4.1%. EPS fell 18% YoY to $3.06.
Enterprise efficiency
Within the first quarter, House Depot and Lowe’s continued to see strain in massive ticket discretionary spending, as clients continued to place off bigger tasks whereas taking up smaller ones. The delayed begin to spring impacted House Depot’s gross sales whereas Lowe’s delivered better-than-expected spring seasonal gross sales.
House Depot’s comp transactions decreased 1.5% and comp common ticket decreased 1.3% in Q1. Massive-ticket comp transactions, that are over $1,000, have been down 6.5%. Lowe’s comparable transactions declined 3.1% and comparable common ticket fell 1%.
House Depot and Lowe’s are each centered on bettering their share with the Professional buyer, whose backlogs stay secure and wholesome. These retailers proceed to spend money on bettering the purchasing expertise for this buyer, as they appear to increase their place on this fragmented market.
House Depot is concentrated on the residential Professional contractor, who outlets throughout a number of classes of residence enchancment merchandise whereas engaged on complicated tasks. It estimates this specific buyer section includes a complete addressable market price approx. $250 billion.
In the meantime Lowe’s continues to give attention to increasing its share with the small to medium-sized Execs comparable to restore and transform contractors and property managers. It estimates that these Professional clients make up half of the $500 billion Professional market.
Outlook
For fiscal yr 2024, House Depot expects whole gross sales and EPS to develop approx. 1% for the 53-week interval and comparable gross sales to say no round 1% for the 52-week interval. For FY2024, Lowe’s has forecasted whole gross sales of $84-85 billion and EPS of approx. $12.00-12.30. It expects comparable gross sales to be down 2-3% from the earlier yr.
Shares of House Depot and Lowe’s have dropped 13% and 10% respectively up to now three months.
