Home Depot 2Q Sales Dip as Pro Remains Negative - Modern Distribution Management

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Home Depot 2Q Sales Dip as Pro Remains Negative

Lumber deflation and a wet start to spring drove a dip in Home Depot's sales, just as it did in the first quarter.
The company named William 'Billy' Bastek Executive Vice President of Merchandising, effective immediately.

Atlanta-based home improvement retailer The Home Depot reported 2023 second-quarter sales of $42.9 billion on Aug. 15, a decrease of 2.0% from the same quarter in 2022. 

For 2Q 2023, net earnings were $4.7 billion, or $4.65 per diluted share, compared with net earnings of $5.2 billion, or $5.05 per diluted share, in the same period of fiscal 2022.

Gross profit in 2Q was nearly $14.2 billion, a decrease of 2.3% from nearly $14.5 billion gross profit 2Q 2022.

Despite the sales dip, Home Depot Chair, President and CEO Ted Decker said the company is pleased with the quarter’s performance. 

“While there was strength in categories associated with smaller projects, we did see continued pressure in certain big-ticket, discretionary categories,” he said in the company’s earnings release. “We remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market.”

Pro Customer Sales in the Negative

The same conditions that colored Home Depot’s 1Q sales drop drove the dip in sales in the second quarter: lumber deflation and a wet start to spring.

Do-It-Yourself customers outperformed Pro customers in the quarter, but was also negative, Home Depot’s Executive Vice President of Merchandising Billy Bastek said during the company’s 2Q earnings conference call.  

Earlier this year, Home Depot officials said the company plans to serve an untapped contractor market, serving as a one-stop-shop for complex contractor projects. Read more about Home Depot’s plan to build out a “ecosystem” to serve this segment, which is traditionally served by wholesale distributors. 

Home Depot is also eyeing deeper penetration into the MRO market with its plans for HD Supply.

Other trends:

  • Big-ticket strength across Pro-heavy categories, including portable power, gypsum and pipe and fittings. 
  • Pro project backlog remain elevated, but the size of projects is smaller.
  • Digital platform sales decreased 2.9% compared to the first quart of the year. 

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