While demand in the home improvement category has come down from pandemic highs, the biggest players in the sector continued to post sales gains in the fourth quarter.
As consumers invested in their homes around the holidays, The Home Depot on Tuesday reported fourth quarter net sales increased 10.7% year over year to $35.7 billion, while comparable sales increased 8.1%. In the U.S., comps increased 7.6% from last year.
The retailer’s operating income increased 18.2% from last year to $4.8 billion, representing an operating margin of 13.5%. Net income grew 17.3% to $3.4 billion.
For the full year, Home Depot reported net sales increased 14.4% to $151.2 billion, while operating income and net income increased 26.1% and 27.7%, respectively.
“Given the exceptional results that the home improvement sector has consistently delivered during the pandemic, it is easy to take such numbers for granted,” GlobalData Managing Director Neil Saunders said in emailed comments. “However, it takes a great deal of commercial and operational skill to upscale a business in this way over such a short period of time, which is a testament to Home Depot’s management team.”
On a call Tuesday with analysts, Chief Operating Officer and soon-to-be CEO Ted Decker said sales from its pro segment continued to outpace DIY during the period. To further strengthen its position with its Pro customers, the retailer announced initiatives to encourage more purchases. Pros historically have leaned on Home Depot for its convenience play and have generally purchased unplanned, last-minute items from it, according to Decker. The retailer’s goal now is to draw those customers in sooner and capture more of those planned purchases.
“We’re building capabilities with our Pro ecosystem to accelerate Pro share growth particularly in planned purchases,” Decker said. “We’ve always talked about [how] every Pro is in our building. We’re sort of the 7-Eleven for Pros — convenience, value, tremendous product and brands — but what we’re building now is something completely different and revolutionary to get the Pro planned purchase.”
RetailDive.com, Caroline Jansen
