Home Depot is reporting a solid third quarter, with a significant revenue increase from 3Q in 2015 and higher than expected earnings per share. You can see the entire tED magazine story on the Home Depot earnings report here.
Inside the numbers, Home Depot reports some success stories when it comes to e-commerce and building relationships with the pro customer. During the earnings report teleconference, Home Depot announced it rolled out a new design for homedepot.com this quarter. “Content was enhanced to display in full screen optimizing our desktop and tablet displays for customers,” Craig Menear, Chairman, CEO and President of Home Depot said. “We continue to see double-digit sales growth from our onlinen business. This quarter, online sales grew 17% and represented 5.6% of overall sales.”
From the pro customer, Home Depot found most of its success in the lighting categories. “Once again, we saw strong outperformance in many pro heavy categories as pro sales grew faster than the company’s average comp,” Ted Decker, Executive Vice-President of Merchandising told the media. “This led to strong comps in commercial and industrial lighting.”
Home Depot is also helping pro customers with a new program that will deliver products to a job site. The program, called Buy Online, Deliver from Store, or BODFS, is still in its early stages, but is seeing some success. “We’re now up to about 1,600 stores where we’ve launched the (BODFS) program,” Menear announced. “We’ve seen double digit growth in deliveries. So certainly we think that is beginning to have a positive impact and making it easier for our pro customers.”
“One thing we saw this quarter is we’ve always talked about the high-spend Pro and the low-spend Pro. The low-spend Pro comp was on par with the high-spend Pro. So that’s nice to see not only geographical but the high and low spend are each comping at that stronger rate in consumer. And as we look across departments, virtually every department had higher Pro spend comp than consumer. So the Pro is strong across the business,” Menear added.
Menear also said in the conference call that he believes Home Depot will become a bigger player in the MRO market in the future, saying “we think total share for Home Depot plays somewhere in the 15% range.”
Home Depot is also happy with the success of the company’s private label credit card for pro customers. The company reports about 20% of its pro customers are using the card, and they are expecting more growth next quarter.
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