Amid stagnant industry growth, two major hurricanes, a port strike, and cautious consumer spending, Home Depot’s domestic comparable sales declined by 1.2%. This decline included a 0.8% drop in average ticket size, reflecting a slowdown in large remodeling projects. Addressing this, Home Depot CEO Ted Decker stated, “We’ll have to work our way through this current macro uncertainty and the interest rates pressuring home improvement demand. But this is a market after all, and markets return to equilibrium, and remodeling will as well.” With Home Depot’s investments and focus on Pro customers—who account for roughly half its business—it was unsurprising that this segment outperformed the DIY side. However, in its broader industry category (NAICS #444), hardware stores outpaced Home Depot with a 4% year-over-year growth in the fiscal period, according to the Census Monthly Retail Sales report. This suggests that while Home Depot is gaining market share in Pro, it is losing ground in DIY.
Industry traffic trends, as analyzed using Placer data, reveal that seasonal periods like Labor Day and fall cleanup had less impact this year compared to 2023. Although Home Depot management expressed satisfaction with Labor Day sales (highlighting grills as a notable growth category), the expectations behind this performance remain unclear.
Lowe’s demonstrated slightly stronger performance than Home Depot overall, as well as in non-storm markets like New York. Storm preparation and cleanup also provided a notable traffic lift during the quarter. The monthly pace of comparable sales tracked closely with traffic trends, but it’s important to note that Home Depot’s increasing focus on job site deliveries and Home Depot Supply could decouple store traffic and comparable-store sales over time.
Finally, smaller format competitors showed significantly stronger traffic trends, as highlighted below. This aligns with the relative strength of smaller-ticket items and performance in smaller markets, reflecting broader shifts in consumer preferences (something we highlighted earlier this year).
