5 minutes

Home Depot and Lowe's both reported overall sales declines, but Home Depot's online sales grew 5% in Q3 while Lowe's declined.

The Home Depot Inc. and Lowe’s Cos. Inc. both reported online sales results for their fiscal third quarters. Home Depot reported online sales grew 5% in its fiscal third quarter ended Oct. 29, and Lowe’s reported online sales declined 4% in its third quarter ended Nov. 3. Both retailers noted declines in overall sales.

Lowe’s online sales had grown for the last 14 quarters before this most recent quarter.

Home Depot ranks No. 4 in the Top 1000, Digital Commerce 360’s ranking of North America’s online retailers by web sales. Lowe’s ranks No. 12 in the Top 1000.

Home Depot revenue and sales

Home Depot reported sales declined 3% to $37.7 billion in the third quarter. Total comparable sales declined 3.1%, and U.S. comparable sales declined 3.5%. 

advertisement

Net earnings also declined, to $3.8 billion from $4.3 billion in the year-ago period. The home improvement retailer managed to grow online sales while many other metrics declined. 

“We continued to invest in the digital experience across our website and app and released a variety of enhancements in the third quarter. These range from simple improvements to help customers track orders to more complex things like updating our search and recommendation algorithms,” Billy Bastek, executive vice president of merchandising, said in a call with investors.

Nearly half of online orders were fulfilled by stores, Home Depot said. The retailer also noted it achieved record Halloween sales both in stores and online.

Lowe’s revenue and sales

Lowe’s reported total sales declined 12.8% to $20.5 billion in the quarter. Comparable sales fell 7.4% due to a decline in DIY discretionary spending, although that was partially offset by growth in comparable sales to professional customers.

advertisement

“Given our 75% DIY mix, the DIY pressure disproportionately impacted our third quarter comp performance. At the same time, our investments in Pro continue to resonate, resulting in positive Pro comps again this quarter,” president and CEO Marvin Ellison said in a written statement.

The retailer says it is tripling the space dedicated to BOPIS (buy online, pick up in store) purchases to make the process faster and easier for consumers.

Big purchases remain on hold

Executives at both home improvement retailers noted that consumers remain reluctant to embark on large and expensive home projects. 

“We saw a continuation of a trend that we have been observing throughout the year, with softness in certain big-ticket, discretionary-type purchases. Instead of engaging in larger projects, customers continue to take on smaller projects,” Home Depot’s Bastek told investors.

advertisement

Purchases of $1,000 or more declined 5.2% year over year, after declining 5.5% in Q2. Sales of home renovation items like flooring, countertops, and cabinets have all muted, Bastek said. However, big-ticket sales to professionals remained healthy, including roofing, insulation, and portable power, he said.

Lowe’s also reported that home repairs remained a strong source of sales. Building materials like roofing and drywall grew among professional customers, the retailer said.  Like Home Depot, Lowe’s reported that appliances, flooring, and kitchen and bath materials sold more slowly this quarter.

Home Depot and Lowe’s both serve a mix of B2B and DIY consumers online and in stores. Home Depot historically has more professionals, with sales split about 50-50, while Lowe’s makes about one-quarter of sales to home professionals.

How do Home Depot and Lowe’s compare?

In Q2, Lowe’s appeared to be catching up to Home Depot in terms of online sales.

advertisement

However, “Lowe’s is now performing much worse than rival Home Depot,” says Neil Saunders, managing director of retail analysis firm GlobalData. “And this comes despite the fact Lowe’s has a more embryonic professional segment, which remained in growth this quarter. What this means is that demand from the core DIY consumer has slumped and Lowe’s is bearing the brunt of this pullback.”

Neither retailer discloses what percentage of sales are made online. Both are facing the same headwinds of high housing prices and declining consumer spending. 

“We expect the overall demand environment for home improvement to remain choppy for the rest of 2023 and possibly into early 2023, as consumers spend more on travel and entertainment after the buying binge for home improvement during the pandemic,” says Brian Yarbrough, senior analyst at financial investment firm Edward Jones.

Home Depot earnings

For the fiscal third quarter ended Oct. 29, 2023, Home Depot reported:

  • Total sales declined 3% year over year to $37.7 billion.
  • Home Depot online sales grew 5%. 
  • Comparable sales declined 3.1%.
  • Net earnings were $3.8 billion.

Lowe’s earnings

For the fiscal third quarter ended Nov. 3, 2023, Lowe’s reported:

  • Total sales declined 12.8% to $20.5 billion.
  • Online sales declined 4%.
  • Comparable sales declined 7.4%.
  • Net earnings were $1.8 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

advertisement

Do you rank in our databases?

Submit your data and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.