Categories Analysis, Retail

Home Depot (HD) vs. Lowe’s (LOW): A look at how these home improvement companies fared in Q2

Lowe's projects sales of approx. $92 billion for 2021

Home improvement retailers Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) have both reported their second quarter 2021 earnings results. Both companies beat market expectations for revenue and earnings and both stocks gained on Wednesday. Here’s a recap of their performances:

Quarterly numbers

Home Depot’s revenue grew 8.1% year-over-year to $41.1 billion in Q2 2021. Comparable sales rose 4.5% with US comp sales up 3.4%. Lowe’s reported total sales of $27.6 billion in Q2, up slightly from $27.3 billion in the year-ago quarter. Lowe’s comp sales decreased 1.6% with US comps down 2.2%.

Home Depot delivered a 12.7% year-over-year growth in EPS to $4.53. Lowe’s adjusted EPS rose 13% YoY to $4.25. Home Depot’s gross margin dropped around 80 basis points YoY to 33.2% while Lowe’s gross margin fell 30 basis points to 33.8%.

In Q2, Home Depot saw a 6% decrease in customer transactions while average ticket rose 11.3%, driven partly by inflation in certain categories such as lumber. Lowe’s comparable average ticket grew 11.3%, driven mainly by commodity inflation in lumber as well as higher sales of appliances and installations. Comp transaction count dropped 12.9% due to lower sales of smaller ticket items like paint and cleaning products.

Trends

On its quarterly conference call, Home Depot stated that it is seeing strong underlying demand across its business. The company saw strong sales during weekdays compared to weekends which it attributed to the return of customers to pre-pandemic activities. Customers are undertaking home improvement projects and they are taking on larger projects as the Pro customer business outperformed the DIY customer business.

Home Depot posted positive comps across most of its merchandising departments in Q2 with kitchen, bath and lumber taking the lead. The company recorded single digit negative comps in the paint, hardware and indoor and outdoor garden departments, which had performed well last year.

Lowe’s saw a decline in DIY demand compared to last year as people shifted back to their pre-COVID activities and behaviors. The company reported double-digit growth in Installation Services in Q2 and also saw positive comps in Building Products and Home Décor. Lowe’s delivered positive comps across categories such as appliances, kitchens and bath, and flooring during the quarter.

Outlook

Looking at the rest of 2021, Home Depot remains optimistic on the trends it is seeing. In the first two weeks of August, comps in the US have remained consistent with the second quarter. As housing remains strong and demand for home improvement remains healthy, the company sees a positive environment for home improvement spending over the coming years.

Lowe’s expects the home improvement market to moderate in the back half of the year given lower levels of commodity inflation and an increase in consumer mobility. The company projects sales of approx. $92 billion for the year.

Click here to read the full transcripts of Home Depot and Lowe’s Q2 2021 earnings conference calls

Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!

Most Popular

CVX Earnings: Chevron reports lower revenue and profit for Q3 2024

Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to

Key highlights from Exxon Mobil Corporation’s (XOM) Q3 2024 earnings results

Exxon Mobil Corporation (NYSE: XOM) reported its third quarter 2024 earnings results today. Total revenues and other income remained relatively flat at $90 billion compared to the same period a

AAPL Earnings: Apple Q4 2024 sales rise 6% YoY, beat estimates

Apple Inc. (NASDAQ: AAPL) reported an increase in revenues for the fourth quarter of 2024. The top line came in above estimates. The gadget giant generated revenues of $94.9 billion

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top