Categories Analysis, Retail

Home Depot (HD) vs. Lowe’s (LOW): A look at the performance of these home improvement retailers in Q3

Home Depot expects comparable sales to increase approx. 3% in FY2022

Home improvement retailers Home Depot (NYSE: HD) and Lowe’s Companies (NYSE: LOW) reported their third quarter 2022 earnings results this week. Both companies surpassed market expectations on their top and bottom line numbers which impressed the Street amid the prevailing concerns over inflation and housing market conditions. Here’s a look at their respective performances in Q3:

Quarterly numbers

In Q3 2022, Home Depot generated revenue of $38.9 billion, which was up 5.6% year-over-year, and ahead of estimates. Comparable sales increased 4.3% while EPS rose 8.2% YoY to $4.24 and beat expectations. Lowe’s total sales in Q3 increased 2% YoY to $23.5 billion and surpassed projections while its comparable sales rose 2.2%. Adjusted EPS grew nearly 20% to $3.27 and exceeded expectations.

Demand trends and category performance

Home Depot and Lowe’s witnessed healthy demand trends in home improvement during the third quarter. On their respective quarterly conference calls, both retailers hinted at a couple of factors that could help drive further demand for home improvement. These factors included housing stock age, shortage in housing, and home price appreciation.

Home Depot mentioned that customers were still spending a lot of time at home under the current hybrid work model which allowed them to undertake more home improvement projects. Both HD and Lowe’s talked about the aging of homes and the shortage of houses that would also prompt customers to invest in home improvement.

As homes continue to age, the need for repair, maintenance and remodeling arises. According to Lowe’s, two-thirds of home improvement spend is non-discretionary on repair or maintenance projects that cannot be delayed. The shortage in housing also means that people are opting to renovate their current homes than buying new ones.

During the third quarter, both Home Depot and Lowe’s witnessed momentum across their Pro and DIY customer bases. As mentioned on their calls, both retailers expect to see continued strength in the Pro business as their customers tell them that their backlogs remain strong and that most of them expect more work in 2023 than 2022 thereby indicating the resilience of home improvement demand.

In Q3, Home Depot recorded positive comps in 11 of its 14 merchandising departments while Lowe’s posted comps growth above company average in eight of its 15 merchandising departments. Home Depot’s comp average ticket increased 8.8% while Lowe’s comparable average ticket rose 8% in the quarter driven by product inflation. HD’s comp transactions fell 4.4% while Lowe’s comp transactions declined 5.8% in Q3.  


Home Depot reaffirmed its guidance for fiscal year 2022 while Lowe’s raised its outlook for the full year. Home Depot expects comparable sales to increase approx. 3% and EPS to grow in the mid-single digits in FY2022.

Lowe’s expects total sales to range between $97-98 billion and comparable sales to be flat to down 1% in FY2022. The company now expects adjusted EPS to be $13.65-13.80 versus the previous outlook of $13.10-13.60.

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