Professional builders accounted for about 45% of total sales, or $42.57 billion, in 2016 for The Home Depot Inc., a spokesman says, and the home improvement company expects that side of the business to grow as it incorporates Interline Brands and its network of e-commerce sites.
Home Depot acquired Interline, a national distributor of maintenance, repair and operations products in 2015 for $1.63 billion. The business accounted for about 2% of Home Depot’s total 2016 sales, or about $1.89 billion of $94.6 billion, chief financial officer Carol Tomé told stock analysts this week. Efforts are under way to connect Interline’s business-to-business websites with Home Depot’s base of professional contractor customers.
“We saw a healthy balance of growth among both our Pro and DIY (do-it-yourself) categories with Pro sales outpacing DIY sales in the quarter,” CEO Craig Menear told analysts on the company’s year-end earnings call. “A portion of our overall Pro strategy is focused on the integration of the Interline business, which continues to progress.”
Menear said rollout of Interline’s product catalog continues across all U.S. Home Depot stores. “The next phase of the integration is focused on enabling Interline’s customers to use their Interline accounts for purchases in Home Depot stores or on HomeDepot.com,” he told analysts. “We are excited about the opportunity Interline provides us to expand our share of wallet with Pro customers.”
Home Depot does not break out online sales to its Pro customers, but overall Pro sales for the year outpaced the comparable-store sales growth rate, Ted Decker, executive vice president, merchandising, told analysts on the earnings call. Comparable-store sales increased 5.6% for the year. Interline sales include catalog and online; a spokesman declined to provide a breakdown between the two.
Interline operates eight specialized B2B websites including SupplyWorks.com, a supplier of facility maintenance products; Wilmar.com and e-Musa.com, serving multi-family housing facilities; and e-Barnett.com and e-HardwareExpress.com, for contractors serving residential customers.
Home Depot reported a 19% year-over-year increase in online sales for fiscal 2016. The retailer said e-commerce now represents 5.9% of its total sales. While it didn’t report exact dollar figures, this would mean it drove roughly $5.58 billion in online sales last year, up from $4.67 billion in 2015, when the web represented 5.2% of total sales.
Q4 sales also got a boost from the web and Pro shoppers. “We had a strong fourth quarter as sales exceeded our expectations,” Decker told analysts. “We saw strength across the store led by our Pro customer, and our online business continued its double-digit growth with sales growth of approximately 19% in the fourth quarter,” he said.
Pro customers make up only 4% of Home Depot’s customer base, a spokesman said.
In its fiscal fourth quarter, Home Depot finished the rollout of what it calls Buy Online Deliver From Store (BODFS) capabilities, which lets Home Depot fill online orders from stores. This helps speed delivery to online shoppers, Home Depot said, as its stores are often closer to customers than are its e-commerce fulfillment centers.
For fiscal Q4 ended Jan. 29, Home Depot, No. 87 in the B2B E-Commerce 300, reported:
- Total sales of $22.21 billion, a 5.9% increase compared with $20.98 billion in the fourth quarter of the prior year.
- Net earnings of $1.744 billion, up 18.6% from $1.471 billion.
For the full fiscal year ended Jan. 29, Home Depot also reported:
- Total sales of $94.60 billion, up 6.9% from $88.52 billion in the previous year.
- Net earnings of $7.957 billion, up 13.5% from $7.009 billion.
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