Home Depot had its highest Q1 sales figures in the company's history, as inflation pushed revenue higher, but customers took higher prices in stride. Sales through digital platforms increased 3.7% during the first quarter.

The Home Depot Inc. reported a record $38.9 billion in sales for the first quarter of fiscal 2022. That’s an increase of $1.4 billion, or 3.8% from the first quarter of fiscal 2021, as higher prices pushed revenue higher.

Customer transactions fell 8.2% in the quarter, while the average ticket value jumped 11.4% to $91.72 from $82.37 a year earlier.

Sales through digital platforms increased 3.7% during the first quarter, Jeff Kinnaird, executive vice president for merchandising, told analysts.  Of those sales, “more than 50%” were fulfilled through brick-and-mortar stores. 

The retailer does not report dollar figures for ecommerce sales.

Adjusting to inflation

“While inflation impacted our average ticket increase this quarter, it wasn’t the only impact. As we’ve seen over the past several years, our customers continue to trade up for premium innovative products,” Ted Decker, CEO, said in a conference call May 17 with analysts. “We are not seeing the sensitivity to that level of inflation that we would have initially expected. Our customers are resilient.”

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According to Tom Caporaso, CEO of Clarus Commerce, a firm that builds loyalty programs for retailers, professional contractors are particularly resilient.

“At the beginning of the pandemic, Home Depot saw unprecedented sales growth from a new wave of stuck-at-home improvement projects. As that trend began to subside, Home Depot’s most loyal consumer base likely reverted back to DIY experts and business owners,” Caporaso told Digital Commerce 360. “Home Depot’s loyalty program, Pro Xtra, is smartly made with industry professionals and military members in mind. While industry pros and military make up just 5% of Home Depot’s whole customer base, this demographic accounts for 45% of the retailer’s sales — which is significant.”

Decker also said the retailer does not expect a further rise in inflation.

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“We think inflation doesn’t go up necessarily from where we are, but then it would hold steady at this double-digit, low 10ish percent in our product categories through the balance of the year,” he said.

U.S. inflation declined slightly to an 8.3% annual rate in April, according to the U.S. Labor Department, but remained close to the highest levels seen in four decades.

“It’s a very unique year in that the inflation in (the average) ticket is higher than the norm for sure. But again, the consumers are hanging in there,” Decker said.

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Home Depot is No.4 in the 2022 Digital Commerce 360 Top 1000

Home Depot’s improved outlook

The home-improvement giant also raised its forecast for the remainder of fiscal 2022.

Home Depot now expects sales growth of about 3% and earnings growth in the mid-single digits.

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For the quarter ended May 1, 2022, Home Depot reported:

  • Net earnings $4.23 billion, a rise of 6.0% from the $4.14 billion reported a year earlier.
  • Operating income of $5.92 billion, an increase of 2.6% from the $5.78 billion in the comparable period of the prior year.
  • Operating expenses of $7.21 billion, a jump of 3.7% for the $6.96 billion in Q1 of fiscal 2021.

Percentage changes may not align exactly with dollar figures due to rounding.

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