The Home Depot Inc. reported that sales declined in the first quarter of 2024 ended April 28 due to challenges in the broader economy. B2B and Pro sales were equally impacted, while online sales grew.

Home Depot Q1 sales declined 2.3% year over year to $36.4 billion. That was on top of declines last year, when 2023 Q1 sales were down 4.2% year over year. 

Meanwhile, Q1 comparable sales declined 2.8%, and U.S. comparable sales decreased 3.2%. Home Depot’s net earnings for the quarter were $3.6 billion, a year-over-year drop from $3.9 billion.

“The team executed at a high level in the quarter, and we continued to grow market share,” CEO Ted Decker said in a written statement. “And while the quarter was impacted by a delayed start to spring and continued softness in certain larger discretionary projects, we feel great about our store readiness, our product assortment in stores and online, and our associate engagement.”

Home Depot is No. 4 in the Top 1000, Digital Commerce 360’s database of the largest online retailers in North America. Digital Commerce 360 categorizes Home Depot as a Hardware & Home Improvement retailer.

Home Depot Q1 online sales

While overall Home Depot Q1 sales declined, online sales grew over the same period. Digital sales grew 3.3% year over year, the retailer said. Nearly half of those sales were fulfilled through stores.

Making the online shopping experience at Home Depot more convenient was a top priority in Q1.

“We are incredibly focused on removing friction for our customers to create an excellent, interconnected shopping experience,” executive vice president of merchandising Billy Bastek told investors on May 14. “We continue to work on improving our online search functionality and serving the most relevant product offerings to our customers.”

Home Depot improved its search engine by combining keywords and other customer behavior to deliver more targeted results, he said. It also added improved filtering capabilities. These advances together drove “strong results in our online business,” he said.

Home Depot also made returning online orders easier, with more than 70% of orders now eligible for self-service returns at UPS stores.

Home Depot DIY and B2B sales

The home improvement retailer serves both do-it-yourself (DIY) customers and B2B customers, whom it refers to as Pros. DIY and Pro sales performed about the same in the quarter, both declining year over year, Bastek said.

Within the DIY sector, consumers pulled back on spending on large home projects during the quarter across income groups, Home Depot said. Some consumers are waiting on big projects because they anticipate moving into a new home when interest rates come down, the retailer added.

Big-ticket projects, defined as tickets over $1,000, declined 6.5% year over year. That was also true of projects customers typically use financing on, such as kitchen and bathroom remodels.

Relying more on smaller projects could make things more difficult for Home Depot going forward.

“The danger here is that while Home Depot has a commanding position, it faces much more competition on the light-side improvement space from smaller improvement players, garden centers, and specialists like Sherwin Williams in categories like paint,” said Neil Saunders, managing director at retail analysis firm Global Data. “From our data, consumers are now shopping around more to find the best bargains and deals.”

Home Depot saw stronger sales from larger Pro customers than smaller contractors in the quarter, it said.

The retailer recently invested in acquisitions to grow its B2B market. In March, it acquired SRS Distribution for $18.25 billion.  The acquisition was both “complementary and additive” to Home Depot’s current offerings, Decker said at the time. SRS will expand Home Depot’s total addressable market by $50 billion, to about $1 trillion, Home Depot said. Prior to that, it also purchased International Designs Group LLC in late 2023.

“Pockets of softness remain, and Home Depot can no longer rely on the pro market to pull it out of the hole on the consumer side,” Saunders said. “That said, we believe that Home Depot is holding on to pros far better than Lowe’s, mainly because it is seen as being stronger on prices, service, and the depth of range it offers.”

Home Depot earnings

For its fiscal first quarter ended April 28, 2024, Home Depot reported:

• Total sales declined 2.3% year over year to $36.4 billion.
• Home Depot online sales grew 3.3%.
• Comparable sales declined 2.8%. In the U.S., they decreased 3.2%.
• Net earnings were $3.6 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s comparison of Home Depot and Lowe’s online sales.

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