The Home Depot reported a 4% year-over-year increase in online sales during its fiscal Q3, which ended Oct. 27, 2024.
During the period, Home Depot fulfilled nearly half of those orders through its stores, said Billy Bastek, executive vice president of merchandising, on an earnings call with investors.
“We are focused on continuing to improve our interconnected retail experience, whether it is our faster delivery speeds, our more relevant and personalized search results or our enhanced product review summaries powered by AI, all of which are leading to greater purchasing confidence for our customers,” Bastek stated.
Home Depot net sales in Q3 reached $40.22 billion. That’s 6.6% year-over-year growth from $37.71 billion in Q3 2023. It’s also a quarter-over-quarter decline from $43.2 billion in Q2.
However, Home Depot reported that its average order value (AOV) decreased slightly (0.8%) to $88.65 in the quarter, from $89.36 the year before. Similarly, its customer transactions also declined slightly (0.2%) to about 399 million in Q3 2024 from 399.8 million the prior year. Transactions over $1,000 also decreased 6.8% year over year.
Home Depot said its AOV and transaction data does not include results from HD Supply or SRS Distribution.
“We continue to see softer engagement in larger discretionary projects where customers typically use financing to fund the project, such as kitchen and bath remodels,” Bastek said.
The Home Depot Inc. ranks No. 4 in the Top 1000 Database, Digital Commerce 360’s ranking of the largest online retailers in North America. It’s also the top-ranked retailer in the Top 1000’s Hardware & Home Improvement category.
Home Depot online sales in Q3
Bastek added that Home Depot is “pleased with” its annual Labor Day and Halloween sales events. More specifically, he said the Home Depot Halloween sales marked a record year both in-store and online.
Still, Home Depot comparable sales declined 1.3% year over year, with U.S. stores’ comparable sales declining 1.2%.
Digital Commerce 360 projects that Home Depot’s web sales in 2024 will reach $23.6 billion. That would be 4.5% growth over its 2023 online sales.
Annual Home Depot web sales growth
Home Depot sales in Q3 by month:
- August: Decreased 3.3% (down 3.5% in the U.S.)
- September: Decreased 2.3% (down 2.2% in the U.S.)
- October: Increased 1% (up 1.4% in the U.S.)
Home Depot works to make fulfillment facilities faster
President and CEO Ted Decker told investors on the earnings call that Home Depot expanded its assortment at its fulfillment facilities to allow for faster delivery speeds across more products.
Over the last few years, he said, Home Depot has built a network of supply chain facilities, including 19 fulfillment centers. These centers allow the retailer to reach 90% of the U.S. population with same- or next-day delivery, he added.
The retailer made “significant website enhancements” to communicate its faster delivery options to customers, Decker said. He noted that many customers did not know about Home Depot’s “robust” delivery options. So, in Q3, the retailer launched a marketing campaign to build awareness of its faster delivery speeds.
“While this is just launched, we are seeing the intended results: greater customer engagement, higher conversion and incremental sales,” Decker said.
Home Depot also opened five new stores in Q3, bringing its total store count to 2,345.
SRS acquisition
Q3 also marked the first full fiscal quarter since Home Depot acquired SRS Distribution. Home Depot anticipates SRS delivering $6.4 billion in sales.
SRS Distribution is a residential specialty trade distribution company with professional roofers, landscapers and pool contractors as customers. In 2023, it recorded about $10 billion in revenue, and $1 billion in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). SRS has a sales force of more than 2,000.
Home Depot agreed to acquire SRS for $18.25 billion on March 28.
“The immediate focus with SRS is supporting their growth both organically and through acquisitions,” Decker said. “However, we are also seeing incremental cross-sale opportunities from our distinct product catalogs and competitive advantages.”
In Q3, Home Depot gross margin decreased about 40 basis points year over year, to 33.4%. The company attributes that decrease primarily to its SRS acquisition.
Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s update on Home Depot online sales.
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