The Home Depot has been making strategic investments to strengthen its position in the professional market, geared toward its digital and in-store offerings. The company’s initiatives are designed to deliver greater value and convenience to its pro customers, fueling growth despite a challenging macroeconomic environment.
During the company’s fourth-quarter earnings call Tuesday (Feb. 25), company executives extolled this point, evidenced by a 9% increase in digital sales and growth in its professional market.
“Growing pro is a key part of our growth strategy,” Ann-Marie Campbell, senior executive vice president, The Home Depot, told analysts. “It’s clear our initiatives are working with an improved shopping experience for all our pro members. We know all pros shop our stores and we have invested to simplify and enhance the in-store shopping experience.”
Home Depot’s pro strategy focuses on improving the shopping experience for professionals through digital upgrades like job site deliveries, bulk pricing and personalized accounts. The company has also increased workforce training to provide better support to pros. Additionally, Home Depot expanded its presence by opening 12 new stores in 2024 and plans to open 13 more in 2025.
Despite challenges such as high interest rates, the company has seen growth in its pro segment, which has helped offset slower demand from consumers.
“All these capabilities allow us to win a greater share of wallet with all our pro members,” Campbell said. “We’re gaining traction, and we’re seeing a meaningful lift in sales across all pros for all occasions. We’ve improved our delivery experience, which is the fastest it’s ever been, and we continue to focus on the best customer experience.”
Jordan Broggi, executive vice president, customer experience and president, online, noted online and pro consumers are benefiting from an elevated site experience from a browsing and search perspective.
“All those investments are coming together to drive an improvement in conversion rates and increased engagement across channels,” Broggi said. “We’re excited about the momentum there and excited about the investments we’ve made there.”
Home Depot’s focus on omnichannel shoppers is arguably a good one, supported by a PYMNTS Intelligence report, “2024 Global Digital Shopping Index: The Rise of the Click-and-Mortar™ Shopper and What It Means for Merchants,” commissioned by Visa Acceptance Solutions. The report revealed nearly 40% of consumers are now click-and-mortar shoppers, who use both digital and physical channels. For these shoppers, the physical store serves as an extension of their online experiences.
For the first time in two years, Home Depot reported positive comparable sales, rising 0.8% in the fourth quarter, and offered guidance of a 1% increase in comp sales in the first quarter. Fourth-quarter sales rose 14.1% to $39.7 billion.
For the full fiscal year 2024, sales increased 4.5%, to $159.5 billion, but comparable sales dropped 1.8%.
“Our fourth-quarter results exceeded our expectations as we saw greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects,” CEO Ted Decker said. “Throughout the year, we remained steadfast in our investments across our strategic initiatives to position ourselves for continued success, despite uncertain macroeconomic conditions and a higher interest rate environment that impacted home improvement demand.”
Company officials provided first-quarter guidance of a 2.8% rise in total sales amid a volatile macroeconomic environment.
“We feel great about the investments we made in 2024, the progress we made, and the significant opportunities as we look ahead,” CFO Richard McPhail said. “Uncertainties still remain. We expect our underlying momentum to continue into 2025, but we’re not assuming any meaningful changes to the macroeconomic environment. We expect continued pressure on larger remodeling projects.”
McPhail added Home Depot’s customers “remain very healthy. As homes continue to age and people are staying in those homes, they’ll eventually do larger remodeling projects. We’re just not sure that comes in 2025 at an accelerated pace.”
