Home Improvement Sales Up, Professionals Lead the Way
Industry Leaders Posting Good Numbers
Home improvement boomed during the pandemic, bucking the broader economic trend. Since 2019, both Lowe’s (LOW) and The Home Depot (HD) have grown net sales by at least 30%. Before COVID-19 hit, both companies’ annual sales grew by around 5% on average.
Sales remained on an upward trend during the most recent quarter. Lowe’s sales expanded by 5% during that time, while Home Depot’s revenue rose just over 8%. Looking ahead, both companies expect sales to remain flat or grow slightly for the rest of the year — analysts find that impressive given the gains notched during the pandemic.
Professional Contractors Driving Sales
Lowe’s and Home Depot say they’re selling more products to professional customers than do-it-yourself types. Lowe’s reports last quarter’s sales to plumbers and general contractors were 23% higher than the same period in 2020.
Analysts note this is partly due to people being more willing to invite contractors into their home for projects with COVID-19 case numbers falling. It also seems people routinely started work on their own and then hired professionals to finish up. Lowe’s organized a survey last month with a majority of respondents saying they regretted starting DIY projects.
Forecasting Continued Growth
Market observers contend the rise of work-from-home and hybrid scheduling bodes well for the home improvement sector. Lowe’s executives argue the company is shielded from rising interest rates with historically high sales numbers amid rate hikes. Also, around 60% of Lowe’s sales come from maintenance and repair projects — which remain steady regardless of economic trends.
The ongoing supply-chain crisis puts Home Depot and Lowe’s in a position to keep taking market share from smaller competitors as well. Larger companies benefit from the ability to buy in bulk and maintain inventory. Putting it all together, the sector as a whole is building from a solid foundation given recent gains and enduring consumer trends.
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