{"id":1173,"date":"2025-05-27T21:13:41","date_gmt":"2025-05-27T21:13:41","guid":{"rendered":"https:\/\/lightingnewsnow.com\/?p=1173"},"modified":"2025-05-28T13:36:01","modified_gmt":"2025-05-28T13:36:01","slug":"takeaways-from-home-depots-and-lowes-earnings-reports","status":"publish","type":"post","link":"https:\/\/lightingnewsnow.com\/?p=1173","title":{"rendered":"4 Take-Aways From Home Depot\u2019s & Lowe\u2019s Earnings Reports"},"content":{"rendered":"\n

Lighting showrooms that haven\u2019t felt the heat of competition from their local home centers \u2013 most notably The Home Depot and Lowe\u2019s \u2013 because they have relied on having more knowledgeable staff in comparison should pay attention to the strategies the two retail giants laid out in their most recent earnings reports on May 20 and 21 respectively. \u00a0<\/p>\n\n\n\n

After both home centers experienced a decrease in business in Q1, which they attributed to environmental conditions (i.e. snowstorms, wildfires, hurricanes, floods), each is gearing up to claw back market share.  <\/p>\n\n\n\n

While earnings calls are historically optimistic in nature, the latest messaging from both retailers was that they felt the worst economic news was behind them as fears of a recession seem to have subsided with the reduction in China tariffs and promising on-going trade negotiations with other countries.<\/p>\n\n\n\n

1.<\/strong> Greater emphasis on employee training and consumer-friendly tech tools.<\/strong><\/p>\n\n\n\n

According to Ann-Marie Campbell, Home Depot\u2019s senior executive vice president, the company is \u201ccontinuing to leverage existing tools like PocketGuide<\/a>,\u201d a mobile app that provides extensive product knowledge training for employees, including tutorials and how-to guides. She said, \u201cWe are also investing in additional training opportunities\u2026and introducing new tools using generative AI that leverages our internal data and deep knowledge base to provide store associates quick access to operational and product knowledge via their HD phone.\u201d<\/p>\n\n\n\n

Employee retention and satisfaction are also points of focus. \u201cRecently, we conducted our annual Voice of the Associate survey, which showed improved scores. It is clear that as we invest more broadly in our associates \u2013 including through tools and education \u2013 we continue to see record retention rates, better engagement, and improved customer service,\u201d Campbell noted.  <\/p>\n\n\n\n

Billy Bastek, executive vice president of merchandising for Home Depot, added, \u201cDuring the back half of last year, we began rolling out a new feature on our website called Magic Apron<\/a>, a generative AI tool that helps customers find the answers they need related to their home improvement projects. Whether summarizing product reviews, or answering live questions with our proprietary expertise, Magic Apron has seen strong customer engagement contributing to growth in online conversion. Our customers have always relied on the expertise of our associates in our stores to answer questions and help them solve problems. Magic Apron is designed to bring that same expertise to the digital world, leveraging our proprietary knowledge base to support our customers and give them the confidence to tackle their home improvement projects, anytime, anywhere.\u201d<\/p>\n\n\n\n

2. They\u2019ve been diversifying their supply chains for longer than you thought.<\/strong><\/p>\n\n\n\n

Marvin Ellison, chairman and CEO of Lowe\u2019s told investors, \u201cTo provide a better perspective about our global sourcing, roughly 60% of our purchases originate in the U.S. Over the past several years, we\u2019ve been partnering with our private and national brand suppliers to diversify our global sourcing efforts. As a result, approximately 20% of our purchase volume is currently concentrated in China. And although we\u2019re pleased with this reduced dependency, we\u2019re not satisfied \u2014 and we\u2019re working to accelerate our diversification efforts.\u201d<\/p>\n\n\n\n

Bill Boltz, executive director of merchandising for Lowe\u2019s, added, \u201cI think it\u2019s important that everyone understands how we look at global sourcing. We look at it from two lenses \u2013 direct and indirect \u2013 where direct is where we direct import, and indirect is where we purchase from suppliers, and they are the importer of record. And you can understand where some of those categories fall \u2013 a lot of holiday trim and tree, ceiling fans, small appliances, and tools make up that 20% [from China] \u2013 but we\u2019ve been working hard over the last four or five years to diversify and partner closely to find different sourcing locations.\u201d<\/p>\n\n\n\n

Home Depot is also trying hard to squeeze those percentages. Ted Decker, president & CEO, stated, \u201cToday, more than 50 percent of our purchases are sourced in the U.S. Over the last several years, we have worked diligently with our vendors to further diversify our global supply chain. During that period, the vast majority of our supplier partners developed diversified sourcing strategies across several countries, including the United States. As a result, we now have tremendous sourcing flexibility. We are already taking action and anticipate that 12 months from now, no single country outside of the U.S. will represent more than 10% of our purchases.\u201d<\/p>\n\n\n\n

3. More sales are coming from smaller jobs.<\/strong><\/p>\n\n\n\n

With the pace of home building having slowed over the past year, those tract home developments and large-scale home construction jobs are not accounting for as much of the lion\u2019s share of the home center business lately. Instead, it is the smaller renovations \u2013 granted, lots<\/em> of them \u2013 that are ringing the cash registers.   <\/p>\n\n\n\n

One reason for the decrease in larger home remodeling projects is the stubbornly high interest rates; big renovation plans often mean homeowners must apply for financing.  <\/p>\n\n\n\n

Tip<\/strong>: Lighting showrooms can leverage this fact in their messaging to homeowners that lighting upgrades in key areas such as the kitchen, bath, front door entrance and backyard, are much more budget-friendly alternatives to full-scale renovations and will provide immediately noticeable and positive results in a home\u2019s appearance.<\/p>\n\n\n\n

4.<\/strong> The home centers are attracting more affluent homeowners than in the past.<\/strong><\/p>\n\n\n\n

Noted Home Depot\u2019s Decker, \u201cOur consumer, the homeowner, remains healthy. For most people, their home is their biggest asset \u2014 and home prices continue to rise. This has led to record levels of home equity, giving our customers confidence to invest in their homes. The housing stock is aging, and 55 percent of homes are 40 years or older. And we know that as homes get older, they require more maintenance and updates.\u201d<\/p>\n\n\n\n

Decker added, \u201cThe thing to keep in mind is that we have a very different customer and a very different sort of use case for expenditure in home improvement. Our customer is one of the strongest in the economy. The average income is $110,000 \u2014 80% of our customers own their homes. We\u2019ve talked about how much home price appreciation they\u2019ve seen over the past year. Stock markets have recovered, job and wage growth are strong, so our customer is in a good spot right now.\u201d<\/p>\n\n\n\n

Lowe\u2019s Ellison has a similarly optimistic viewpoint. \u201cOverall, our consumer is in great shape, but the DIY customer is  pulling back on the large, big-ticket discretionary purchases. That is the issue that we\u2019re dealing with, and we believe that part of that is due to elevated mortgage rates and the mortgage rates not falling.\u201d<\/p>\n\n\n\n

Brandon Sink, chief financial officer for Lowe\u2019s, remarked, \u201cFor us in home improvement, especially big ticket, the affordability challenge remains the primary concern. The 30-year  mortgage [interest rate] is still around seven percent\u2026when it comes to the larger discretionary categories, consumers are mainly sitting on the sidelines. I think the good news is that it isn\u2019t getting any worse. As we look out, we\u2019re looking for a sustained increase in discretionary projects and DIY traffic.\u201d  <\/p>\n\n\n\n

Executives from both home centers said they are sharpening their analysis to continue to trim where they can in order to keep prices competitive.   <\/p>\n\n\n\n

Lowe\u2019s Boltz noted, \u201cWe\u2019re looking at our partnerships with both private brand and national brand suppliers to find different countries to produce this product. We\u2019re looking at it SKU by SKU, product category by product category, looking at line structures, looking at assortments, and looking at what makes sense going forward. We want to make sure that we do the right thing and  source it from the right location. Just because we found another country to produce it, it may not end up in the short term being the right country to do it right out of the gate. So we\u2019re taking a very disciplined approach.\u201d  <\/p>\n\n\n\n

Related articles<\/strong><\/p>\n\n\n\n

Recent Remodeling Market Forecasts Indicate Opportunity for Showrooms<\/a><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Lighting showrooms that haven\u2019t felt the heat of competition from their local home centers \u2013 most notably The Home Depot and Lowe\u2019s \u2013 because they have relied on having more knowledgeable staff in comparison should pay attention to the strategies the two retail giants laid out in their most recent earnings reports on May 20…<\/p>\n","protected":false},"author":2,"featured_media":1183,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":151,"footnotes":""},"categories":[11],"tags":[342,343,340,341],"class_list":["post-1173","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-earnings","tag-earnings-report","tag-home-depot","tag-lowes"],"yoast_head":"\n4 Take-Aways From Home Depot\u2019s & Lowe\u2019s Earnings Reports - Lighting News Now<\/title>\n<meta name=\"description\" content=\"Lighting showrooms should pay attention to the goals Home Depot and Lowe's laid out during their most recent earnings reports.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lightingnewsnow.com\/?p=1173\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"4 Take-Aways From Home Depot\u2019s & Lowe\u2019s Earnings Reports - 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