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Lowe’s Outperforms Home Depot in 1Q17 Revenue Growth

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Dec. 4 2020, Updated 10:50 a.m. ET

Lowe’s revenue growth

In 1Q17, Lowe’s (LOW) outperformed Home Depot (HD) with revenue growth of 10.7%. During the period, Lowe’s posted revenue of $16.9 billion compared to $15.2 billion in 1Q16.

The revenue growth was driven by the acquisition of RONA and Central Wholesalers and positive SSSG (same-store sales growth) of 1.9%. RONA generated $630 million in sales, which formed 4.2% of the total sales growth. Also, the company operated 2,137 stores by the end of 1Q17 compared to 1,860 stores in 1Q16.

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During the quarter, pro customers generated above-average sales in rough plumbing, lumber building materials, and electrical equipment as the recovery efforts continued after Hurricane Matthew and Louisiana flooding. The revenue growth of both the companies was also driven by positive macroeconomic factors such as the rise in the housing price index, higher housing turnover, and lower employment.

Home Depot’s revenue growth

In 1Q17, Home Depot posted revenues of $23.9 billion, a growth of 4.9% from $22.8 billion in 1Q16. The revenue growth was driven by growth in online sales, positive SSSG of 5.5%, and the addition of stores in the last 12 months.

Home Depot’s revenue was driven by above-average pro sales in the commercial and industrial lighting, gypsum, lumber, and wire categories. The company posted positive SSSG in all three of its US divisions. In international markets, the company posted positive SSSG in Canada and Mexico in their respective currencies. However, some of the revenue growth was offset by fluctuating foreign currency exchange rates and deferred sales.

Peer comparisons

During the same period, Williams-Sonoma (WSM) posted revenue growth of 1.3%, while Bed Bath & Beyond (BBBY) could post revenue growth of 2.0%.

Next, we’ll look at the SSSG of Home Depot and Lowe’s for 1Q17.

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