What Drove Home Depot’s Revenue in 3Q17?

3Q17 performance

Home Depot (HD) posted revenues of $25.0 billion in 3Q17, which represents growth of 8.1% from $23.2 billion in 3Q16. Analysts were expecting the company to post revenue of $24.6 billion.

What Drove Home Depot’s Revenue in 3Q17?

Revenue growth

The revenue growth was driven by positive SSSG (same-store sales growth) and the addition of new restaurants. By the end of 3Q17, the company operated 2,283 stores across the world compared to 2,276 stores in 3Q16. The company opened one restaurant in Mexico during 3Q17.

During the quarter, storm-related categories such as generators, wet dry bags, tarps, and ladders have seen double-digit SSSG. The company has estimated that hurricane-related sales have contributed $282 million to the company’s total revenue. The implementation of its interconnected strategy has helped the company in driving both in-store and online sales. During 3Q17, the company’s online sales grew 19.0%, contributing 6.2% of the total sales. Of the total online sales, 45% of the orders were picked up from stores.

Big ticket sales, or transactions above $900, which form 22.0% of US sales, were up 12.1%, and transactions below $50, which form approximately 16% of the total US sales, were up 1.8%. Both Mexico and Canada have posted positive SSSG in their respective currencies. Also, the weak US dollar has positively impacted the company’s total revenues by $102 million.

Peers’ comparisons

During the same period, Lowe’s Companies (LOW) and Williams-Sonoma (WSM) are expected to post revenue growth of 5.2% and 3.8%, respectively. However, the revenue of Bed Bath & Beyond (BBBY) is expected to fall 1.9% during the same period.

Next, we’ll look at Home Depot’s 3Q17 SSSG.