Why Home Depot’s Revenue Growth Beat Lowe’s in 4Q17


Mar. 14 2018, Updated 1:30 p.m. ET

Home Depot’s performance

In 4Q17, Home Depot (HD) posted revenue of $23.9 billion, which represents a growth of 7.6% from $22.2 billion in 4Q16. The company has outperformed analysts’ estimate by 0.8%.

Home Depot’s revenue growth was driven by positive SSSG (same-store sales growth) and the addition of new stores in the last four quarters. The company posted SSSG of 7.5% in 4Q17, which we’ll look at in detail in the next part of this series. At the end of 4Q17, HD operated 2,284 stores compared to 2,278 stores in 4Q16. The addition of six new stores, three in the United States and three in Mexico, drove the company’s revenue during the quarter. Recovery efforts after the devastation caused by Hurricanes Harvey and Irma generated $380 million in sales, which represents a revenue growth of 1.7%.

Article continues below advertisement

Lowe’s performance

Lowe’s Companies (LOW) posted revenue of $15.5 billion in 4Q17, which represents a fall of 1.8% from $15.8 billion in 4Q16. It had one extra week of operation in 4Q16, which contributed $950 million to its revenue. The extra week also caused a calendar shift during the year, which negatively impacted the company’s revenue in 4Q17.

Some of the declines in revenue were offset by positive SSSG of 4.1%, the addition of new stores, and the acquisition of its Maintenance Supply Headquarters. By the end of 4Q17, the company operated 2,152 stores compared to 2,129 in 4Q16. The addition of 23 new stores in the last four quarters contributed 0.6% to its 4Q17 revenue, while the Maintenance Supply Headquarters acquisition contributed 0.4%.

During 4Q17, both Williams-Sonoma (WSM) and Bed Bath & Beyond (BBBY) are expected to post revenue growth of 4.1%.

Next, we’ll look at SSSG for both Home Depot and Lowe’s.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.