Home Depot announced their Q4 and full-year results for 2023, reporting a small dip in earnings.
The company says that 2023 proved to be a “year of moderation,” following “three years of exceptional growth.”
Home Depot increased their quarterly dividend by 7.7%, bringing it to $2.25 per share per quarter. The stock price is around $360 per share at the time of this posting.
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Q4 2023 Sales: $34.8 billion (down 2.9% from Q4 2022)
Q4 2023 Net Earnings: $2.8 billion (down 14.5% from Q4 2022)
2023 Sales: $152.7 billion (down 3.0% from 2022)
2023 Net Earnings: $15.1 billion (down 9.5% from 2022)
Home Depot also announced “approximately 12 new stores,” and a gross margin of 33.8%.
For 2024, Home Depot noted that the fiscal year will have 53 weeks, and that they project total sales growth of approximately 1%, including the 53rd week.
Organizational Changes
While looking at Home Depot’s investor news release portal, I found an October 2023 release that I had missed, with the headline The Home Depot Advances Approach to PRO.
It starts:
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The Home Depot today announced changes to align the organization around its largest growth opportunity – enabling its unique ecosystem to serve more pro customers and purchase opportunities.
They named Ann-Marie Campbell as a new senior executive vice president who will “assume responsibility for outside pro sales efforts as well as the company’s installation services business,” and Hector Padilla as an executive vice president of US stores and operations who will “lead the company’s three U.S. operating divisions comprising more than 2,000 U.S. stores.” Padilla will report to Campbell.
Campbell has been at Home Depot for 38 years, and Padilla for 29 years.
The announcement also says that:
Chip Devine, senior vice president of outside sales, will report to Campbell and will continue to drive growth with the complex pro. Tim Wilkerson, senior vice president of home services, will also report to Campbell.
Home Depot adds:
By combining the outside sales and service business with the global store organization, the company is bringing together its full ecosystem of deep expertise with its newest capabilities to serve pro customers – from the core pro customer working on smaller, simpler projects to pros working on larger, more complex projects.
Pro is our biggest growth opportunity, and in order to provide the products and capabilities pros need, we are evolving our organization and approach to better serve them.
It remains unclear what type of impact – if any – this will have for Pro customers.
Lowe’s, Home Depot’s top retail competitor, will announced their Q4 and 2023 financial performance next week, on 2/27/24.
DC
Guess HD has to close some stores to cut costs.
Stuart
No?
Chris
I’m sure you read the entire article so fast that you breezed right over that part…
“Home Depot also announced “approximately 12 new stores,” and a gross margin of 33.8%.”
You’re welcome.
Tator
Bring Hilti Nuron to at least an end cap at some stores would be nice!
Jason
The had Hilti endcaps until around 2012-2014 if I remember and ditched them when Fuel and Milwaukee branded sets came in, kind of a bummer but Hilti just isn’t mass appeal
William Adams
The thing which I would like to see stores do is to plan ahead and try for a Fourth of July event (in the States) where they fill all the endocaps with only things Made in the U.S.A.
Chris
Never going to happen. What an expensive idea to move ~1/10 of the stores entire inventory for a single day…
eddie sky
Yeah. Home Depot needs to wise up.
I wonder how much was loss/theft? Because I am sick and tired of going to HD/Lowes or any other big box with self-checkout and finding a wait to check out (whats the point), that some clerk is standing around waiting for customer with issue at checkout, store associates hanging out near carpet and bullshitting (two stores I’ve seen this, so its a thing) that should be at a checkout, and what is with a Saturday and only one retail register open, aside from one at the Pro checkout and always one or two self-checkout out of order?
And with paint at $70/gallon… I mean I should paint with milk or with gas, which both combined are still cheaper..
Scott K
Retail theft is a problem, but it isn’t a new one. It’s become an easy scapegoat, and the data doesn’t really support the assertions you hear on the news. Retailers also carry some of the blame for theft due to a lack of investment in people. Think about how hard it is to find someone in some of these stores – fewer employees and an over-reliance on tech,
Patrick T
At my closest Home Depot, they just hang out right in front of the self checkout to BS. They’re usually blocking one of the registers too.
Maybe I’m wrong, but it seems like the increases in loss/theft are of their own doing. Except for the busiest holiday weekend, the stores around me never had all of their checkout lines open. So, get rid of a couple of employees that did actual work and replace them with hand scanners and screens to reduce costs?
Steve
Sales are down slightly, which I don’t think is hughly surprising in the market they are in. I don’t see any dynamic growth in the forseeable future. Looks like a net profit of right at 10%, which is good. Based on what I see, they are doing ok. They’ll have to get creative with costs if they can’t grow, which is everyones downfall. However, there should be some ways to eek out even a little growth…
Eliot Truelove
I think across the industry you cannot sustain growth without sacrificing quality. The quality of Home Depot has gone downhill for years now, at least at my local locations.
Many of the displays are removed and the tools are locked up (likely due to theft, including by sketchy employees), the end caps are nonsensical; placing unrelated items on the ends of various aisles, the aisles are often barely stocked and have massive amounts of the stock wrapped up sitting far above, not to mention the lack of availability of most anything non-TTI or Home Depot branded (Bosch and Makita obviously are meager, but even DeWalt is looking super thin).
I was in the paint section today and an employee asked if I needed any help, I said I was heading to get some oil based primer (Kilz, BIN, etc) and he said they don’t have any oil, only Latex.
I resisted the urge to pull a Ron Swanson from Parks And Rec and say “I know more than you” as I went to the aisle and pulled out a can of oil based primer.
I was contemplating showing that worker who said it that looked like he was in his 80s and his assistant who looked like he had a learning disability of some sort (no judgement, just an observation, my youngest brother is autistic) that they do in fact carry various oil based primers, but I didn’t want to make either of them feel bad, and I shouldn’t have to educate the employees.
Home Depot will be the go to for many for fasteners, fixtures, consumables, etc, but for the most part specialist stores for various trades, like tile, plumbing, lumber yards, etc are becoming much more appealing for even the small time contractor.
As a Home Depot guy who typically turned their nose up at Lowes for many years, I’ve been going in there more and more, and my last few big tool purchases were from there (2 Werner extension benches and just last month a DeWalt table saw).
I’m curious to see Lowes report.
Stuart
I have found that customer experiences can vary between stores. Sounds like your stores might not have the best managers.
It’s likely they are locked up due to theft, which has been a problem affecting broad retailers. But what’s your basis for saying the “sketchy employees” are responsible for this?
Sounds like maybe the stores are poorly managed or understaffed.
fred
I have 2 HD’s about equidistant from my principal residence. One is head and shoulders above the other in almost every way. Surprisingly (to me anyway) the one that I find to be the poor is down the street from a Lowes – so one might think that competition would drive better performance.
Eliot Truelove
The “sketchy employee” comment does not come out of a bacuum.
I bought a “new in box” tool kit on Facebook marketplace from a seller and they removed the listing and I wasn’t able to rate them after the sale, then a month or two later the seller sold another new in box tool kit and the same listing removal and unable to rate them, and then a few weeks later I’m in Home Depot and I see that they work there. I saw him, but he didn’t see me.
What I want to know is did he buy a clearance item himself and sell it for a profit, or did it “fall off the back of a truck”?
I was in a different Home Depot today and it was better stocked of most items, but the power tool section was even more meager of non TTI items, and there was Milwaukee and Ryobi stuff in nearly ever aisle beside the power tool aisles.
It truly makes me wonder if Home Depot is owned by TTI and is a TTI storefront by another name, even though I know it’s not.
Stuart
That sounds strange and potentially sketchy to me, but in my opinion doesn’t justify broad claims about Home Depot associates likely stealing products.
This isn’t the first time you complained about TTI brands being popular and Makita having “seriously slim pickings” at Home Depot stores.
Home Depot’s business is to sell things to their customers.
It seems to me that Home Depot’s displays are shaped by sales performance trends.
If some brands’ tools consistently sell better than Makita’s, why wouldn’t Home Depot arrange their sales floor accordingly?
Scott K
One thing I learned from an HD employee a few years back is that some elements of stocking are managed by third parties. Things like those drawers of specialty fasteners are supposedly inventoried and refilled whenever the company responsible comes through which isn’t always on a regular schedule. This can be really frustrating when a drawer is in a state of total disarray or is half empty.
Badger12345
In the midwest we have the privately owned home improvement chain Menards. While their tool selection is marginal to poor the rest of their building products span the range of quality and are offered at competitive prices. During weekdays the Menards near me has a lot of contractor vehicles (general contractors, plumbers, electricians, etc.) At our local Home Depot I seldom see contractor vehicles.
Menards offers a discount program for contractors, but they don’t offer services that compete with contractors. I wonder if Home Depot is going to be limited in selling to professional contractors because of the inherent conflict of interest of their business model.
Seth Goodson
I would agree with you. That was tempered a little bit with me choosing to buy at HD over Menards sometimes because of HD’s matching of Menards rebates however that is no longer. Which in my opinion is going to push me back to Menards more. Time will tell. Disappointing for sure.
Patrick T
I find myself at Menards more and more. They often have the best price of all the box stores around, even before the rebate.
Agree that their power tool selection isn’t great. They do stock some knipex and a pretty full selection of Chanel Lock and some other USA-made tools and accessories which I appreciate.
As a home-gamer, I also appreciate their indoor lumber yard. For the projects that I do, they have been great.
Steve
How can you guys even question whether theft is an issue?
Locally, we have fully masked, hoodie wearing, flash mobs,draining entire sections of stores with valuable merchandise in 30 to 90 seconds.
And it’s not just tools. It’s anything that they can sell at high value. Jewelry stores, liquor stores, tobacco, etc.
They stole over 3 million dollars of high value clothing in minutes from a outlet store.
The police have sent out video by way of the news of 2 guys who have stolen over 100k of tools from area Menard’s.
There are also local news reports of employees putting high value items in dumpsters and coming back later to retrieve them. (which is why managers are putting hefty padlocks on dumpsters, or putting the dumpsters in cages)
Even my local Kroger stores are caging up health and beauty items (which is a pita! Toothpaste, really, is what I said to the cashier. She said sadly, yes. They steal anything)
Seth Goodson
Definitely an issue. They will steal anything for sure. Saw a lady run out of Aldi with a handful of groceries. Menards is the best at pressing charges if caught. They don’t play.
Curtis
Very discouraging. I heard that some of the thievery is supplying street ‘stores’, selling basics to homeless people for cheap. Which explains the toothpaste. It’s a broken world in more ways than one.
blocky
Things are bad when the cost/benefit analysis drives or incentivizes people to coordinate mass theft from corporations. If major corporations were legally not allowed to show profit or payout shareholders until every employee was paid a solid living wage, we wouldn’t have this climate.
Frankly, if you listen to the news in a comprehensive way, corporations have been smashing profit records for three years while working people have muddled through. Now that the boom is cooling, and layoffs are happening, it’s going to get worse before it has a chance to get better.