Home Depot, a major do-it-yourself and contractor supply retailer, reported its fourth-quarter and full-year 2023 results on February 20, showing modest declines in quarterly and annual sales.
The company's total sales for the quarter were $34.8 billion, down 2.9% from the same period last year, with U.S. comparable sales down 3.5%, including a 4.0% decline. The company's fourth-quarter gross margin was 33.1%, down 10 basis points from the same period last year.
Home Depot's fourth-quarter operating income was $4.14 billion, down 12.8% from a year earlier, and net income was $2.8 billion, down from $3.4 billion a year earlier.
The company disclosed that customer transaction volume in the fourth quarter was down 1.7% year-over-year. The average ticket price decreased by 1.3% to $88.87, and sales per retail square foot decreased by 3.6%. High-value transactions ($1,000 or more) decreased 6.9% year-over-year in the fourth quarter. These sales figures do not include the results of our subsidiary HD Supply.
Home Depot said the performance of professional and DIY customers is “relatively consistent” with each other, and the company's research shows that professional backlogs are down compared to a year ago, but stable. He stated that the company has maintained a high standard compared to past standards.
For the full year, The Home Depot's total sales in 2023 were $142.7 billion, down 3.0% from 2022. Comparable sales decreased 3.2% and U.S. comparable sales decreased 3.5%. Full-year gross profit margin was 33.4%, down from 33.5% in 2022.
The company's operating profit in 2023 was $21.7 billion, down 9.8% from 2022, and its net profit was $15.1 billion, lower than the $17.1 billion in 2022.
Full-year customer transaction volume decreased by 2.7% compared to 2022. The average ticket of $90.07 was down 0.3%. Retail sales per square foot decreased by 3.6%.
In Home Depot's fourth-quarter earnings call, Ted Decker, the company's chairman, president and CEO, said, “After three years of exceptional growth in our business, 2023 is the year for moderation.'' It's been a year,” he said. “During fiscal year 2023, we focused on several initiatives to strengthen our business, including creating the best interconnect experience, growing Pro Wallet share with our unique feature ecosystem, and launching new stores. We also remained true to our strategic investment in building a home improvement industry. We remain committed to the future of home improvement and our ability to grow our share in a large and fragmented market estimated at more than $950 billion. I am excited.”
Outlook for 2024
Looking ahead, the company expects annual sales in 2024 to increase approximately 1.0% compared to 2023. This includes an additional sales week that is expected to increase total sales by approximately $2.3 billion. Comparable sales, on the other hand, are expected to decline by approximately 1.0%.
Home Depot expects to add approximately 12 new stores in 2024, with full-year gross profit margins of approximately 33.9% and operating profit margins of 14.1%.
Other notes
- It was completed in December, Home Depot said on a fourth-quarter earnings call with industry analysts. Previously announced acquisitions Construction Resources is a distributor of design-oriented surfaces, appliances, and specialty construction products for professional contractors specializing in renovation, remodeling, and home construction.
- Home Depot will have 2,335 retail stores worldwide by the end of 2023, including 2,015 in the United States, 182 in Canada, and 138 in Mexico.
- In 2023, Home Depot opened 13 new stores (8 in the U.S. and 5 in Mexico).
- The company expects to open approximately 80 new stores over the next five years.
- Companywide digital sales increased approximately 2% year-over-year in the fourth quarter.