Home Depot’s total online sales for fiscal Q1 decreased about 2.9% compared with a year prior. Competitor Lowe’s online sales grew 6% in Q1 2023.

The Home Depot Inc. and Lowe’s Cos. Inc. both reported a decrease in total sales for their most recent earnings filings. However, the competing home improvement merchants fared differently when it came to ecommerce. Home Depot’s total online sales for the fiscal first quarter ended April 30, 2023, decreased about 2.9% compared with a year prior. Competitor Lowe’s online sales grew 6% for the first quarter ended May 5, 2023.

Both merchants cited falling lumber prices and unfavorable weather conditions as reasons why do-it-yourself consumers pulled back on projects in Q1.

Home Depot Q1 2023 earnings

Net sales fell to $37.25 billion in the fiscal first quarter of 2023. That’s down 4.2% from $28.90 billion during the same quarter in 2022.

Net earnings were also down 8.5% at $3.9 billion, compared with $4.2 billion a year prior.

Home Depot chair, president and CEO Ted Decker told investors that after 43% growth in three years, the merchant expected “demand would moderate in fiscal 2023, which our first quarter results reflect,” according to a Seeking Alpha transcript of the earnings call with investors on May 16.


While do-it-yourself (DIY) customers bought more compared with Home Depot’s B2B Pro customers, sales to both were negative compared with the prior year, Decker said. Home Depot’s B2B Pro business sells to professional home improvement and other contractors.

The merchant still uses stores to fulfill some of its online orders. It fulfilled 45% of online orders through stores during the period.

Comparable retail sales for expensive items were down 6.5%, Billy Bastek, executive vice president, merchandising, told investors. These are for transactions over $1,000.

Lowe’s Q1 2023 earnings

Lowe’s net sales were $22.35 billion, down nearly 6% compared with $22.66 billion a year earlier.


The retailer’s net earnings for the three-month period ended May 5 were $2.26 billion, compared with $2.33 billion the year prior.

Online sales increased 6%, representing more than a 10% sales penetration. Lowe’s will continue to focus on upgrading its B2B Pro digital experience with new tools and personalization, said Marvin Ellison, chairman, president and CEO, during the May 23 earnings call.

Comparable sales decreased 4.3% compared with a year earlier.

Supply chain improvements

Ellison told investors Lowe’s continues to roll out its market delivery model, bringing the merchant to 12 geographic regions across the U.S. supporting 1,100 stores. Improvements include delivering large and bulky products more efficiently.

“And with our improved online capabilities, like easy scheduling and order tracking, we continue to see more and more of our customers getting comfortable completing their purchases online,” Ellison said.

Lowe’s to expand rural products in some existing stores

Lowe’s plans to add rural assortment merchandise to as many as 300 existing stores by the end of year. The stores will offer farm, ranch and outdoor products. This is in an effort “to position Lowe’s as a one-stop-shop to make it convenient for rural customers to get what they need in one shopping trip,” Ellison said. The rural store locations will offer merchandise for pets, livestock, trailers, utility vehicles, specialized hardware, and apparel from clothing brand Carhartt.

“While in years past, our penetration of rural and remote stores was viewed as a competitive disadvantage,” Ellison told analysts, “we now expect that these stores will be a key component of our operating profit growth over the next three to five years.”


The year ahead for home improvement

Deflation in lumber will be less of a headwind in 2023, says Brian Yarbrough, an analyst at financial investment firm Edward Jones. Consumer discretionary spending habits are more telling, he says.

Home Depot has had three years of unprecedented growth. As its Pro customers shift from bigger projects to small- to mid-sized projects, the merchant will continue to experience a slowdown, he says.

“Home Depot might feel some of that headwind in the near term,” Yarbrough says.

“We saw this huge pendulum shift during the pandemic for the home improvement category,” he says. “Now we’re seeing it normalized. Consumer spending is shifting back to the services sectors like travel and entertainment.


“But homes will get older,” Yarbrough says. “They will require more repair and maintenance in the long term.”

Meanwhile, over the last two to three years, Lowe’s has upgraded from a 15-year-old [technology] legacy software system to the cloud.

“Now, Lowe’s system can handle a lot more traffic,” Yarbrough says. “Lowe’s has also updated online transaction capabilities. It has been playing catch up, in a sense, with Home Depot. And I think they’re there now.”

Lowe’s plans to expand into rural locations is an interesting move, Yarbrough says. He doesn’t believe the move will affect Home Depot so much as it might Tractor Supply. Tractor Supply is conveniently located to rural shoppers and has a strong welcome/loyalty program, Yarbrough says. It also appeals to consumers on the go — its mobile app accounted for 20% of digital sales in Q1 2023.


“It’s early, so let’s not get too excited here,” he says. “But if this strategy works and starts driving more customers to [Lowe’s rural stores] and drives better sales, it will be an interesting dynamic to watch over the next several years.”

Home Depot ranks No. 4 in the 2023 Digital Commerce 360 Top 1000 database. Lowe’s ranks No. 12.

Home Depot earnings

For the first fiscal quarter ended Apr. 30, 2023, Home Depot reported:

  • Net sales decreased to $37.25 billion. That’s down 4.2% from $38.90 billion from the comparable period a year earlier.
  • Net earnings were $3.9 billion, down 8.5% from $4.2 billion compared to a year earlier.
  • Online sales decreased 2.9% for the quarter, compared with the same quarter in 2022.
  • Comparable sales in the U.S. decreased 4.6%.

Lowe’s earnings

For the quarter ended May 5, 2023, Lowe’s reported:

  • Net sales increased to $22.35 billion. That’s down nearly 6% from $23.66 billion for the comparable period a year earlier.
  • Net earnings was $2.26 billion, compared with $2.33 billion a year earlier.
  • Online sales grew 6.0% compared with the same quarter in 2022.
  • Comparable sales decreased 4.3%.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.


Follow us on LinkedInTwitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.