Home Depot, the bellwether for U.S. home remodeling and construction, reported strong sales and earnings yesterday. CEO Craig Menear called out the professional buyer as a key source of revenue. Cabinet makers, general contractors, remodelers, flooring, along with other trades and designers, buy at a much larger volume than do-it-yourselfers.
Figures we've heard quoted say 50 percent of all U.S. cabinets are sold by Home Depot. And professional buyers may buy two-thirds of the volume in certain categories. Pro-heavy categories at Home Depot include pressure-treated wood, dimensional lumber, HVAC, insulation, concrete and gypsum board, according to the discussion at yesterday's conference call.
Significantly, one of the increasingly important avenues for consumers to find professionals at Home Depot is the Red Beacon division, a kind of Angie's List acquired back in 2012. The extension of credit to professional builders and remodelers is a key connection to the market as well. It is unclear if professional customers were uniquely impacted by the data breach, but they may have been.
Notes Menear (in a Seeking Alpha transcript):
Both our consumer and Pro businesses grew during the quarter. The growth in our pro business continues to be anchored by our large spending Pro which grew at approximately 2x the company average. So as we look at the trends across our business broad-based geographical growth, strong comps and higher ticket installed projects growth with both our Pro and consumer and strength in the core of the store, we continue to see a recovering home-improvement market in the U.S.
Significant too is the strong Canada and Mexico remodeling and construction markets.
On the international front, our Canadian business posted comps above the company average and local currency for the quarter making it 12 quarters in a row of positive comp[arable sale]s. Comps in local currency for our Mexican business were in line with our company average yielding their 44th consecutive quarter of positive comps.
While we've been ensnared by years of uncertainty, the report and forecast from Home Depot bodes well for many of the segments touched by woodworking.
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