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Home improvement stores have generally done well throughout the so-called retail apocalypse. That's partly because much of the merchandise sold by The Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) does not lend itself well to delivery, while other items are things consumers want to see before buying. A contractor won't be going to Amazon to buy drywall or 2x4s, and non-professional shoppers likely won't pick a paint color online -- or buy a light fixture or other item that will be installed in their home.
These factors have protected the two major home improvement warehouse chains from digital disruption. That protection, however, is not absolute, and improving delivery options and digital technology could eventually erode these protective walls.
Home Depot posted a gain in same-store sales in the first quarter. Image source: The Home Depot.
How is Home Depot doing?
Home Depot reported $24.9 billion in first-quarter sales, a 4.4% increase over the same period last year. Comparable store sales rose 4.2% globally and 4.2% in the United States, while net earnings per share came in at $2.08 per share, up from $1.67 in Q1 2017.
Those numbers compared favorably to Lowe's, which saw Q1 sales rise 3.0% to $17.4 billion, with comparable store sales rising by 0.6%. The No. 2 home improvement chain posted EPS of $1.19 for the period, up from an adjusted $1.03 in Q1 2017.
Home Depot CEO Craig Menear was pleased with the results. In his remarks for the Q1 earnings release, he noted that the spring selling season had started slowly, but that the company had recovered.
"Outside of our seasonal business, we had solid results in all markets and categories and are seeing strong momentum in all lines of business during these first few weeks of May," he said. "These trends, as well as a favorable housing and macroeconomic backdrop, give us confidence to reaffirm our sales and earnings guidance for fiscal 2018."
Can Home Depot continue its success?
The home improvement chain has been performing strongly, and there's no reason to believe that will change. Menear has not rested upon his laurels, and he is taking steps to build on the company's winning areas.
"Part of the strength we saw in the business can be attributed to the health of our pro customer, as pro sales once again outpaced DIY sales in the quarter," he said during the Q1 earnings call. "Investments aimed at deepening our relationship with our pro customers are yielding increased engagement which translates to incremental spend."