Home Depot Supply First-Half Sales Hit $5.4B - Modern Distribution Management

Home Depot Supply First-Half Sales Hit $5.4B

Home Depot Supply reported 325-percent sales growth in the second quarter compared to the same period last year, thanks to its rapidly expanding base of newly acquired wholesale businesses. Sales at HD Supply were $3.38 billion for the quarter or 13 percent of Home Depot’s overall $26 billion in sales for the second quarter of fiscal 2006.


The Home Depot Supply reported $2.1 billion in first quarter 2006 sales, putting its year-to-date sales at about $5.4 billion.


HD Supply’s year-over-year organic growth was 12 percent. HD Supply chief Joe DeAngelo said in HD’s second-quarter earnings call with investors that his division is focused on becoming an “organic growth machine.” “If you don’t have a great organic growth model, you don’t earn the right to acquire,” he said.


The division will continue on the acquisition trail. “We look at ten to fifteen for every one that we get,” he says.


DeAngelo is not concerned about a possible slowdown in the economy. “When you look at Home Depot Supply, we have a very diverse portfolio now, which helps through any cycle,” he explained. He broke out HD Supply’s base: 36 percent infrastructure; 43 percent construction; 16 percent maintenance; 4 percent repair/remodel; and 2 percent international. 


“No matter what is happening in the cycle, our philosophy is that we’re going to be No. 1 in every one of those segments. When certain things go down, other things go up,” DeAngelo said.


During the quarter, HD Supply acquired: Western Fasteners, distributor of construction fasteners, power tools and accessories with eight branches; Texas Contractors Supply, distributor of forming, concrete accessories, tilt-wall and power tools; Rice Planter Carpets, provider of flooring design, sales and installation services with two locations; and Forest Products Supply, supplier of lumber, doors, millwork, and windows with two locations.


Home Depot Supply also recently announced it would push further into electrical markets by agreeing to purchase Edson Electric Supply, an Arizona-based electrical distributor with 11 locations in the state. The acquisition extends HD Supply’s electrical sector to key growth markets in the Southwest.


Edson serves residential and commercial contractors. Its products include wire, lighting, electrical supplies and switchgear. HD Supply’s electrical business currently operates 59 branches in nine states. The company said in a press release it plans to become the “top global full-line supplier of electrical products and services.”


The Home Depot, Atlanta, GA, reported a 16.7 percent increase in overall sales from the second quarter fiscal 2005. Net earnings were $1.86 billion, up 9.8 percent compared to the same period in fiscal 2005.


Year-to-date, The Home Depot reported sales of $47.48 billion, up 15 percent from the year before. Profit for the first six months was $3.34 billion, up 11 percent.


Total sales in the Retail segment grew 5.1 percent to $22.6 billion, reflecting new stores and comparable store sales of -0.2 percent.


The company saw growth in average ticket across most merchandise categories. In the second quarter of fiscal 2006, The Home Depot increased its average ticket by 4.2 percent to $59.98.


During the quarter, Home Depot opened 30 new stores, including two relocations, with two new stores in Canada and one new store in Mexico, bringing the total store count to 2,079. As of the end of the quarter, approximately 10 percent of the company’s store base was in Canada and Mexico, as compared to 9 percent for the same period last year.

Related Links
class=headlineblue>Home Depot Supply to Acquire Edson Electric Supply
White Cap, an HD Supply Company, Acquires Texas Contractors Supply
White Cap to Buy Western Fasteners
Home Depot Acquisition History

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