Strong Sales at Home Depot & Lowe’s Show Continuing Effects of COVID-19 Pandemic

This week Home Depot and Lowe’s released their latest quarterly earnings reports, with both companies reporting strong growth in sales for the third quarter of 2020. A number of factors contributed to these banner reports, key among them:

• continuing high lumber prices, which bolstered profit margins
• sustained consumer interest in DIY projects
• increasing sales to professional customers as summer weather and continuing strong demand for new housing drove construction activity across the US
• rising online sales – consumers are increasingly purchasing items online to minimize risk of COVID-19 exposure
• strong growth in sales of holiday items – Halloween and Christmas – as consumers looked to add festivity and normalcy to their lives

Looking to the fourth quarter, it is expected that both companies will report continuing strong growth in sales. While winter weather will bring a slowdown to both DIY and professional construction projects, Home Depot and Lowe’s – as well as many other building retailers – can expect strong sales in other areas, such as:

• lumber and other building materials, where prices will remain high
• holiday-related purchases of big-ticket items, such as appliances
• rising sales of winter items, such as snowblowers, rock salt, and space heaters
• continuing solid sales of seasonal items, such as holiday decorations and lights

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.