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Q3 financials

Home Improvement Operations Share Q3 Financials

See how several home improvement and other big-box retailers performed in the third quarter of 2022 with a round-up of Q3 financials.

The Home Depot

The Home Depot® reported sales of $38.9 billion for the third quarter of fiscal 2022, an increase of $2.1 billion, or 5.6% from the third quarter of fiscal 2021. Comparable sales for the third quarter of fiscal 2022 increased 4.3%, and comparable sales in the U.S. increased 4.5%.

Net earnings for the third quarter of fiscal 2022 were $4.3 billion, or $4.24 per diluted share, compared with net earnings of $4.1 billion, or $3.92 per diluted share, in the same period of fiscal 2021, representing an 8.2% increase in diluted earnings per share.

“We delivered another solid performance in the third quarter, driven by strength in project-related categories across the business,” says Ted Decker, chair, president and CEO. “Our team has done a fantastic job serving our customers while continuing to navigate a challenging and dynamic environment. I would like to thank them and our many partners for their hard work and dedication to our customers.”

Lowe’s

Lowe’s reported net earnings of $154 million and diluted earnings per share (EPS) of $0.25 for the quarter that ended Oct. 28, 2022, which included a pre-tax noncash asset impairment charge of $2.1 billion related to its Canadian retail business. Total sales for the third quarter were $23.5 billion compared to $22.9 billion in the third quarter of 2021, and comparable sales increased 2.2%. Comparable sales for the U.S. home improvement business increased 3.0% for the third quarter.

“We delivered better-than-expected results this quarter, with U.S. comps up 3%, driven by pro growth of 19% and improved DIY sales trends. Sales on Lowes.com grew 12% on top of 25% growth last year,” says Marvin R. Ellison, Lowe’s chairman, president and CEO. “We also drove substantial improvement in adjusted operating margin through disciplined execution and cost management. This enabled us to award $200 million in bonuses to our front-line hourly associates, while also announcing $170 million in permanent wage increases. I am pleased that we are once again able to share the success of the company with our hard-working front-line associates, and I look forward to discussing our next chapter of growth at our Analyst & Investor Conference in December.”

Target

Comparable sales for Target increased 2.7%, on top of 12.7% growth last year, driven by 1.4% traffic growth and a 1.3% increase in average ticket. Total revenue of $26.5 billion grew 3.4% compared with last year, reflecting total sales growth of 3.3% and a 9.5% increase in other revenue. Operating income was $1.0 billion in the third quarter of 2022, down 49.2% from $2.0 billion in 2021, driven primarily by a decline in the Company’s gross margin rate.

“In the third quarter, our business delivered comparable sales growth of 2.7%, and we saw unit share gains across all of our core merchandise categories. This performance demonstrates the durability of our business model, which continues to serve our guests and drive loyalty despite the challenging economic environment,” says Brian Cornell, chairman and chief executive officer of Target Corp. “In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guests’ shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty. This resulted in a third-quarter profit performance well below our expectations.”

Tractor Supply Co.

Tractor Supply Co. reported a net sales increase of 8.4% and a comparable store sales increase of 5.7% for the third quarter of 2023. Diluted earnings per share were up 7.7% to $2.10, and the company raised the fiscal 2022 diluted EPS range to $9.55 to $9.63, compared to the prior range of $9.48 to $9.60.

“Tractor Supply delivered another record quarter as we continued to gain market share and extended our trend of consistent and stable net sales and earnings growth. In a dynamic environment, the underlying health of our business remains resilient given our needs-based, demand-driven product categories, best-in-class customer service and customer relationship management capabilities. I want to thank the entire Tractor Supply team for their hard work to deliver our strong third-quarter results, their dedication to advance our strategic plans to deliver sustainable long-term growth and their commitment to living our mission and values,” says Hal Lawton, Tractor Supply’s president and CEO.

“Our Life Out Here strategy is gaining traction and widening our competitive moat, and we are excited about the many growth vectors ahead. We are honored to welcome the Orscheln Farm and Home team to Tractor Supply. With 25% of our store base now in our Project Fusion store format and over 260 Garden Centers operating across the chain, we are on track to achieve major milestones in the history of Tractor Supply with net sales exceeding $14 billion, more than 2,100 Tractor Supply stores and 50,000 dedicated Team Members. We believe we have the right strategies to manage through the near-term and to deliver long-term balanced growth and value creation,” Lawton says.

Walmart

Total revenue for Walmart was $152.8 billion, up 8.7%, or 9.8% in constant currency. Walmart U.S. comp sales grew 8.2% and 17.4% on a two-year stack and e-commerce growth was 16% and 24% on a two-year stack. The consolidated gross profit rate declined 89 basis points, primarily due to markdowns and a mix of sales in the U.S., an inflation-related LIFO charge at Sam’s Club and the timing of Flipkart’s annual event, The Big Billion Days.

“We had a good quarter with strong top-line growth globally led by Walmart and Sam’s Club U.S., along with Flipkart and Walmex. Walmart U.S. continued to gain market share in grocery, helped by unit growth in our food business,” says Doug McMillon president and CEO, Walmart. “We significantly improved our inventory position in Q3, and we’ll continue to make progress as we end the year. From The Big Billion Days in India, through our Deals for Days events in the U.S. and a Thanksgiving meal that will cost the same as last year, we’re here to help make this an affordable and special time for families around the world. We have an amazing group of associates that make all this happen, and I want to say thank you.”

PPG

PPG reported record third-quarter net sales of  $4.5 billion, up about 8% in constant currencies. The company saw organic sales growth of more than 9%, driven by higher selling prices, which are up 18% on a two-year stacked basis. Reported earnings per diluted share from continuing operations (EPS) were $1.39 and adjusted EPS was $1.66. Inflationary cost pressures persist, with raw material cost inflation of nearly 40% on a two-year stack. The company is expecting an improving pace of year-over-year segment operating margin recovery in the fourth quarter and into 2023.

“We achieved record sales in the third quarter driven by continued selling price realization, resulting in more than a 12% increase in selling prices versus the third quarter 2021 and an 18% increase on a two-year stacked basis,” says Michael H. McGarry, PPG chairman and chief executive officer. “Looking ahead, normal seasonal demand trends are anticipated in the fourth quarter. Due to the reduced economic activity, an additional cost restructuring program is now underway focused on fast payback actions targeting $70 million of annualized savings upon full implementation. Finally, we expect that our year-over-year operating margins will improve in the fourth quarter and into 2023 as we work to restore our historical margin profile through our actions to fully offset inflation and manage our costs. Lastly, I want to thank our global employees who demonstrate The PPG Way every day by continuing to overcome unexpected challenges to provide our customers across the world with the products and excellent service they rely on.”

Sherwin-Williams

During the third quarter of 2023, consolidated net sales for Sherwin-Williams increased 17.5% to a record $6.05 billion. Net sales from stores in U.S. and Canada that were open more than twelve calendar months increased 20.7% in the quarter. Diluted net income per share increased to $2.62 per share in the quarter compared to $1.88 per share in the third quarter of 2021. Adjusted diluted net income per share increased 35.4% to $2.83 per share in the quarter compared to $2.09 per share in the third quarter of 2021.

“Our team delivered record net sales results in the third quarter as we continued to focus on serving our customers with innovative solutions,” says chairman and CEO, John G. Morikis. “Sales grew to $6.05 billion, a 17.5% increase against a softer quarter comparison last year when raw material availability was highly challenged. Consolidated gross margin expanded 110 basis points sequentially and 120 basis points year-over-year to 42.8%. Our margins improved as a result of pricing actions across all businesses and volume increases in all architectural paint end markets in The Americas Group. We generated strong cash flow in the quarter, which enabled us to continue making strategic long-term investments across the business and pursue strategic, bolt-on acquisitions in the Performance Coatings Group, having closed three acquisitions since the beginning of the third quarter.”

About Lindsey Thompson

Lindsey joined the NHPA staff in 2021 as an associate editor for Hardware Retailing magazine. A native of Ohio, Lindsey earned a B.S. in journalism and minors in business and sociology from Ohio University. She loves spending time with her husband, two kids, two cats and one dog, as well as doing DIY projects around the house, going to concerts, boating and cheering on the Cleveland Indians.

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