Home Depot's Transaction Decline Continues as Sales Growth Relies on Acquisitions

Home Depot's (HD) customer transactions have been declining for five consecutive quarters. The home improvement giant reported a 4.8% year-over-year growth in sales to $41.8 billion in its fiscal first quarter, but this was largely driven by bigger receipts and acquisitions rather than more transactions.

The company's comparable customer transactions fell 1.3% in the most recent quarter, following declines of 0.5%, 0.4%, 1.6%, and 1.6% in the previous four quarters. The average ticket price, however, has been increasing, with a 2.2% gain over the same period.

Management is not predicting a turnaround in transactions, and instead is focusing on acquisitions to drive growth. Home Depot's transaction and ticket figures exclude its pro-distribution deals, which are boosting sales without affecting the numbers above.

The company's revenue growth is also being driven by higher prices, with customers choosing pricier items or both. The result is comparable sales that have barely moved, up just 0.2%, 0.4%, and 0.6% over the past three quarters.