Weak Home Improvement Outlook in Q1 2024 per initial earnings call transcripts

May 15, 2024
Jeffrey Cohen, President
US Advanced Computing Infrastructure, Inc.
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We reviewed Q1 2024 earnings call transcripts for retailers and manufacturers in the home improvement, tools, and automotive tooling space. 

Companies reviewed:
Amazon.com, Emerson Electric, Home Depot, Fastenal, Snap-On, Hillman Solutions, and Stanley Black & Decker. 


AMAZON.COM (Retailer)
"We remain focused on making sure we're offering everyday low prices, which we know is even more important to our customers in this uncertain economic environment. As our results show, customers are shopping, but remain cautious, trading down on price when they can and seeking out deals."


Emerson Electric Company *(big, industrial tooling manufacturer)
"We continue to have confidence in the underlying market conditions. China weakness in the factory overshadowed by strength in India, Europe, Middle East and the rest of Asia."


Home Depot (Home improvement retailer)
"The quarter was impacted by a delayed start to Spring and continued softness in certain larger, discretionary projects. Big ticket count transactions or those over $1,000 were down 6.5% compared to the first quarter of last year. We continue to see softer engagement in larger discretionary – projects where customers typically use financing to fund the projects such as kitchen and bath remodels.

Pro and DIY customers’ performance was relatively in line with one another, but both were negative for the quarter. While Pro backlogs remain relatively stable, we hear from our Pros that homeowners continue to take on smaller projects."


Fastenal Company
"Sluggish demand. March was the first 50+ PMI reading after 16 consecutive months of sub-50 Purchasing Managers Index (PMI) readings. 

The tone of business activity from regional leadership is best characterized as steady at weak levels. Severe weather in January harmed demand."


Snap-On Tools (Automotive Industry tools manufacturer)
The automotive repair arena remains favorable. Vehicle OEM and dealerships continue investing in tools and equipment. Shops are humming, the bays are running at full capacity. Technicians (Techs) are well positioned, and they continue to invest but it's in quick payback items that will make a difference right away, but don't require a long-term payment stream."

Europe now has more than half a dozen countries in technical recession. China continues to struggle. India [is] booming.

Tools Group pivoting to smaller items, smaller purchases, with immediate payback. Sales [saw an] organic decrease of 7%."


Hillman Solutions Corporation (Home improvement items manufacturer)

"40 basis point headwind from price. The macroeconomic landscape in the home improvement sector continues to show muted signs of improving.

The Pick Up Truck Pro continues to be busy albeit, with smaller projects. DIY is starting to get more active, as the weather improved throughout the quarter. The overall market and foot traffic at our retailers were both negative compared to last year. Our retailers are cautiously optimistic for the second half of this year.

​We'll continue to manage our cost structure and business for this environment."


Stanley Black & Decker
"A significantly worse negative macro environment and corresponding revenue performance in 2023 and '24 versus our initial expectations at the outset of our transformation in mid-2022."

Cyclically depressed outdoor business. Professional (DeWalt) showed strength, but muted consumer and DIY demand, which pressured volume. Pricing was relatively flat, consistent with our expectations. Organic revenue for hand tools declined 7% pressured by lower DIY demand.

Tools & Outdoor performance by region. North America was down 2% organically, Europe, organic revenue was down 3% as declines in France and Germany were partially offset by growth in the Nordics and the UK. All other regions were up 7% organically in the quarter, driven by mid-teens growth in Latin America, Brazil, Mexico, Central America and the Caribbean"