Home Depot Digital Sales Jump 12%: Is Online Edge a Moat?

The Home Depot, Inc.’s HD digital strategy is gaining significant traction, as evidenced by a 12% increase in online comp sales during the second quarter of fiscal 2025. The performance highlights the company’s commitment to its interconnected platforms, which blend online and in-store shopping. While overall comparable sales rose just 1%, the outsized digital growth underscores how investments in technology and fulfillment are reshaping Home Depot’s competitive position.

Management pointed to several initiatives behind the momentum. Machine learning is powering the “ship from best location” system, which identifies the fastest and most efficient delivery routes. The company now offers its broadest-ever coverage of same-day and next-day delivery, which has encouraged more frequent customer purchases both online and in-store.

Faster delivery speeds have driven a double-digit lift in customer spending, a sign that convenience translates into revenue gains. While rivals can match pricing or product assortment, replicating Home Depot’s scale-driven fulfillment network and integrated store model may be difficult.

Home Depot also expanded its “buy it again” feature and upgraded search capabilities using artificial intelligence. These tools make it easier for shoppers to reorder across channels. In parallel, in-store technology upgrades such as the Order Fulfillment Associate app now allow batch picking of multiple orders, boosting accuracy and fulfillment speed.

The question now is whether sustained digital momentum can become a durable moat. With technology embedded across operations and customer behavior more inclined toward omnichannel, Home Depot’s online edge appears increasingly hard to dislodge.

How Lowe’s and Floor & Decor Stack Up Online Against HD

Lowe's Companies, Inc. LOW has been steadily enhancing its digital capabilities, reporting a 7.5% increase in online sales in the second quarter of fiscal 2025. Lowe’s emphasized the role of immersive shopping experiences and the My Lowe’s Rewards program in driving repeat purchases, alongside Pro-focused digital tools that strengthen engagement. The company’s acquisition of Foundation Building Materials also broadens its ability to serve large Pro customers with integrated digital order and fulfillment options. With these moves, Lowe’s is building a more comprehensive online ecosystem.

Floor & Decor Holdings, Inc. FND reported that connected customer sales climbed 2% in the second quarter, accounting for 19% of total revenues. Floor & Decor Holdings cited higher active user engagement and improved conversion rates across its online channels. Floor & Decor Holdings plans further investments in digital platforms to integrate design services and pro engagement tools more tightly with its core retail operations.

What the Latest Metrics Say About Home Depot

Home Depot shares have risen 10.7% in the past year compared with the industry’s growth of 7.2%. 
 

From a valuation standpoint, Home Depot trades at a forward price-to-sales ratio of 2.49, higher than the industry’s 1.77. HD carries a Value Score of D. 
 

The Zacks Consensus Estimate for Home Depot’s current financial-year sales implies year-over-year growth of 2.9%, while the same for earnings per share suggests a decline of 1.4%.
 

Home Depot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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