E-Commerce Gains at Home Depot: Incremental or Game-Changing?

The Home Depot, Inc.’s HD digital strategy remains a cornerstone of its overall growth. Its e-commerce gains are significant and transformative, which go beyond incremental growth and play a vital role in the company's success. This strategy is further amplified by the buildout of its One Supply Chain (OSC) network, focused on strengthening distribution centers, market delivery operations and same-day delivery capabilities. 

Home Depot has been strengthening its in-store and digital experiences, fulfillment and delivery improvements, interconnected retail strategy expansion and Pro ecosystem enhancements to ignite growth. Its continued emphasis on delivering an interconnected retail experience through seamless integration of physical stores and digital platforms remains central to its omnichannel strategy.

With roughly 90% of the company’s online orders fulfilled via its stores using BOPIS/BORIS, e-commerce functions as a convenience amplifier and highly complements HD’s core store-based approach. Home Depot’s digital investments range from mobile upgrades to real-time inventory visibility and delivery enhancements. These investments aim at optimizing the customer journey, particularly for Pro customers and huge DIY projects. HD’s online comparable sales grew 8% year over year in first-quarter fiscal 2025.

Home Depot is further boosting its delivery speed, with faster delivery times directly linked to increased engagement and higher spending across multiple categories. The ongoing investments in its direct fulfillment center network and inventory optimization are driving improvements in order accuracy and responsiveness. Such digital upgrades are expected to enrich customer experience and foster deep loyalty across the DIY and Pro customers. Such moves offer HD a competitive edge and position it for long-term success.

HD’s Competition in E-Commerce Space

Lowe's Companies, Inc. LOW and Amazon.com, Inc. AMZN are the key companies competing with Home Depot on the e-commerce front.

Lowe's has been steadily advancing its e-commerce strategy, focused on building efficiency, optimizing inventory flow and offering a superior, reliable customer experience. The company aims to build a robust omnichannel strategy that ensures product availability in the right quantities, at the right time, and in the right locations. This strategy includes enhancing network capacity, improving flow management and driving overall operational efficiency through end-to-end optimization. As a core part of its Total Home strategy, Lowe’s continues to make investments in modernizing its network to boost its omnichannel capabilities. Lowe’s saw mid-single-digit growth in online comparable sales in first-quarter fiscal 2025. 

A leading e-commerce titan, Amazon is continuously making e-commerce efforts, aimed at driving speed, efficiency and scalability to ramp up its omnichannel capabilities. The company’s efforts include regionalization of the fulfillment network, robotics, automation, innovations and technology integration. Amazon heavily focuses on strengthening its same-day and next-day delivery capabilities, thus elevating the overall shoppers’ experience. Continued investment in its digital arm, supported with innovation, is pivotal to Amazon’s success, with quick delivery options and adaptability to meet customers’ evolving needs.

HD’s Price Performance, Valuation and Estimates

Shares of Home Depot have lost 4.7% year to date compared with the industry’s decline of 7.6%.

From a valuation standpoint, HD trades at a forward price-to-earnings ratio of 23.52X compared with the industry’s average of 20.78X.

The Zacks Consensus Estimate for HD’s fiscal 2025 earnings implies a year-over-year decline of 1.3% while that of fiscal 2026 shows growth of 9.1%. The company’s EPS estimate for fiscal 2025 and fiscal 2026 has been stable in the past 30 days.

Home Depot stock 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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