As millennials step into becoming homeowners, Home Depot sees them ringing up more do-it-yourself projects at its stores.
The retailer on Tuesday reported an impressive increase in same-store sales, fueled by more shoppers spending on items such as tools, lumber, garden accessories and flooring. Hurricanes Harvey and Irma, along with some U.S. wildfires, also boosted sales of recovery materials.
Home Depot cited growth among its professional customers, but it's also calling out bright spots with younger shoppers who prefer DIY. To be sure, winning millennials over the competition will be key to Home Depot's future, since those shoppers represent a larger proportion of the U.S. population.
And when millennials become homeowners, they're spending more for renovations than baby boomers, according to an annual survey from Houzz & Home. The study found that the 25-to-34-year-old age group spent an average $26,200 in 2016 on home upgrades, up 7 percent year-over-year.
"We've seen a sequential improvement in the small ticket quarter-over-quarter ... tickets below $50, which have a tendency to lean more towards the DIY," Edward Decker, Home Depot's executive vice president of merchandising, said on a call with analysts and investors.
During the fiscal third quarter, Home Depot's average shopper spent $62.84, up from $59.78 a year ago. Transactions under $50, which make up 16 percent of Home Depot's total sales, were up 2 percent. Transactions over $900, which account for 22 percent of sales, climbed 12 percent.
"The types of projects that [millennials are] going to engage in are very similar to any new homeowner, and in research we see that the millennial is showing an interest to be DIYers," said Bill Lennie, executive vice president of Home Depot's outside sales and service division.
Despite some analysts' fears, the housing market's multiyear recovery doesn't look to be slowing down anytime soon, especially with millennials on board.