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Home Depot Pours Cash Into Its Bulk Shipping Service

By Demitri Kalogeropoulos – Aug 4, 2020 at 9:50AM

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Three new distribution centers are set to come online in the southeast.

The stampede toward online delivery is increasingly moving toward bigger, bulkier goods. That's one key takeaway from Tuesday's news that Home Depot (HD -1.24%) is expanding its online fulfillment centers and pushing deeper into delivery of heavy, large parcels.

The home improvement giant said it is adding three new distribution centers in Georgia over the next 18 months as part of its $1.2 billion multi-year investment into its digital infrastructure. The facilities will speed up standard services to most of the southeastern U.S. while adding new capabilities around delivery for bulk goods, both to professional contractors and do-it-yourself shoppers. "Customers expect to shop whenever, where and however they want," executive Stephanie Smith said in a press release, "whether they're buying a hammer or a pallet of pavers."

A man installs a wall treatment.

Image source: Getty Images.

Home Depot credited its online business with helping sales jump in the fiscal first quarter, which ran through early May. Comparable-store sales rose 7%, or about double the pace from 2019.

Its second-quarter report, set for Aug. 18, will cover May, June, and part of July and should show even more of a tilt toward digital fulfillment. That selling channel was already becoming a core growth avenue for Home Depot, but its importance has only risen thanks to the COVID-19 pandemic.

Demitri Kalogeropoulos owns shares of Home Depot. The Motley Fool owns shares of and recommends Home Depot and recommends the following options: long January 2021 $120 calls on Home Depot and short January 2021 $210 calls on Home Depot. The Motley Fool has a disclosure policy.

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