At the halfway point in its fiscal year, Do it Best announced that company net profit is up 10 percent, reaching $85.3 million with $2.5 billion in sales through December.
“We’ve made substantial progress in our investments to strengthen the engine that drives efficiency and increases sales,” said President and CEO Dan Starr. “After two straight years of phenomenal sales and member growth, we’ve continued our momentum, adding 305 new members and beating our aggressive growth plan by over 4 percent. These great bottom-line results are due to a variety of initiatives the Do it Best team has been leading to ensure we’re always our members’ first and best choice.”
In a letter to Do it Best member-owners, Starr recapped the company’s mid-year performance and highlighted a number of recent achievements in driving the business forward. “As I’ve shared before, expanding member business is a cornerstone of our growth. We approach this in several ways: helping members increase sales within their businesses, helping them open additional locations, and attracting and adding more members to Do it Best,” he shared. “Through calendar year 2022 we onboarded a record number of new stores—305 to be exact. That number represents member acquisitions and new store expansions, as well as competitive conversions and those new to the industry as first-time owners. And that pace isn’t slowing. New member signings are already up 13 percent and we’re continuing to support current member growth through our Gear Up 4 Growth initiatives.”
Starr explained that through rebate advances, preference share redemption and considerable incentives for major store improvement projects, Do it Best is helping members expand their businesses at a breakneck pace. To sustain that level of store growth, the company is continuing to make major investments in the infrastructure necessary to support store owners’ needs.
“We’re on track to have our next-gen warehouse management system operating in all our facilities by this fall, along with our new distributed order management system, and our streamlining of core financials. These generational investments are critical to support member growth today, as well as the new business we’re experiencing now and projecting for the future. Our team’s focus is to install these systems without interrupting our business and our service to members,” Starr said.
Do it Best also announced they are expanding capacity in their warehouse network, starting with their Woodburn, Ore., distribution center. “We’ve already broken ground on what will ultimately increase space there by 50 percent,” said Starr. “We’re committed to building and maintaining facilities, equipment and systems to support our members’ growth. The Woodburn expansion is an example of just one of the over $100 million in investments that are either in progress or planned to ensure we’re meeting owners’ needs now and into the future.”
Last spring, Do it Best announced a major ecommerce initiative designed to put its members in an even stronger position in-store and online with fully integrated point-of-sale and customer convenience at the forefront. “We’re embracing the shifts in consumer behavior by enhancing and expanding members’ ability to fulfill their customers’ needs in-store and online,” Starr noted. “And at this spring market in Orlando from March 11-13, we’ll be introducing the enhancements we’re making to drive more traffic from online into Do it Best stores in record time.”
Starr also stressed the importance of product acquisition and assortments as drivers for growth. “Our number one priority is ensuring our store owners have products to sell. Our team has worked closely with our vendor partners to improve our service level across all departments, including key categories in plumbing, tools, building materials, outdoor living, and lawn and garden,” he said. “Our merchandising and sales teams have been bringing our members even more strategic product opportunities with Member Profit Generators from top vendors to help drive even more sales in all Do it Best markets. Our members have responded, driving Category Solutions sales up 35 percent so far this year. That’s ensuring their assortments are current and relevant for customers.”
The company has also been developing relationships with new vendors and exploring new product lines. As an example, Do it Best recently announced an exclusive partnership with BFG, a respected lawn and garden leader. BFG offers Do it Best members exclusive access to a full catalog of lawn and garden products, from soils and pest management to greenhouse systems, and offers brands that customers will know, like FoxFarm, JR Peters and Michael Carr Designs. “With BFG, we’re now even better aligned to be our members’ only choice for lawn and garden products,” he noted.
Starr also acknowledged the challenge members have faced with recruiting and retaining great employees and how the company has continued to strengthen their exclusive training programs. “Thousands of our members have signed up for Learning Zone, offering courses developed by Do it Best, the NHPA and Sherwin-Williams Academy. Along with our Leadership Development Institute, we’re also committed to building our LBM members’ knowledge to power up their sales in 2023 with the industry’s only LBM Academy,” Starr said.
“With the steady easing of the challenges to source store fixtures and components, our team has been able to surge forward to meet the pent-up demand for new store design. Our industry award-winning Signature design program, partnered with robust Retail Performance incentives, has helped more and more members attract new customers, expand their market share and drive double-digit growth. And our Best Rewards customer loyalty program gets even stronger this year. We’ll have more to share at our spring market,” said Starr.
Responding to member feedback, Do it Best moved its 2023 spring market to Orlando. “Our team has powered up this market to ensure members’ time there is well spent,” he stated. “From outstanding deals, to the Solutions in Action plumbing, electrical and seasonal exhibit, as well as seminars and great networking events, our members won’t want to miss this market.”
He continued, “I like where we are at the midpoint. As you see and hear every day, there are a number of factors in flux that could impact results, and we’re keeping our eyes on them.” Factors he noted include the overall state of increased inventory levels across manufacturing, wholesale and retail, and the potential impact of discounting as all parties work to pare inventories down. He also listed the economy, impacted by consumer confidence and inflation and the expectation that the Federal Reserve will likely implement another rate hike to try to calm inflation.
Finally, he questioned whether consumers are ready to pull back on the spending that has fueled sales growth over the past few years. “While this may happen, we’re working with our members to ensure they’re well-positioned to capture every last penny of what consumers are willing to spend,” he said. “I’m bullish about what the second half holds for our members and Do it Best. Our team continues to sharpen our focus and deliver with excellence to help Do it Best members drive growth in their businesses now and in the coming year,” Starr said.