Home Depot Plans Workforce Investment as Pandemic Brings Another Strong Quarter--Update
November 17 2020 - 7:50AM
Dow Jones News
By Matt Grossman
Home Depot Inc. reported strong sales growth in its latest
quarter as the retailer continues to thrive from people spending
more time on home-improvement projects during the coronavirus
pandemic.
The company also said it would permanently raise compensation
for front-line workers in a program that will cost approximately $1
billion a year.
In the third fiscal quarter, the company's revenue rose to
$33.54 billion, up 23% from a year earlier, a similar pace to the
second quarter. Analysts surveyed by FactSet were expecting revenue
of $31.83 billion. Same-store sales grew by 24.1% year-over-year
overall, and by 24.6% in the U.S.
As Americans have spent more time at home during the
public-health crisis, many turned their attention to domestic
projects, shifting money they would have otherwise spent on
vacations, gym memberships and other activities that have been
postponed to prevent the virus's spread.
During the Covid-19 pandemic, Home Depot has offered some
temporary benefits to workers, including more paid time off and a
temporary weekly bonus program. The company on Tuesday said it
plans to make some of those enhancements permanent for its hourly
associates.
"We continue to lean into these investments because we believe
they are critical in enabling market-share growth in any economic
environment," Chief Executive Craig Menear said.
Home Depot shares declined about 1.6% in premarket trading. The
stock closed Monday at $279.57, up more than 28% since the start of
the calendar year.
The company's performance in the quarter, which ended Nov. 1,
bookends a robust summer season for the Atlanta-based retailer. In
the first nine months of the fiscal year, revenue grew by more than
18% overall.
The number of customer transactions for Home Depot in the third
quarter rose by 13% year over year to more than 453 million, with
an average ticket size of $72.98. Sales per retail square foot
increased by more than $100 to $552.85.
Home Depot's quarterly net profit was $3.43 billion, or $3.18 a
share, compared with a profit of $2.77 billion, or $2.53 a share,
in last year's third quarter. Analysts had forecast a profit of
$3.13 a share.
On Monday, Home Depot agreed to buy HD Supply Holdings Inc., a
wholesale distributor of building supplies, for roughly $8.7
billion. HD Supply was a unit of Home Depot until 2007, when Home
Depot sold HD Supply to a group that included Bain Capital, Carlyle
Group and Clayton Dubilier Rice.
Write to Matt Grossman at matt.grossman@wsj.com
(END) Dow Jones Newswires
November 17, 2020 08:35 ET (13:35 GMT)
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