Residence Depot’s income is thrashing as patrons give attention to house possession and the retailer sustained pandemic wage will increase
A customer wears a protective mask as he unloads purchases from a shopping cart outside a Home Depot Inc. store in Reston, Virginia on Thursday, May 21, 2020.
Andew Harrer | Bloomberg | Getty Images
Home Depot on Tuesday reported third-quarter earnings that beat estimates. Sales increased by around 24% compared to the previous year as the purchase of home improvement pandemics continued.
The company noted that it is picking up and making permanent its temporary employee compensation programs it introduced during the pandemic. The company said this will translate into $ 1 billion in additional compensation per year.
“We continue to rely on these investments as we believe they are critical to growing market share in any economic environment,” said CEO Craig Menear in a statement.
The company reported, versus Wall Street’s expectations for the third quarter of fiscal based on an analyst survey by Refinitiv:
- EPS: $ 3.18 versus $ 3.06 expected
- Revenue: $ 33.54 billion versus $ 32.04 billion expected
Home Depot earnings rose 24% to $ 3.43 billion, or $ 3.18 per share, from $ 2.77 billion or $ 2.53 each for the third quarter of fiscal year ended Nov. 1 Share in the previous year. Analysts polled by Refinitiv expected earnings per share of $ 3.06.
Net sales increased 23% to $ 33.54 billion from $ 27.22 billion a year earlier. The retailer beat analysts’ expectations of $ 32.04 billion.
Revenue from the same store in the US increased 24.6% for the quarter. The average ticket increased 10% to $ 72.98 from the same period last year.
As people spend more time at home during the pandemic and leave some cities to build spacious homes in the suburbs, Home Depot and its rival Lowe’s have seen sales grow. It started in the spring when both were viewed as important stores as other retailers had closed, and it continued into the summer when people traveled less and tackled more projects at home.
Home Depot announced on Monday that it has agreed to acquire the remaining stake in HD Supply, a former entity and one of the largest industrial product distributors in North America, worth $ 8 billion. Home Depot spun HD Supply to a group of private equity firms in 2007 including Carlyle Group, Bain Capital and Clayton, Dubilier & Rice.
The deal could help Home Depot consolidate its lead in the professional contractor business. Lowe’s has tried to grab a bigger share of that side of the business, but Home Depot remains dominant. In addition to do-it-yourself projects, the specialist market also boomed during the pandemic.
Lowe’s will publish its third quarter results before the market opens on Wednesday.
At the close of trading on Monday, Home Depot shares were up 28% since Jan 1st. With a market value of nearly $ 301 billion, the stock hit an all-time high of $ 292.95 on August 27.
– CNBC’s Melissa Repko contributed to this report.
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