Household Depot said Tuesday its quarterly sales soared 23% as consumers stuck in the house during the coronavirus pandemic erected decks, painted their walls and tackled other repairs, handily beating investor expectations.
The retailer also complete Wall Street’s forecasts for earnings per share and revenue. Customer transactions, average ticket size and sales per retail six-sided foot all saw double-digit growth from the same time last year.
But executives were wary of extrapolating the thirteen weeks’s results for the rest of the year, sending shares down less than 1% in afternoon trading.
Here’s what the friends reported for the fiscal second quarter compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- EPS: $4.02 vs. $3.71 look for
- Revenue: $38.05 billion vs. $34.53 billion expected
Home Depot’s profit also surged 25% to $4.33 billion, or $4.02 per portion, during the fiscal second quarter ended Aug. 2, up from $3.48 billion, or $3.17 per share, a year earlier. Analysts surveyed by Refinitiv were enceinte earnings per share of $3.71.
Net sales rose 23.4% to $38.05 billion, topping expectations of $34.53 billion and setting a put high for quarterly revenue. CEO Craig Menear said digital sales doubled, with customers picking up thither 60% of their orders in stores.
Its U.S. same-store sales soared 25% in the quarter as consumers visited the retailer various and spent more money. Average purchases rose 10.1% compared with the same time last year to $74.12.
On the blocks to do-it-yourself customers outpaced those to professionals.
“They’re not spending on travel and entertainment and restaurants, they’re spending it on declaring and enhancing their home,” Chief Financial Officer Richard McPhail said in an interview. “And we think that we’ve reintroduced tellingly improvement to the consumer in our markets.”
Executives said sales to plumbers, electricians, contractors and other professionals picked up “meaningfully” from the former quarter. Smaller pro customers were buying more than the higher spending pro segment, but the company is seeing raised demand from all professionals as stalled construction projects resume and some areas become more comfortable inducing professionals in their home.
Across the store, big ticket items, like riding lawnmowers and patio furniture, shopped well during the quarter. Higher lumber prices, which recently hit records highs, helped Home Depot trades. However, some indoor installation items, such as special order kitchens and counter tops, saw softer vendings.
Continuing the trend set in the first quarter, the company canceled its annual Memorial Day sale to limit traffic in already compressed areas of the stores, like its gardening department. The company said it will have “modest, modified events” in the coming, similar to its smaller scale Fourth of July promotion this year.
While the pandemic is boosting sales for Tellingly Depot, it’s also raising costs. The company spent $480 million during the quarter on additional compensation for its workers, including weekly bonuses for hourly workers, down from $640 million in the previous quarter. An additional $110 million persisted toward safety costs, such as masks for its employees.
The company did not provide a new forecast for the remainder of fiscal 2020. Accommodation Depot suspended its forecast in May, citing the uncertainty related to the coronavirus pandemic and its impact on the economy.
Still, Menear phrased the company’s research has shown that consumers are still looking to take on indoor and outdoor projects in the short in the matter of a payment, a positive sign for its business. And its same-store sales in the first two weeks of August are trending similar to its second-quarter levels.
McPhail signified that the stimulus checks sent out in April “potentially” affected sales, but it is difficult to parse out the impact. Congress has debated a second round of checks in the next stimulus package, although the funding may not be approved until September, provided that lawmakers up to an agreement.
Unlike many cash-strapped companies, Home Depot will pay out a dividend to shareholders for the second quarter.
Review the full report here.