Home Depot Q3 same-store sales surge; to make permanent wage increases
The Home Depot reported a strong quarter as it continues to benefit from consumers’ increased spending on home improvement projects amid the pandemic.
The retailer also announced that it will make permanent the temporary compensation programs it has implemented for frontline employees during the pandemic. The move will result in $1 billion of additional expenses annually. Home Depot has spent about $1.7 billion on temporary pay and benefits so far in 2020.
Net income rose 24% to $3.43 billion, or $3.18 per share, in the quarter ended Nov.1, up from $2.77 billion, or $2.53 per share, in the year-ago period. Analysts had forecast earnings per share of $3.06.
Sales rose 23.2% to $33.54 billion, topping analyst expectations of $32.04 billion. Digital sales increased 80%, with customers picking up about 60% of their orders in stores.
Home Depot’s U.S. same-store sales surged 24.6% in the quarter. The average purchase rose 10% to $72.98. Sales per square foot rose more than 23% to $552.85.
The company reported its third-quarter results the day after it announced that it had entered into an $8 billion deal to acquire HD Supply, a national distributor of maintenance, repair and operations products in the multifamily and hospitality end markets.
"The third quarter was another exceptional quarter for The Home Depot as we saw the continuation of outsized demand for home improvement projects, which has led to sales growth of more than $15 billion through the first nine months of the year," said Craig Menear, chairman and CEO. "Our ability to effectively adapt to this high-demand environment is a testament to both the investments we have made in the business as well as our associates' focus on customers.
We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment.”
At the end of the third quarter, the company operated 2,295 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.