Home Depot sales momentum continues in Q4; holds back outlook due to pandemic
The Home Depot Inc. reported fourth-quarter profit and sales that easily topped Street expectations — including its third straight quarter of 25% comps — as consumers continued to invest heavily in their homes amid the pandemic.
The home improvement giant’s net income increased to $2.86 billion, or $2.65 a share, for the quarter ended Jan. 31, from $2.48 billion, or $2.28 a share, in the year-ago period. Analysts had expected earnings of $2.63 per share.
Net sales rose 25.1% to $32.26 billion, beating estimates of $30.63 billion. Same-store sales surged 24.5%, also more than expected.
Same-store U.S. sales held steady at 25.0%. It was the third consecutive month of 25% comps.
Digital sales rose about 83% in the quarter compared to the year-ago period, and were up about 86% for the full year, Home Depot chairman and CEO Craig Menear said on the company’s earnings call.
Sales for fiscal 2020 rose 19.9%, to $132.1 billion.
“Our ability to grow the business by over $21 billion in fiscal 2020 is a testament to both the investments we have made in the business as well as our associates' unwavering commitment to our customers," stated Menear. "We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment.”
Citing uncertainty around the duration of the COVID-19 pandemic and its influence on the consumer, Home Depot is not providing guidance for fiscal 2021.
"As we look ahead to fiscal 2021, while we are not able to predict how consumer spending will evolve, if the demand environment during the back half of fiscal 2020 were to persist through fiscal 2021, it would imply flat to slightly positive comparable sales growth and operating margin of at least 14%," said CFO Richard McPhail
Separately, the company raised its quarterly dividend to $1.65 a share from $1.50 a share, with the new dividend payable March 25 to shareholders of record on March 11.