If there were any doubts that Home Depot sales would benefit from the home-focused environment ushered in by the global pandemic, they were erased by the company’s second-quarter performance.
The home improvement giant reported better-than-expected quarterly profit and strong sales growth as consumers continue to invest in home remodeling and repairs. Customer transactions, average ticket size, and sales per retail square foot all saw double-digit growth over the year-ago period.
Home Depot’s net earnings for the quarter rose to $4.3 billion, or $4.02 per share, for the quarter ended Aug.2, from $3.5 billion, or $3.17 per share, in the year-ago period. Analysts were expecting earnings per share of $3.71.
The increase came as the retailer spent some $480 million on additional compensation for its employees, down from $640 million in the previous quarter. An additional $110 million went toward safety costs, such as masks for its employees. Year-to-date, the company has spent approximately $1.3 billion on enhanced pay and benefits in response to COVID-19.
Net sales increased 23.4% to $38.1 billion, easily besting expectations of $34.53 billion. U.S. same -store sales increased 25%. It was the first time Home Depot has posted double-digit comps in seven years. Average purchases rose 10.1% to $74.12, compared with the same time last year.
Digital sales doubled, with customers picking up about 60% of their orders in stores.
The company attributed its strong performance to its “One Home Depot” investment strategy – an integration of supply chain, delivery, e-commerce and stores.
“The investments we have made across the business have significantly increased our agility, allowing us to respond quickly to changes while continuing to promote a safe operating environment,” said Craig Menear, CEO. “This enhanced our team's ability to work cross-functionally to better serve our customers and deliver record-breaking sales in the quarter
Year-to-date, the Home Depot has spent approximately $1.3 billion on enhanced pay and benefits in response to COVID-19. Additionally, the company's first half performance resulted in a record payout for Success Sharing, a profit-sharing program for hourly employees.
Home Depot ended the quarter with 2,293 retail stores, a figure that was unchanged from the end of the first quarter.