Home Depot Tumbles as Earnings Top Projections

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Nov 17, 2020 (Baystreet.ca via COMTEX) —
Home Depot (NYSE:HD) on Tuesday reported third-quarter earnings that beat estimates as consumers continued to focus on home improvement during the coronavirus pandemic and sales surged 24% from a year ago.

The home improvement retail giant said some of its temporary employee compensation programs that it implemented during the pandemic will become permanent wage increases, which will result in $1 billion of additional compensation expenses per year.

Home Depot previously said it had spent $1.3 billion through Aug. 2 on additional compensation costs due to Covid-19 in 2020. On Tuesday, it did not provide updated year-to-date additional compensation costs.

During the fiscal third quarter ended Nov. 1, Home Depot’s net income surged 24% to $3.43 billion, or $3.18 per share, up from $2.77 billion, or $2.53 per share, a year earlier. Analysts were expecting earnings per share of $3.06.

Net sales rose 23% to $33.54 billion, from $27.22 billion reported a year ago. The retailer topped analyst expectations of $32.04 billion.

Its U.S. same-store sales soared 24.6% in the quarter. The value of a customer’s average purchase rose to $72.98, up 10% compared with the same time last year. Sales per square foot rose more than 23% to $552.85.

“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,” CEO Craig Menear said in a statement.

HD shares flopped $7.06, or 2.5%, to $272.51.

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The MarketWatch News Department was not involved in the creation of this content.

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