By Matt Grossman
Home Depot Inc. reported strong sales growth in its latest quarter as the retailer continues to thrive from people spending more time on home-improvement projects during the coronavirus pandemic.
The company also said it would permanently raise compensation for front-line workers in a program that will cost approximately $1 billion a year.
In the third fiscal quarter, the company's revenue rose to $33.54 billion, up 23% from a year earlier, a similar pace to the second quarter. Analysts surveyed by FactSet were expecting revenue of $31.83 billion. Same-store sales grew by 24.1% year-over-year overall, and by 24.6% in the U.S.
As Americans have spent more time at home during the public-health crisis, many turned their attention to domestic projects, shifting money they would have otherwise spent on vacations, gym memberships and other activities that have been postponed to prevent the virus's spread.
During the Covid-19 pandemic, Home Depot has offered some temporary benefits to workers, including more paid time off and a temporary weekly bonus program. The company on Tuesday said it plans to make some of those enhancements permanent for its hourly associates.
"We continue to lean into these investments because we believe they are critical in enabling market-share growth in any economic environment," Chief Executive Craig Menear said.
Home Depot shares declined about 1.6% in premarket trading. The stock closed Monday at $279.57, up more than 28% since the start of the calendar year.
The company's performance in the quarter, which ended Nov. 1, bookends a robust summer season for the Atlanta-based retailer. In the first nine months of the fiscal year, revenue grew by more than 18% overall.
The number of customer transactions for Home Depot in the third quarter rose by 13% year over year to more than 453 million, with an average ticket size of $72.98. Sales per retail square foot increased by more than $100 to $552.85.
Home Depot's quarterly net profit was $3.43 billion, or $3.18 a share, compared with a profit of $2.77 billion, or $2.53 a share, in last year's third quarter. Analysts had forecast a profit of $3.13 a share.
On Monday, Home Depot agreed to buy HD Supply Holdings Inc., a wholesale distributor of building supplies, for roughly $8.7 billion. HD Supply was a unit of Home Depot until 2007, when Home Depot sold HD Supply to a group that included Bain Capital, Carlyle Group and Clayton Dubilier Rice.
Write to Matt Grossman at email@example.com
(END) Dow Jones Newswires