On the pandemic-spurred strength of do-it-yourselfers and construction contractors, Home Depot hammered home record results for the quarter that ended the last week of July, the company said Tuesday.
The home-improvement giant reported sales of $38.1 billion and net earnings of $4.3 billion, both up about 23% from the same quarter a year earlier.
Home Depot has always aimed at both consumers who work on their own homes and the professionals they hire, and both groups are buying more materials, said Richard McPhail, chief financial officer.
“Our customers are telling us that their home has never been more important than it is right now,” he said.
Millions of Americans have lost jobs during the pandemic, but the majority are not white-collar, higher-salaried positions. So not all in-person spending has dropped even as the pandemic demolished profits for businesses like restaurants, bars, hotels and airlines.
Spending on repairs, renovations and tinkering during early August was more than 50% higher than the same period a year ago, according to Facteus, an Oregon-based company that analyzes millions of credit and debit card purchases.
Home Depot, the largest, Georgia-based company, has headquarters in Vinings. The company has annual sales of about $112 billion and more than 400,000 employees. That includes 27,000 in Georgia, where it has more than 90 stores.
Earlier this month, the company announced plans to add 1,000 jobs in three new metro Atlanta distribution centers during the next year. But new jobs will come not only from the supply chain growth.
“We are continuously hiring. As sales go up, we’ll hire more folks,” McPhail said.
Despite the pandemic, sales have grown both online and in the company’s nearly 2,300 stores.
Online sales were double the level of a year ago, but more than 60% of those customers went to a store to pick up what they ordered. Many bought other items while they were in the store.
Overall, Home Depot recorded 12.3% more transactions last quarter than during the same quarter in 2019, McPhail said.
The company does not discuss employee turnover or pandemic-triggered attrition. However, officials said that they are investing heavily in the workforce.
Home Depot said Tuesday it has set aside about $480 million to pay for additional benefits, including weekly bonuses. So far this year, the company has spent about $1.3 billion on extra pay, benefits and paid time off.
As the pandemic took hold, Home Depot stopped issuing guidance about its likely future performance.
Nick Shields, a senior analyst at Third Bridge Group in New York, said investors should watch the next several months carefully to see if the strength of the company’s recent sales gets chilled along with the weather, said. “We are hearing anecdotally that many purchases are outdoor-centric.”
Home Depot’s quarterly revenues, (in billions)
2020
2nd Quarter: $38.1
1st Quarter: $28.3
2019
4th Quarter: $25.8
3rd Quarter: $27.2
2nd Quarter: $30.8
1st Quarter: $26.4
4th Quarter: $26.5
3rd Quarter: $26.3
Source: Home Depot, MacroTrends