A customer wears a protective mask while unloading purchases off a cart outside a Home Depot Inc. store in Reston, Virginia, on Thursday, May 21, 2020.
Andew Harrer | Bloomberg | Getty Images
Home Depot on Tuesday reported third-quarter earnings that beat estimates with sales surging about 24% compared with a year ago as pandemic home improvement buying continued.
The company noted that it’s taking its temporary employee compensation programs that it implemented during the pandemic and making it permanent. The company said this will result in $1 billion of additional compensation per year.
“We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment,” CEO Craig Menear said in a statement.
Here’s what the company reported compared with what Wall Street was expecting for the fiscal third quarter, based on a survey of analysts by Refinitiv:
- EPS: $3.18 vs. $3.06 expected
- Revenue: $33.54 billion vs. $32.04 billion expected
Home Depot’s profit also surged 24% to $3.43 billion, or $3.18 per share, during the fiscal third quarter ended Nov. 1, up from $2.77 billion, or $2.53 per share, a year earlier. Analysts surveyed by Refinitiv 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. Average ticket rose 10% compared with the same time last year to $72.98.
With people spending more time at home and some leaving cities during the pandemic for spacious homes in the suburbs, Home Depot and its rival Lowe’s have seen a surge in sales. It began in the spring, when both were deemed essential businesses as other retailers shuttered, and it continued into the summer as people traveled less and tackled more projects at home.
Home Depot announced Monday that it agreed to acquire the remaining shares of HD Supply, a former unit and one of North America’s largest industrial products distributors, in a deal valued at $8 billion. Home Depot spun off HD Supply in 2007 to a group of private equity firms that included Carlyle Group, Bain Capital and Clayton, Dubilier & Rice.
The deal could help Home Depot cement its leading edge in the professional contractors business. Lowe’s has been trying to capture a greater share of that side of the business, but Home Depot remains dominant. Along with do-it-yourself projects, the professionals market has boomed during the pandemic, too.
Lowe’s will report fiscal third-quarter earnings before the market open on Wednesday.
As of Monday’s close, shares of Home Depot are up 28% since Jan. 1. The stock, which has a market value of nearly $301 billion, touched an all-time high on Aug. 27 of $292.95.
—CNBC’s Melissa Repko contributed to this report.
This story is developing. Please check back for updates.