- Home Depot tops Wall Street estimates in the fiscal third quarter.
- The home improvement retailer reports £2.59 billion of net income.
- Home Depot refrains from giving guidance for fiscal 2021.
Home Depot (NYSE: HD) reported its financial results for the fiscal third quarter on Tuesday that topped analysts’ estimates on the back of a 23% increase in net sales. The company said that demand for home improvement remained robust in recent months as COVID-19 kept people restricted to their homes.
Home Depot said that temporary employee compensation programs that were introduced due to the ongoing COVID-19 crisis have cost it £1.28 billion so far in 2020. The compensation, as per CEO Craig Menear, will now turn into a permanent increase in salaries resulting in additional expenses that he valued at £750 million for this year.
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Home Depot struck a deal earlier this week to acquire its former subsidiary, HD Supply, for £6.87 billion.
Home Depot’s Q3 financial results versus analysts’ estimates
According to Refinitiv, experts had forecast the company to print £24.19 billion in revenue in the third quarter. Their estimate for earnings per share was capped at £2.31. In its report on Tuesday, Home Depot topped both estimates posting a higher £25.32 billion of revenue and £2.40 of earnings per share in Q3.
At £2.59 billion, the largest home improvement retailer in the United States said that its net income in the third quarter was stronger than £2.09 billion in the same quarter last year. On a year over year basis, Home Depot’s digital sales jumped 80% in Q3.
Home Depot’s comparable-store sales in the United States came in 24.6% higher in the third quarter. With a 10% increase, customer’s purchases were priced at £55.10 on average in Q3. Sales per square foot, Home Depot said, climbed 23% in the recent quarter to £417.37.
Home Depot refrains from giving guidance for fiscal 2021
The Atlanta-based company refrained from giving its guidance for fiscal 2021, citing the COVID-19 uncertainties. In separate news from the United States, the American department store retail chain, Kohl’s also published its earnings report on Tuesday.
The NYSE listed firm opened over 2.5% down on Tuesday and lost another close to 1% in the next hour. Home Depot shares have recovered roughly 80% in the stock market since a year to date low in March – a rewarding performance if you invested your money in its stock earlier this year.
At the time of writing, Home Depot has a market cap of £220 billion and a price to earnings ratio of 24.79.