If there was any doubt that Home Depot sales would benefit from the stay-at-home, work-from-home environment ushered in by the global pandemic, they were erased by the retailer’s second quarter metrics.
Domestic comp-store sales increased 25% for the three months ended Aug. 2. And despite spending some $480 million in above-and-beyond benefits for employees, net earnings for the quarter jumped to $4.3 billion, compared to $3.5 billion in the same quarter last year. The gain was well above Wall Street’s estimates.
Net sales increased 23.4% to $38.1 billion in the quarter.
The record-breaking sales and the Wall-Street-beating results signaled to the company that its One Home Depot investment strategy – an integration of supply chain, delivery, ecommerce and stores – is paying dividends.
“The investments we have made across the business have significantly increased our agility, allowing us to respond quickly to changes while continuing to promote a safe operating environment,” said Craig Menear, CEO.
To put the company’s 25% comp-store sales performance in perspective, the last time Home Depot posted double-digit comps was seven years ago – with an (at the time) eyebrow raising increase of 10.7%.
In the first quarter, Home Depot’s competitor Lowe’s cracked the double-digit barrier with 12.3% comp-store sales gains. Lowe’s will report its second quarter performance results on Wednesday.
Year-to-date, the Home Depot has spent approximately $1.3 billion on enhanced pay and benefits in response to COVID-19. Additionally, the company's first half performance resulted in a record payout for Success Sharing, a profit-sharing program for hourly employees.
Home Depot ended the quarter with 2,293 retail stores, a figure that was unchanged from the end of the first quarter.
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Bottom line: Home Depot's second quarter earnings increased 25% to $4.332 billion
For more: The company's second quarter earnings release can be found here.