Sales keep rising at Home Depot
Net earnings decline amid costly coronavirus mitigation efforts.
Home Depot’s reaction to the coronavirus included reducing hours and limiting customer traffic in stores, resulting in a “significant impact” on sales, according to CEO Craig Menear. Still the world’s largest home improvement retailer posted first quarter U.S. comps of positive 7.5%, and $28.3 billion in sales, up 7.1% from the same period last year.
Weighed down by $850 million in disease-prevention charges, Home Depot reported net income fell 10.7% to $2.245 billion.
Here’s how the company described its pandemic mitigation efforts:
- Expanded paid time off for all hourly associates with additional hours that can be used at their discretion and will be paid out at year-end if not used;
- Provided additional paid time off for associates who are 65 and older or deemed to be at higher risk according to CDC guidelines;
- Provided weekly bonuses for hourly associates in stores and distribution centers, and doubled overtime pay; and
- Extended dependent care benefits and waived related co-pays.
And while sales trends were strong at the end of the first quarter and into the first two weeks of the second quarter, the company said it would suspend its previously communicated guidance due to the uncertainty caused by the pandemic.
The company ended the quarter with 2,293 stores.
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Bottom line: Net income declined 10.7% to $2.245 billion, as pandemic related costs hit $850 million.
What the CEO said: “We took early and decisive action to intentionally limit customer traffic in our stores which we believe had a significant impact to sales in many markets,” said Craig Menear, chairman, CEO, and president. “Even with these actions, the robust and flexible interconnected infrastructure that we have invested in for over a decade allowed us to quickly adapt to changing customer preferences and achieve strong sales performance in the quarter.”
For more: Read the first quarter earnings release here.
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