Home Depot Inc. posted stronger-than-expected third-quarter earnings Tuesday while noting it plans to spend around $1 billion on bonuses and compensation increases for its frontline workers.
Home Depot said earnings for the three months ending on November 1 were pegged at $3.18 per share, up 25.7% from the same period last year and 13 cents ahead of the Street consensus forecast. Group revenues, Home Depot said, rose 23% to $33.5 billion, again topping analysts’ estimates of a $32 billion tally.
Same-store sales, Home Depot said, surged 24.1% from last year, with a 24.6% gain for its U.S. operations, a figure that was firmly ahead of the Refinitiv forecast of 14.5%, as customers splashed-out on home improvements amid a record run for U.S. house prices.
“The third quarter was another exceptional quarter for The Home Depot as we saw the continuation of outsized demand for home improvement projects, which has led to sales growth of more than $15 billion through the first nine months of the year,” said CEO Craig Menear. “Our ability to effectively adapt to this high-demand environment is a testament to both the investments we have made in the business as well as our associates’ focus on customers.”
“We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment,” he added. “I am proud of the resilience and strength our associates have continued to demonstrate, and I would like to thank them and our supplier partners.”
Home Depot shares were marked 2.47% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $272.66 each, a move that would trim the stock’s six-month gain to around 11%.
“Throughout the COVID-19 pandemic, The Home Depot has taken significant actions to support associates, including expanded paid time off for all hourly associates to use at their discretion and the implementation of a temporary weekly bonus program,” Home Depot said. “The Company is now transitioning from these temporary programs to invest in permanent compensation enhancements for frontline, hourly associates. This will result in approximately $1 billion of incremental compensation on an annualized basis.”
This article was originally published by TheStreet.