An increase in home projects has brought more customers to Home Depot.
With many Americans still isolating themselves at home due to the ongoing COVID-19 pandemic, a country-wide interest in DIY has taken form. From small repairs to larger home projects, those stuck at home with a surplus of time have been more interested in repairs, decoration, and alteration. This is why America’s most well-known hardware retailer, Home Depot, has managed to not only stay afloat in a time of retail hardship, but in fact, flourish.
Home Depot reported today that their quarterly sales are up by 23%, beating out expectations from both investors and Wall Street analysts. Compared to the same time last year, Home Depot’s stats, including transactions, ticket size, and sales per retail square foot have all seen rises in the double digits. The chain’s profits rose to $4.33 billion, approximately $4.02 per share, which makes for a 25% boost in profit for the second quarter.
However, while the pandemic has yielded some net positives for Home Depot, it has also increased their general operating costs. The chain was required to pay $480 million during Q2 in order to provide extra compensation for its retail work force. This sum includes both increased general paychecks and additional weekly bonuses for hourly staff. While $480 million is no drop in the bucket, it is actually an improvement from the previous quarter, where employee compensation cost the chain $640 million. This is likely due to the uncertainty of the effects and reach of the pandemic back when it was still ramping up in the United States.
Speaking of uncertainty, Home Depot has made the decision to suspend financial forecasts for the remainder of the fiscal year, as there are too many unknown variables to the ultimate reach and lasting effects of the pandemic. However, Home Depot has managed to break the mold in one final way by offering dividend payouts to shareholders for Q2, something many companies currently lack the funds and stability to do.