Home Depot’s first-quarter sales surge 7% despite Coronavirus restrictions

Home Depot (NYSE: HD) released its quarterly earnings report on Tuesday that posted higher costs attributed to the Coronavirus pandemic. Sales, on the other hand, saw a sharp increase in the first quarter.

Shares of the company were reported about 2% down in premarket trading on Tuesday. At £201 per share, Home Depot is currently 12% up year to date in the stock market.

Home Depot’s Q1 financial results versus analysts’ estimates

According to Refinitiv, analysts had forecast the company to print £22.52 billion in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at £1.86. In its report on Tuesday, Home Depot topped analysts’ estimate for revenue posting a higher £23.11 billion in Q1 but fell short on the earnings front recording a lower £1.70 of per share.

In the same quarter last year, the largest U.S home improvement retailer had generated £21.57 billion in revenue and earned £1.86 per share. At £1.84 billion, its net income in Q1 came in lower than £2.05 billion in the comparable quarter of last year.

Experts had also anticipated a 4.4% growth in Home Depot’s same-store sales in the first quarter versus a higher 6.4% growth that it recorded in its earnings report on Tuesday.

Home Depot also revealed robust sales in the first 2 weeks of Q2 on Tuesday. Citing the rising Coronavirus uncertainty, however, the retailer still withdrew its full-year financial guidance for 2020.

Home Depot took several steps to increase wages and entice employees to show up for work amidst the health crisis Q1. Such measures included higher incentives, weekly bonuses, doubled overtime, and expanded benefits, which cost the retailer £523 million after tax that translates to 49 pence per share. Last week, Home Depot announced one of its employees in Pasadena to have died due to COVID-19.

Home Depot’s sales per square foot surge 7% in Q1

In terms of sales per square foot, the retailer posted £381.52 that marks a 7% increase versus the year-ago figure of £355.85. Home Depot’s average ticket also climbed 11% from £55.04 in Q1 last year to £61.08 in the recent quarter.

Despite the health emergency, the U.S home improvement retailer announced earlier in 2020 that it plans on hiring 80K new workers. The Atlanta-based company had also expressed plans of a £3.19 billion investment in 2020 aimed at integrating its e-commerce business with the conventional stores.

At the time of writing, Home Depot is valued at £215.50 billion and has a price to earnings ratio of 23.94.