Home Depot’s revenue jumps 23% in the fiscal second quarter
- Home Depot’s revenue jumps 23% in the fiscal second quarter.
- COVID-19 raises costs for the home improvement retailer in Q2.
- Home Depot tops analysts' estimates for earnings and revenue.
Home Depot (NYSE: HD) published its quarterly financial results on Tuesday that highlighted a 23% year over year increase in sales. The company attributed the increase to the Coronavirus pandemic that restricted people from outdoor activities. As a result, home improvement projects were very much in trend in recent months. Amidst the virus outbreak, Home Depot is currently in fierce competition with its peer, Lowe’s.
Shares of the company jumped 2.7% in premarket trading on Tuesday. Including the gain, Home Depot is now exchanging hands at £223 per share. In March, the stock had dropped to as low as £116 per share that translated to an over 30% decline versus the price at which it started the year 2020. Choosing a reliable stockbroker to trade online can be tough. Here’s a simple comparison to make it easier for you.
Home Depot’s Q2 financial results versus analysts’ estimates
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
According to Refinitiv, experts had forecast the company to print £26.20 billion in revenue in the fiscal second quarter. In terms of earnings per share (EPS), they had estimated £2.82. In its report on Tuesday, Home Depot topped both estimates posting a higher £28.87 billion of revenue and £3.05 of earnings per share in Q2.
At £3.29 billion, the largest U.S. home improvement retailer’s net profit in the second quarter came in 25% higher than £2.64 billion in the same quarter last year. Revenue in Q2 marked the highest for Home Depot in history. In the first quarter, its sales had jumped 7% as reported in May.
In the recent quarter, the Atlanta-based company saw a 25% growth in its U.S. comparable-store sales. Average ticket, it added, climbed to £56.24 that represents a 10.1% increase on an annualised basis.
COVID-19 raises costs for Home Depot in Q2
On the downside, however, Home Depot also accentuated COVID-19 to have fuelled an increase in costs. Additional compensations in Q2 for its employees, as per Home Depot, were valued at £354.24 million, including weekly bonuses that it offers to its hourly workers.
The home improvement retailer still acknowledged the COVID-19 uncertainty and refrained from giving its full-year guidance for fiscal 2020. It had suspended its guidance earlier this year in May. Home Depot, however, did not suspend its dividend payments for Q2 due to the ongoing health crisis.
At the time of writing, Home Depot is valued at £235.24 billion and has a price to earnings ratio of 28.65.