Home Depot quarterly sales soar 23% as consumers take on more DIY projects in pandemic

Earnings

People wear protective face masks outside Home Depot in the Flatiron district as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on August 8, 2020 in New York City.

Noam Galai | Getty Images

Home Depot is expected to report its fiscal second-quarter earnings before the bell Tuesday as investors watch to see how much of a bump in sales the home improvement retailer got from the pandemic.  

Here’s what Wall Street is expecting, based on a survey of analysts by Refinitiv:

  • Adjusted EPS: $3.71
  • Revenue: $34.53 billion

Analysts estimate sales grew by 11.8% from the same time last year, thanks to consumers tackling home improvement projects while stuck in the house because of the coronavirus pandemic. Most states deemed it an essential retailer, helping it keep its doors open during the strictest phase of lockdowns. Its e-commerce business is booming, and curbside pickup is now available at most of its stores.

But while the pandemic is lifting sales for the retailer, it’s also raising costs. Last quarter, the company reported that higher wages and expanded sick pay for employees cost it about $640 million. 

Investors will also be watching to see how Home Depot’s professional business fared. Bank of America analyst Elizabeth Suzuki wrote in a research note Monday that its reliance on professional customers puts it at a disadvantage relative to rival Lowe’s. About 45% of Home Depot’s sales come from electricians, contractors and plumbers. While many construction projects stalled during the early days of the pandemic, some projects have resumed as economies reopened. 

Home Depot suspended its fiscal 2020 outlook in May, citing the uncertainty related to the duration of the outbreak and its impact on the broader economy.

Shares of the company, which has a market value of $310 billion, have risen 32% so far this year.

This story is developing. Please check back for updates.

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