The Home Depot Inc. (NYSE: HD) published its earnings report for the fiscal first quarter on Tuesday that beat Wall Street estimates as the COVID-19 crisis continued to fuel demand for home improvement projects.
1. Financial performance
Home Depot said its net income in the quarter that concluded on 2nd May came in at $4.15 billion (£2.92 billion) that translates to $3.86 per share. In the comparable quarter of last year, its net income was capped at a lower $2.25 billion ($2.08 per share).
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The largest U.S. home improvement retailer reported $37.50 billion of sales in Q1 that represents a 32.7% increase on a year over year basis. According to FactSet, experts had forecast the company to post $34.82 billion of sales in the recent quarter and £3.08 of per-share earnings. In the prior quarter (Q4), Home Depot had recorded $32.26 billion of revenue.
2. Comparable sales and customer transactions
According to Home Depot, its comparable sales climbed by 31.0% in the first quarter versus a 21.1% increase expected. In the United States, same-store sales jumped 29.9%, compared to the FactSet consensus of a 23.5% growth.
The retailer noted 447.2 million customer transaction in the first quarter – a 19.3% increase from Q1 of the previous year. Home Depot said consumer spent more in the recent quarter resulting in a 10.3% increase in average ticket to $82.37.
3. Guidance for the full financial year
Home Depot refrained from giving its guidance for the full financial year on Tuesday due to the ongoing COVID-19 uncertainty. CEO Craig Menear, however, said:
“Fiscal 2021 is off to a strong start as we continue to build on the momentum from our strategic investments and effectively manage the unprecedented demand for home improvement projects.”
In separate news, Tencent Music Entertainment also reported its quarterly financial results on Tuesday.
Impact on the share price
Home Depot shares opened at $319 per share in the stock market on Tuesday and are currently exchanging hands at $317.60 per share after hitting an intraday high of $324.56 per share. In comparison, the Atlanta-based company had started the year 2021 at a much lower $264 per share.
Home Depot performed fairly upbeat in the stock market last year with an annual gain of more than 20%. At the time of writing, the home improvement company has a market capitalisation of $339.45 billion and a price to earnings ratio of 26.45.