NORTH TEXAS (CBSDFW.COM/CNN) – For many, the number of home projects has increased during the COVID-19 pandemic and that has housing and DIY markets booming. The result is great news for Home Depot and its workers.
Home Depot reported better-than-expected sales and earnings Tuesday, and the company is planning to invest $1 billion annually on increased worker benefits.
Home Depot unveiled temporary programs during the coronavirus pandemic such as expanded paid time off and weekly bonuses. But the company has decided to make these and other new benefits permanent as the housing market continues to thrive.
Sales at stores that have been open for at least one year surged 24% in the third quarter. And Home Depot reported a net profit of $3.4 billion, an increase of more than 20% from a year ago.
“[T]he investments we have made in the business as well as our associates’ focus on customers…are critical in enabling market share growth in any economic environment,” CEO Craig Menear said in the company’s earnings release.
Shares of Home Depot fell slightly in early trading Tuesday following the news, but the stock is up nearly 30% this year.
Home Depot is thriving during the pandemic as many consumers focus on home improvements at a time when they may be less willing (or able) to spend on leisure activities such as dining out or taking a family trip.
“Spending on the home continues to be a priority,” Neil Saunders, managing director of retail research firm GlobalData, said in a report.
“Savings from lower outlays on commuting, eating out and not taking vacations have given consumers a pool of cash which they have diverted into home projects and activities,” Saunders said. “Improvement continues to be at the forefront of spending.”
Home Depot’s results come one day after the company announced plans to buy back HD Supply, a former subsidiary that focuses on selling construction materials to homebuilders, apartment managers and the hospitality industry, for more than $8 billion.
Home Depot sold the business to private equity firms in 2007, and there had been recent chatter that Home Depot rival Lowe’s, which will report its latest results Wednesday, was interested in purchasing HD Supply.
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