People wear protective face masks outside Home Depot in Flatiron District as the city resumes Phase 4 reopening after restrictions were imposed in New York City on Aug. 8, 2020 to slow the spread of the coronavirus.
Noam Galai | Getty Images
Home Depot’s fourth quarter earnings exceeded investor expectations on Tuesday as consumers continued to invest in their homes amid the pandemic and strength of the property market.
Shares fell more than 1% in premarket trading after the company failed to provide an outlook for the year.
Richard McPhail, Home Depot’s chief financial officer, said the retailer was unsure how long the pandemic would last and how it could affect consumer spending. He said if demand continues from the second half of last year, it would translate into slightly positive revenue growth in the same business and an operating margin of at least 14% this year.
The company reported for the quarter ended January 31st, versus Wall Street’s expectations, based on an analyst survey conducted by Refinitiv:
- Earnings per share: $ 2.65 versus $ 2.62 expected
- Revenue: $ 32.26 billion versus $ 30.73 billion expected
Home Depot net income rose to $ 2.86 billion, or $ 2.65 per share, from $ 2.48 billion, or $ 2.28 per share last year. Analysts surveyed by Refinitiv expect earnings per share of $ 2.62.
Net sales rose 25% to $ 32.26 billion from $ 25.78 billion a year ago, beating estimates of $ 30.73 billion.
Sales in the same store in the US increased 25%. According to a StreetAccount survey, total revenue in the same store rose 24.5%, above the 19.2% growth forecast by analysts. The growth is in line with what Home Depot reported in the second and third quarters as it benefited from keeping its doors open as a major retailer.
Home Depot also announced Tuesday that its board has approved a 10% increase in its quarterly dividend to $ 1.65 per share.
This story evolves and is updated.
Read the full press release here.