Home Depot (HD) - Get Report reported first quarter earnings on Tuesday, May 19 with both positive and negative news about how the coronavirus pandemic has impacted the hardware and home goods retailer.
On the one hand, Home Depot’s sales rose sharply, up more than 7% from a year earlier. The big box retailer has been deemed essential in most states, meaning shoppers are showing up for in-store purchases and curb-side pickups. On top of that, many consumers are stuck at home and, if they have the dispensable cash available, working on do-it-yourself home-improvement projects.
However, coronavirus-related costs dragged down Home Depot’s earnings overall. Home Depot boosted wages, expanded paid time off, and doubled overtime and weekly bonuses for workers to encourage them to continue working through the pandemic.
These measures cost the retailer $640 million after taxes
"As the COVID-19 pandemic evolved, we anchored to the core values of our Company by focusing on two key priorities: working to ensure the safety and well-being of our associates and customers, and providing our customers and communities with essential products," said CEO Craig Menear. "We took early and decisive action to intentionally limit customer traffic in our stores which we believe had a significant impact to sales in many markets."
Home Depot suspended its full-year 2020 profit guidance. Its earnings for the three months ending on May 3 were $2.08 per share, well shy of the forecast of $2.27 per share.