The COVID-19 crisis might be winding down but Craig Menear, Home Depot chairman and CEO, recently indicated that “unprecedented demand” from consumers upgrading their homes was behind strong recent gains by the company.
First quarter results for the home center provided more evidence that consumers aren’t done spending money to make their homes better places to live, work and entertain.
In a first-quarter conference call Ted Decker, Home Depot COO, pointed out that consumers are looking to make improvements all around and through their homes, with everything from outdoor planters to items for the kitchen, bath and, essentially, across the household showing strength. The dynamic is reflected in Home Depot operations.
“People are engaged in projects, and they’re engaged in projects across the whole store,” Decker said. “So with projects comes basket and ticket, and we’re certainly enjoying that.”
Net earnings for the first quarter of fiscal 2021 were $4.15 billion, or $3.86per diluted share, compared with net earnings of $2.25 billion, or $2.08 per diluted share, in the same period of fiscal 2020.
First-quarter sales were $37.5 billion, up 32.7% year over year with comparable sales jumping 31%, and comparable sales in the U.S. gaining 29.9%. Average ticket increased 10.3% and transactions increased 19.3% versus the year-earlier quarter. Although lumber inflation played a role, Decker noted that elevated project demand and customers trading up to new and innovative products were factors in the comp transactions gains.
Menear observed that consumers have spent a lot of time at home over the past year in the pandemic, like it or not, and it’s natural that they consider just what they would like to do to bring households more in line with their evolving lifestyle needs.
“Clearly, over the last year, as customers have spent more time in their homes, they’ve told us that a home is never more important than it is today,” he said. “And many of those customers, like myself, got to see a whole lot of things that needed to be done around the home, and they’ve been going after that.”