The chain crushed analyst’s first-quarter estimates as net sales surged almost 38 per cent amid consumers’ ongoing spending on home improvements and a booming housing market.
The chain did not give an outlook for its current fiscal year. Some analysts have questioned whether the pandemic-fuelled boom in home spending will last as the economy reopens. Also, soaring prices in lumber and other materials are putting a dent in homebuilding, which fell more than expected in April.
On an earnings call with analysts, Home Depot president and COO Ted Decker addressed lumber prices, which have surged 127 per cent this year.
“This was another record-setting quarter for lumber prices,” Decker said on the call. “Let me give you an example of what that means for one of our core lumber SKUs. At the end of the first quarter last year, a sheet of seven sixteenths OSB [or plywood] was approximately $9.55. As we exited the first quarter of this year, that same sheet of OSB more than quadrupled in price to $39.76.”
The retailer reported net income of $4.15bn, or $3.86 per share, for the quarter ended 2 May, up from $2.25bn, or $2.08 per share, in the year-ago period. Analysts had expected earnings per share of $3.08.
Net sales rose 32.7 per cent to $37.5bn, easily topping expectations of $34.96bn. Comparable sales increased 31 per cent; US comparable sales were up 29.9 per cent.
