UPDATE: Home Depot’s 1Q revenue, profits get another pandemic boost

A Home Depot store
A Home Depot store

Retailer continues to benefit from home-improvement boom

Home Depot on Tuesday reported sales of $37.5 billion for its fiscal first quarter, up nearly one-third from a year earlier, as the giant retailer blew past analysts’ expectations.

Fueled by a pandemic surge in renovations and homebuilding, the Vinings-based company nearly doubled its net earnings during the quarter, from $2.2 billion in the same period last year to $4.1 billion.

The retailer, which sells to both professionals and do-it-yourselfers, has seen an unprecedented burst of home improvement projects, most recently with the distribution of vaccines and the rebound of the economy, Richard McPhail, the company’s chief financial officer, told The Atlanta Journal-Constitution.

“Professionals are much more able to get onto job sites now and customers are much more willing to let them into their homes,” he said.

The trend, which has accelerated with the steady rise of home prices, bodes well for the future, McPhail said. “When houses become more valuable, the owners become willing to spend more on them, and this is not a short-lived phenomenon.”

First-time homebuyers are a big part of the story, he said. “People said the millennials would never buy homes, but millennials now own 18.5% of all homes. They were introduced to home improvement in 2020.”

A government report Tuesday showed a drop of housing starts in April. Mortgage rates have also ticked up. But even if new home construction cools, it should not radically change the demand for Home Depot products and services, McPhail said.

“Our addressable market is the 130 million households in the United States and only about 5% of them are going to move during the year. So the other 95% are not exposed to changes in interest rates.”

The company late Monday changed its policy for mask-wearing in its stores, lifting that requirement for customers and employees who are fully vaccinated against COVID-19. The eased rules for mask wear do not apply in places where residents are required by state or local ordinances to wear masks, spokeswoman Sara Gorman said.

“Masks are still encouraged for those who aren’t fully vaccinated, and we’ll keep safety measures in place like enhanced cleaning and social distancing,” she said.

Home Depot revenues (in billions of dollars)

For quarter ending:

4/30/2021: $37.5

1/31/2021: $32.3

10/31/2020: $33.5

7/31/2020: $38.1

4/30/2020: $28.3

1/31/2020: $25.8

10/31/2019: $27.2

7/31/2019: $30.8

4/30/2019: $26.4

Sources: The Home Depot, Macrotrends

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