Efforts to limit customer traffic in stores beginning during the coronavirus (COVID-19) pandemic had “significant impact” on sales at Home Depot in numerous markets, according to chairman, CEO and president Craig Menear. Despite the COVID-19 impact, sales grew 7.1% year over year (YOY) to $28.3 billion in the first quarter of the fiscal 2020 year at the home-improvement retailer.
Comparable sales in the first quarter of 2020 were positive 6.4% and comparable sales in the U.S. were positive 7.5%. Online sales in the first quarter grew around 80% YOY and the retailer expanded fulfillment options on orders made online.
“As the COVID-19 pandemic evolved, we anchored to the core values of our company by focusing on key priorities: working to ensure the safety and well-being of our associates and customers, and providing our customers and communities with essential products,” Menear said in a news release. “The robust and flexible interconnected infrastructure that we have invested in for over a decade allowed us to quickly adapt to changing customer preferences and achieve strong sales performance in the quarter.”
Home Depot took several actions in the quarter to prioritize safety and enhance associate benefits, including closing stores earlier to allow more time for sanitization and inventory restocking, limiting customer traffic in stores, and cancelling traffic-driving events such as “Spring Black Friday.” The retailer also expanded paid time off for all hourly associates, provided additional paid time off for associates 65 and older, provided weekly bonuses for hourly associates in stores and distribution centers and extended dependent care benefits.
Home Depot incurred an approximately $850 pre-tax expense to provide the enhanced benefits for associates and employees. Due in part to the costly COVID-19 related expenses, net earnings for Home Depot in the quarter decreased $0.3 billion to $2.2 billion compared to the first quarter of 2019.
Home Depot said sales trends were strong at the end of the first quarter through the first two weeks of the second quarter. However, as a result of the uncertainty related to the duration of the global health crisis and its economic impact, Home Depot is suspending its 2020 fiscal guidance.
