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Home Depot Quarter Earnings Hit By Expanded Worker Benefits And Social Distancing Norms At Stores

By John F. Heerdink, Jr.

As per reports, The Home Depot, Inc. (HD) suspended its 2020 earnings guidance while reporting worse than expected earnings recently, due to high expenses incurred for the well-being of its workers. Home Depot spent $850 million on its expanded worker benefits during the quarter including paid time off and higher overtime pay.

The retailer reported earnings of $2.2 billion, or $2.08 a share in the first quarter lower than $2.5 billion profit in the same period last year and below Wall Street expectation of $2.26 a share. The total revenue saw a jump by 7.1% from a year ago to $28.3 billion in line with expectations. Stores operating for at least a year witnessed an increase in sales by 6.4% overall and 7.5% in the United States. The company imposed social distancing guidelines in its stores towards the end of the quarter, which also affected its sales figure.

“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,” stated CEO Craig Menear.

The company expects low demand for home sales, which would be taxing for Home Depot and also for its rival Lowe’s.

The Home Depot, Inc. (HD) is the world’s largest home improvement retailer with retail stores all across North America. The Home Depot sells building materials and home improvement products, as well as lawn and garden supplies, and provides installation, home maintenance, and professional service programs. To learn more about The Home Depot, Inc. (HD) and to continue to track its progress please vista Partners The Home Depot, Inc. Coverage Page.  

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives. 

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(Read Original Story: Home Depot's expanded worker benefits took a huge bite out of its profit in CNN Business)


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