Home Depot (HD) 2020 Q4 Earnings Results

Home Depot Inc (NYSE:HD) history dates back to 1978 when Bernard Marcus and Arthur Blank created the company with a goal to establish a hardware store chain with a complete range of merchandise and highly trained staff. The company initially started its operations by opening two stores in Atlanta in 1979. Since then, it has grown to nearly 2300 stores across three countries, becoming one of the world’s biggest home improvement retailers.

The Atlanta, Georgia-based company enjoyed tremendous growth in 2020, as an increasing number of people spent money on home improvement projects while they were stuck at their homes during the Covid-19 pandemic. The lock-down restrictions left people with fewer options to spend their money, and many of them chose to spend on improving their homes. Being a dominant player in the home-improvement space, Home Depot benefitted from the trend, with annual sales hitting $132.1 billion.

Home Depot announced better-than-expected results for the fourth quarter of 2020. It reported earnings of $2.65 per share for the three months ended January 31, versus earnings of $2.28 per share in the same period last year. Analysts on average were looking for a profit of $2.63 per share.

Revenue surged 25.1 percent on a year-over-year basis to $32.26 billion, ahead of analysts’ average estimate of $30.63 billion. Comparable sales jumped 24.5 percent in the fourth quarter, while U.S. comparable sales rose 25 percent.

Looking forward, Home Depot warned that its comparable sales for 2021 might stay flat this year, sending its shares down more than 4 percent in the mid-day trading Tuesday.

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CFO Richard McPhail said in a statement, “As we look ahead to fiscal 2021, while we are not able to predict how consumer spending will evolve, if the demand environment during the back half of fiscal 2020 were to persist through fiscal 2021, it would imply flat to slightly positive comparable sales growth and operating margin of at least 14 percent.”