Home Depot casts doubt on further room for improvement after blow-out 2020

Home Depot casts doubt on further room for improvement after blow-out 2020

Home Depot Inc beat quarterly same-store sales estimates on Tuesday, riding a sustained wave of demand for home improvement goods as the COVID-19 pandemic drags on.

FILE PHOTO: The logo of Home Depot is seen in Encinitas
FILE PHOTO: The logo of Home Depot is seen in Encinitas, California April 4, 2016. REUTERS/Mike Blake/File Photo

REUTERS: Home Depot Inc on Tuesday warned that it could not predict if its pandemic-induced sales dream run from last year will continue into 2021, even as its quarterly results handily beat analysts' estimates.

Stuck-at-home Americans have been snapping up tools, paint and building materials all through the COVID-19 health crisis, but the roll out of vaccines and the hopes for a normal life have led many to believe that demand in 2021 will fade.

"We are not able to predict how consumer spending will evolve," Home Depot Chief Financial Officer Richard McPhail said.

But if the demand environment during the back half of fiscal 2020 were to persist through the current year, it would imply flat to slightly positive comparable sales growth, McPhail said.

Smaller competitor Lowe's Cos Inc in December said a "robust" 2021 scenario for the home improvement market would likely be a 5per cent to 7per cent decline in demand.

Home Depot's shares fell 2per cent in premarket trading, even after it reported a 24.5per cent jump in fourth quarter same-store sales, beating analysts' average estimate of an 18.9per cent increase, according to IBES data from Refinitiv.

Overall net sales rose 25.1per cent to US$32.3 billion, beating estimates of US$30.73 billion. The company earned US$2.65 per share, while analysts had expected a profit of US$2.62 per share.

(Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli)

Source: Reuters

Bookmark