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Home Depot (HD) Q2 Earnings & Sales Top Estimates, Stock Rises
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The Home Depot, Inc. (HD - Free Report) has posted second-quarter fiscal 2020 results, wherein earnings and sales beat the Zacks Consensus Estimate and improved year over year. The company has benefited from increased investments across the business, which allowed it to respond quickly to changing customer preference during the coronavirus pandemic. Further, it expects momentum in its One Home Depot investment strategy to help navigate through the current situation and position it for long-term growth.
In the fiscal second quarter, the company incurred an additional $480 million to provide incremental benefits to its associates, including weekly bonuses for hourly associates in stores and distribution centers. Year to date, it paid $1.3 billion for enhanced pay and benefits in response to the pandemic. Moreover, the company’s performance in the first half resulted in record a payout of success sharing under its profit-sharing program for hourly associates.
Shares of the home-improvement retailer gained 7.6% in the pre-market session, following the robust second-quarter fiscal 2020 earnings. Moreover, the Zacks Rank #3 (Hold) stock has rallied 32% year to date, outpacing the industry’s growth of 27.7%.
Q2 Highlights
Earnings of $4.02 per share improved 26.8% from $3.82 registered in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $3.71. Results gained from strong top-line growth as well as margin expansion.
Net sales rose 23.4% to $38,053 million from $30,839 million in the year-ago quarter and beat the Zacks Consensus Estimate of $35,111.2 million. Sales benefited from the company’s robust and flexible interconnected infrastructure, which helped it quickly adapt to the changing customer preferences amid the coronavirus pandemic. The company's overall comps grew 23.4%, with a 25% improvement in the United States.
The Home Depot, Inc. Price, Consensus and EPS Surprise
In the reported quarter, comps were aided by a 10.1% rise in average ticket and a 12.3% increase in customer transactions. Moreover, sales per square foot rose 23.5%.
In dollar terms, gross profit increased 24.1% to $12,941 million from $10,432 million in the year-ago quarter, primarily driven by robust sales growth. Meanwhile, gross profit margin expanded 18 basis points (bps) to 34%.
Operating income increased 23.9% to $6,067 million, while operating margin expanded 6 bps to 15.94%. Despite gains from the robust top line and gross-margin growth, operating margin was partly offset by additional expenses to provide higher remunerations to staff to recognize their efforts amid the pandemic.
Balance Sheet and Cash Flow
Home Depot ended second-quarter fiscal 2020 with cash and cash equivalents of $14,139 million, long-term debt (excluding current maturities) of $32,370 million, and shareholders' deficit of $414 million. In the first six months of fiscal 2020, it generated $14,829 million of net cash from operations.
In the first half of fiscal 2020, the company paid out cash dividends of $3,223 million and repurchased shares worth $791 million.
Concurrently, it declared the fiscal second-quarter dividend of $1.50 per share, which is payable Sep 17, 2020, to shareholders of record as of Sep 3.
Big Lots, Inc. (BIG - Free Report) , also a Zacks Rank #1 stock, has a long term earnings growth rate of 7.1%.
Tecnoglass Inc. (TGLS - Free Report) has a long-term earnings growth rate of 20% and a Zacks Rank #2 (Buy) at present.
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Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Home Depot (HD) Q2 Earnings & Sales Top Estimates, Stock Rises
The Home Depot, Inc. (HD - Free Report) has posted second-quarter fiscal 2020 results, wherein earnings and sales beat the Zacks Consensus Estimate and improved year over year. The company has benefited from increased investments across the business, which allowed it to respond quickly to changing customer preference during the coronavirus pandemic. Further, it expects momentum in its One Home Depot investment strategy to help navigate through the current situation and position it for long-term growth.
In the fiscal second quarter, the company incurred an additional $480 million to provide incremental benefits to its associates, including weekly bonuses for hourly associates in stores and distribution centers. Year to date, it paid $1.3 billion for enhanced pay and benefits in response to the pandemic. Moreover, the company’s performance in the first half resulted in record a payout of success sharing under its profit-sharing program for hourly associates.
Shares of the home-improvement retailer gained 7.6% in the pre-market session, following the robust second-quarter fiscal 2020 earnings. Moreover, the Zacks Rank #3 (Hold) stock has rallied 32% year to date, outpacing the industry’s growth of 27.7%.
Q2 Highlights
Earnings of $4.02 per share improved 26.8% from $3.82 registered in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $3.71. Results gained from strong top-line growth as well as margin expansion.
Net sales rose 23.4% to $38,053 million from $30,839 million in the year-ago quarter and beat the Zacks Consensus Estimate of $35,111.2 million. Sales benefited from the company’s robust and flexible interconnected infrastructure, which helped it quickly adapt to the changing customer preferences amid the coronavirus pandemic. The company's overall comps grew 23.4%, with a 25% improvement in the United States.
The Home Depot, Inc. Price, Consensus and EPS Surprise
The Home Depot, Inc. price-consensus-eps-surprise-chart | The Home Depot, Inc. Quote
In the reported quarter, comps were aided by a 10.1% rise in average ticket and a 12.3% increase in customer transactions. Moreover, sales per square foot rose 23.5%.
In dollar terms, gross profit increased 24.1% to $12,941 million from $10,432 million in the year-ago quarter, primarily driven by robust sales growth. Meanwhile, gross profit margin expanded 18 basis points (bps) to 34%.
Operating income increased 23.9% to $6,067 million, while operating margin expanded 6 bps to 15.94%. Despite gains from the robust top line and gross-margin growth, operating margin was partly offset by additional expenses to provide higher remunerations to staff to recognize their efforts amid the pandemic.
Balance Sheet and Cash Flow
Home Depot ended second-quarter fiscal 2020 with cash and cash equivalents of $14,139 million, long-term debt (excluding current maturities) of $32,370 million, and shareholders' deficit of $414 million. In the first six months of fiscal 2020, it generated $14,829 million of net cash from operations.
In the first half of fiscal 2020, the company paid out cash dividends of $3,223 million and repurchased shares worth $791 million.
Concurrently, it declared the fiscal second-quarter dividend of $1.50 per share, which is payable Sep 17, 2020, to shareholders of record as of Sep 3.
3 Better-Ranked Retail Stocks
Lumber Liquidators Holdings, Inc (LL - Free Report) has a long-term earnings growth rate of 27.5%. It presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots, Inc. (BIG - Free Report) , also a Zacks Rank #1 stock, has a long term earnings growth rate of 7.1%.
Tecnoglass Inc. (TGLS - Free Report) has a long-term earnings growth rate of 20% and a Zacks Rank #2 (Buy) at present.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>