Depot

Forget Lowe’s, Home Depot Is a Better Home-Improvement Stock

The home-improvement industry has been surging as the coronavirus pandemic has forced so many people to spend more time at home. Not only are they noticing more projects that need to be done, but since the home now needs to be an office, a school, and an entertainment center, they need to upgrade or overhaul existing spaces. On top of all that, data shows that more families are deciding to move out of cities and into suburbs — which means out of apartments and into houses.

While the changes in consumer behavior during the pandemic were good for the home-improvement industry overall, some companies are better equipped to take advantage than others. Here is why Home Depot (NYSE:HD) is a better way to invest in this change than Lowe’s (NYSE:LOW)

A Home Depot storefron.

Image source: Home Depot.

Prospects 

The outlook is bright for both Home Depot and Lowe’s,

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Home Depot and Lowe’s are Having Huge Years: Can the Growth Continue?

2020 has been a hugely successful year for home improvement retail giants Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW). Both have seen revenue and net income grow by double digits as millions of homeowners have found themselves spending substantially more time in their homes during the coronavirus pandemic. But will the strong results continue? It’s less clear in the near term, especially with coronavirus vaccines now starting to be distributed. The same people who spent big on home improvement in 2020 might be more likely to spend their disposable income on travel and leisure in the future. 

On the Nov. 6 edition of “The Wrap” on Motley Fool Live, host Jason Hall makes the case that strong home sales often indicate good business prospects for home improvement. See his discussion with Motley Fool and Millionacres contributor Tyler Crowe editor Millionacres editor Deidre Woollard below. 

Transcript: 

Jason

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Home Depot, Inc. (The) (HD) Stock Forecasts

Summary

Home Depot is the world’s largest home improvement retailer, with sales of $110 billion for the fiscal year ended February 2, 2020. The company, which is based in Atlanta, sells appliances, tools, paint, lumber, plumbing and electrical, garden and other home-improvement supplies in warehouse-sized stores that average 105,000 square feet. About 31% of sales came from plumbing, electrical and kitchen; 29% from hardware and seasonal; 21% from building materials and 19% from paint and flooring. The company’s total selling space is about 238 million square feet. At the end of FY20, Home Depot had 2,291 stores. Approximately 28% of U.S. stores are in California, Florida and Texas. About 8% of the stores are in Canada and 4% are in Mexico. Online sales represented almost 8% of the FY19 total, up from about 7% at the end of FY18.

The company’s fiscal year ends on the Sunday nearest

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Home Depot Reports Sales Continue to Surge

Home improvement retailer Home Depot (NYSE:HD) announced strong sales and income growth in its third-quarter earnings report Tuesday. It also said that increased compensation made to frontline and hourly associates during the pandemic will be made permanent, adding about $1 billion in annual spending. 

Home Depot reported a comparable stores increase of 24.1%, with U.S. comp sales increasing 24.6%. Both revenue and earnings beat analyst expectations. Net income of $3.18 per diluted share was 26% higher than the year-ago period, and above analyst estimates of $3.06 per share, according to Refinitiv.

Front of Home Depot store

Image source: The Home Depot.

Chairman and CEO Craig Menear said in a statement the “exceptional” results reflected “the continuation of outsized demand for home improvement projects.” In the nine months ended Nov. 1, 2020, Home Depot has increased its net cash provided by operating activities by more than 60% compared to the previous-year period. 

Earlier

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Is Home Depot (HD) Benefiting From the Stay-at-Home Trend?

The Home Depot Inc. HD, which is a leading home-improvement retailer in the United States, is one of the prime beneficiaries of the coronavirus pandemic-induced a stay-at-home trend across all regions. This trend has proved to be a blessing for the home improvement industry. Notably, there has been a marked increase in repairs and home-remodeling projects in the past few months, as people are spending more time at home due to the increased work-from-home situation.

The company noted that accelerated customer engagement for home improvement in the second quarter of fiscal 2020 led to strong growth in its Pro and DIY customer categories. Notably, it witnessed strong demand for exterior and interior projects like deck building, painting projects, landscape work and home repairs due to increase wear and tear. As a result, DIY sales outpaced Pro sales growth in the fiscal second quarter.

Further, its Pro customers’ sales accelerated significantly

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Home Depot Q2 Sales Jump Over 23% Amid COVID-19 Restrictions; Target $320

Home Depot Inc, the largest home improvement retailer in the United States, reported sales of $38.1 billion for the second quarter of fiscal 2020, a 23.4% increase from a year earlier as consumers ordered more home improvement products amid COVID-19 restrictions, sending its shares up about 3% in pre-market trading on Tuesday.” data-reactid=”19″Home Depot Inc, the largest home improvement retailer in the United States, reported sales of $38.1 billion for the second quarter of fiscal 2020, a 23.4% increase from a year earlier as consumers ordered more home improvement products amid COVID-19 restrictions, sending its shares up about 3% in pre-market trading on Tuesday.

The home improvement retailer said its net earnings for the second quarter of fiscal 2020 were $4.3 billion, or $4.02 per diluted share, compared with net earnings of $3.5 billion, or $3.17 per diluted share, a year earlier.

For the second

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