First Quarter Sales and Profits Skyrocket for Home Depot

One of the bright spots out of the Coronavirus pandemic has been the boom in new homes and remodeling of existing homes.

This has obviously fared well for home improvement retailer Home Depot who recently reported its first quarter financial results.

The home improvement and building boom has put serious pressure on prices for everything from plywood to copper pipes at the major home improvement retailers.

“Similar to what we reported in our previous three quarters, the growth in our comp average ticket was driven by elevated project demand, customers trading up to new and innovative products and continued inflation in many product categories including lumber,” Home Depot President and COO Ted Decker said on Tuesday.

“This was another record-setting quarter for lumber prices. Let me give you an example of what that means for one of our core lumber SKUs [stock keeping units]. At the end of the first quarter last year, a sheet of seven sixteenths OSB [or plywood] was approximately $9.55. As we exited the first quarter of this year, that same sheet of OSB more than quadrupled in price to $39.76.”

In 2021 lumber prices have so far exploded a staggering 127%. Copper prices are up 32% while steel prices have gained over 30%.

Home Depot said first quarter same-store sales surged 31% while same-store sales in the U.S. rose 29.9%. Operating profits exploded 76.5% from a year ago.

For the quarter the company reported net sales of $37.5 billion compared to $34.86 billion. Diluted EPS was $3.86 compared to $3.06 expected.

“Home Depot is a beneficiary of a healthy consumer that is committed to repair and remodeling projects. Pro-focused initiatives, enhanced e-commerce, optimized labor, and services will drive near-term results, with supply chain fortifying LT dominance,” said Jefferies analyst Jonathan Matuszewski in a research note to clients.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.