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The Atlanta-based home-improvement chain closed stores early beginning in mid-March to allow more time for sanitization and restocking essential products amid the COVID-19 pandemic and expanded paid time off and weekly bonuses. The improvements for associates resulted in a pre-tax charge of $850 million, or 60 cents a share after taxes.
Net income dropped to $2.2 billion, or $2.08 a share, as revenue rose 7.1 percent from a year ago to $28.26 billion. Wall Street analysts were anticipating adjusted earnings of $2.27 a share on revenue of $27.54 billion.
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“We took early and decisive action to intentionally limit customer traffic in our stores, which we believe had a significant impact to sales in many markets,” said CEO Craig Menear. “Even with these actions, the robust and flexible interconnected infrastructure that we have invested in for over a decade allowed us to quickly adapt to changing customer preferences and achieve strong sales performance in the quarter.”
Sales at stores open at least a year, an industry performance benchmark, rose 6.4 percent from the previous year and were up 7.5 percent in the U.S. An 11 percent jump to $74.70 in the average sales ticket helped make up for a 3.9 percent drop in the number of transactions. Sales per square foot rose 7.2 percent to $466.58.
Home Depot declared a quarterly dividend of $1.50 a share. The company withdrew its 2020 outlook due to uncertainty caused by the pandemic.
Home Depot shares rose 12 percent this year through Monday, outperforming the S&P 500's 8.57 percent decline.