Consumers lined up to buy cleaning supplies, hardware, and other home improvement goods amid the lockdowns, but higher employee costs hammered Home Depot's bottom line. Quarterly profit dropped nearly 11% and missed Wall Street's targets. The company had to double overtime pay, add more hours of paid time-off, and fork out additional bonuses for risks posed to staff working through the crisis. It spent $850 million on benefits for employees who kept its stores and warehouses running.
The uncertainties posed by the pandemic also forced the retailer to scrap its full-year outlook. That sent its shares lower in early trading Tuesday, dragging down the Dow.
On the plus side: the company experienced strong quarterly sales. Stay-at-home restrictions and government stimulus checks drove people to spend more money on tools for do-it-yourself home projects and stockpile cleaning supplies.
But spending on home improvement could fall this year. The company relies heavily on a solid housing market to drive sales. Home building activity collapsed in March as lockdowns battered the economy and people lost jobs.