Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  The Home Depot, Inc.    HD

THE HOME DEPOT, INC.

(HD)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Amazon Fight Primed Big-Box Stores for Virus -- WSJ

08/25/2020 | 02:48am EST

By Sarah Nassauer and Jennifer Maloney

Nearly six months into the coronavirus pandemic in the U.S., big-box retailers are emerging as business winners while competitors -- including some apparel sellers and small businesses -- struggle.

The big sellers' strength wasn't always a sure thing. Early in the Covid-19 pandemic, while they had rising sales, they also had rising costs and complications as they tried to keep workers and customers safe and product moving.

But now, Walmart Inc., Home Depot Inc. and a handful of other big retailers are delivering not only strong sales but also strong profits. Last week, Target Corp. posted an 80% jump in earnings from a year ago, while profit leapt 75% at Lowe's Cos. Amazon.com Inc.'s profit doubled to a record $5.2 billion in its June quarter.

Several factors tie their success together. These big companies had already invested to build their online businesses and had cash on hand to adjust to the pandemic. They were selling what people were buying and had large supply networks they could tap to eventually restock. In addition, most were deemed essential retailers early in the pandemic and thus have largely remained open.

When the coronavirus surfaced in the Raleigh-Durham area this spring, Target stores were ready for the sharp increase in online orders. Most had already allowed shoppers to pick up items in parking lots. All had staffers in back rooms packing up orders.

"We had a lot of the infrastructure in place, and we just had to ramp up, " said Je'Varis Richardson, a Target district manager who oversees 13 stores in North Carolina.

Since February, Mr. Richardson's stores more than doubled the number of staff focused on packing online orders. Red and white signs were added to 50 more parking spots, designated as pickup areas. That preparedness helped Target report a record jump in quarterly sales and a 195% growth in digital sales.

Walmart, Amazon, Target, Home Depot, Lowe's and Costco Wholesale Corp. accounted for 29.1% of all U.S. retail sales in the second quarter, according to Craig Johnson, president of consulting firm Customer Growth Partners, up from 25.6% in the same period a year ago.

Investors will get another check of big-box retail's power when electronics giant Best Buy Co. reports its latest results on Tuesday.

Sales at smaller retailers fell 7% between March and mid-August compared with the same period last year, according to Womply, a data firm which tracks revenue at more than 70,000 small U.S. retailers. Many smaller chains had to clamber to start taking online orders or offer local delivery.

Carrie Tell, owner of a True Value Hardware store in Hopewell Junction, N.Y., has also seen demand for her products surge as shoppers spend more time at home, gardening and fixing things around the house. But unlike the larger retailers, her store, which has six full-time employees, wasn't ready for the e-commerce swell, she said.

Ms. Tell had planned to start offering goods for sale online in April, but the company she had booked to catalog her products to list online canceled when the state went into lockdown. "It really was exactly the moment when I could have used it," she said.

Her cashiers took curbside-delivery orders over the phone -- and called customers back to complete their purchases. Ms. Tell offered free local deliveries. Sales spiked but with the added labor costs, store-sanitizing and delivery expenses during the pandemic, her business is just slightly up compared with last year, she said.

Before the pandemic, Walmart, Target and many large retailers had already spent heavily to build e-commerce warehouses, mobile apps and delivery networks to compete with Amazon. Now they can leapfrog smaller retailers or those in weaker financial situations, such as department stores, said Matthew Hamory, a managing director in the retail practice at consulting firm AlixPartners.

"We will see a sort of winnowing out of the folks who were already structurally disadvantaged against the big box," he said.

Big-box profits benefited from higher prices. Strong consumer demand -- boosted by government stimulus checks -- and a shortage of some goods lessened the pressure to offer discounts.

"It just doesn't make sense for a retailer to be aggressive with the promotions right now," said Michael Lasser, a retail analyst at UBS. The outsize sales gains at large chains have more than offset higher expenses, such as wages and cleaning.

Many already weakened retailers such as department stores and apparel retailers gave up more ground to their big-box competitors amid forced closures, spending shifts and lagging e-commerce capabilities. Since May, several chains have filed for bankruptcy protection with plans to close many stores, including Lord & Taylor, J.C. Penney Co. and Stage Stores Inc.

Meanwhile, apparel spending rose at big-box stores such as Target and Walmart, which offer one-stop shopping, likely grabbing business from floundering competitors, say retail analysts.

Both Target and Walmart faced online challenges early in the pandemic as demand for household goods surged nationally. Walmart reduced the number of pickup and delivery windows it offered in March and April, instead using store workers to replace out-of-stock products by unloading trucks and stocking shelves.

"That lasted for a few weeks, but the team recovered," Walmart CEO Doug McMillon told analysts in June. Walmart has increased store pickup and delivery slots by around 30% since February, executives said last week. E-commerce sales rose 97% in the latest quarter.

Target had planned to add fresh food to its pickup and drive-up services in about half of stores this year, but paused that rollout in March "given the severe swings we were seeing in store traffic and the onslaught of new routines we are asking our store teams to perform," said Target CEO Brian Cornell last week.

By May, Target rolled out the services at an accelerated pace and is now offering them in 1,500 stores. Same-day pickup and delivery sales rose 270% in the most recent quarter. Sales from digital channels accounted for 17.2% of Target's total revenue for the quarter, the highest percentage in company history.

Some shoppers are being trained to use these online services at big-box retailers and won't go back to competitors, said Mr. Hamory from AlixPartners. "That share may have permanently shifted to bigger companies that were better able to capture it."

Suzanne Kapner contributed to this article.

Write to Sarah Nassauer at sarah.nassauer@wsj.com and Jennifer Maloney at jennifer.maloney@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. -0.45% 3292.23 Delayed Quote.1.08%
BEST BUY CO., INC 0.38% 114.93 Delayed Quote.15.17%
COSTCO WHOLESALE CORPORATION -0.14% 362.3 Delayed Quote.-3.84%
LOWE'S COMPANIES, INC. 0.03% 172.4 Delayed Quote.7.41%
STAGE STORES, INC. -19.73% 0.012 End-of-day quote.0.00%
TARGET CORPORATION 0.33% 191.91 Delayed Quote.8.71%
THE HOME DEPOT, INC. 1.77% 284 Delayed Quote.6.92%
UBS GROUP AG -0.68% 13.15 Delayed Quote.5.45%
WALMART INC. 1.02% 146.33 Delayed Quote.1.51%
YUM BRANDS -0.73% 107.09 Delayed Quote.-0.63%
All news about THE HOME DEPOT, INC.
01/19HOME DEPOT : Foundation - HONORING DR. KING AND HIS LEGACY WITH $150,000 DONATIO..
AQ
01/18HOME DEPOT : Honoring Dr. King and His Legacy with $150,000 Donation to Atlanta'..
PU
01/18Shareholder Proposal at Omnicom Questions Ad Buyers' Role in Online Hate
DJ
01/13THE HOMER FUND : Taking Care of Our People Through Tough Times
PU
01/13HOME DEPOT : Guggenheim Upgrades Home Depot to Buy From Neutral; Price Target is..
MT
01/07HOME DEPOT, INC. : Other Events, Financial Statements and Exhibits (form 8-K)
AQ
01/05HOME DEPOT : Benefits of Recycling Live Christmas Trees
PU
01/05Fitch Assigns Home Depot's Proposed Sr. Unsecured Notes 'A' Rating
AQ
2020Major Indexes All Rose in 2020 as Apple, Microsoft Led Gainers; Oil Prices De..
MT
2020STREET COLOR : 2020 By the Numbers
MT
More news
Financials (USD)
Sales 2021 130 B - -
Net income 2021 12 753 M - -
Net Debt 2021 27 357 M - -
P/E ratio 2021 24,0x
Yield 2021 2,12%
Capitalization 306 B 306 B -
EV / Sales 2021 2,56x
EV / Sales 2022 2,56x
Nbr of Employees 415 700
Free-Float 60,1%
Chart THE HOME DEPOT, INC.
Duration : Period :
The Home Depot, Inc. Technical Analysis Chart | HD | US4370761029 | MarketScreener
Technical analysis trends THE HOME DEPOT, INC.
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 33
Average target price 306,54 $
Last Close Price 284,00 $
Spread / Highest target 25,0%
Spread / Average Target 7,94%
Spread / Lowest Target -26,1%
EPS Revisions
Managers and Directors
NameTitle
Craig A. Menear Chairman & Chief Executive Officer
Edward P. Decker President & Chief Operating Officer
Richard V. McPhail Chief Financial Officer & Executive Vice President
Matthew A. Carey Chief Information Officer & Executive VP
Paul Antony Senior Vice President-Technology
Sector and Competitors
1st jan.Capitalization (M$)
THE HOME DEPOT, INC.6.92%305 755
LOWE'S COMPANIES, INC.7.41%126 321
KINGFISHER PLC0.96%7 844
HOME PRODUCT CENTER2.19%6 138
SIAM GLOBAL HOUSE PUBLIC COMPANY LIMITED14.71%2 862
BHG GROUP AB-6.82%2 184