Home Depot (HD 2.01%) announced its first-quarter 2020 earnings results today, and they missed analyst estimates. But looking deeper into the report should make investors feel good, as the additional costs related to COVID-19 were for worker bonuses and other new benefits. Additionally, the home improvement retailer saw sales rise 7% compared to the year-ago quarter, and same-store sales growth came in at a strong 6.4%.
Though net income missed average analyst estimates by $0.19 per share, the company said the additional employee expenses related to the pandemic cost it $0.60 per diluted share after taxes.
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Those expenses included expanded paid time off for hourly associates that will be paid out if not used by the end of the year, along with additional time off for associates over 65 years of age, or who are at a higher risk. The company also doubled overtime pay, provided weekly bonuses for employees at retail stores and distribution warehouses, and extended other family healthcare benefits.
CEO and chairman Craig Menear discussed how the company adjusted operations to be able to continue serving customers as an essential business during the ongoing pandemic. He said the priorities were "working to ensure the safety and well-being of our associates and customers, and providing our customers and communities with essential products."
New procedures to support those priorities included revising store hours to increase time for sanitizing and restocking essential products, limiting customer traffic, and canceling the company's Spring Black Friday event to prevent additional store traffic. Home Depot also said it was maintaining its quarterly dividend to shareholders.
