Home improvement retailer Home Depot (HD 1.69%) announced strong sales and income growth in its third-quarter earnings report Tuesday. It also said that increased compensation made to frontline and hourly associates during the pandemic will be made permanent, adding about $1 billion in annual spending. 

Home Depot reported a comparable stores increase of 24.1%, with U.S. comp sales increasing 24.6%. Both revenue and earnings beat analyst expectations. Net income of $3.18 per diluted share was 26% higher than the year-ago period, and above analyst estimates of $3.06 per share, according to Refinitiv.

Front of Home Depot store

Image source: The Home Depot.

Chairman and CEO Craig Menear said in a statement the "exceptional" results reflected "the continuation of outsized demand for home improvement projects." In the nine months ended Nov. 1, 2020, Home Depot has increased its net cash provided by operating activities by more than 60% compared to the previous-year period. 

Earlier this year, in response to the COVID-19 pandemic, the company initiated programs to help its hourly workers that included paid time off and a temporary weekly bonus program. Now it says it will make these permanent for frontline hourly associates. This will result in an additional $1 billion on an annual basis, the company said. 

Home Depot continues to focus on growing several areas of the business, including attracting the professional customer. Yesterday, the company announced it was buying maintenance, repair, and operations products supplier HD Supply Holdings (HDS). The company is reuniting with the segment it sold to private equity in 2007 in a bid to remain a leader in the professional contractors business.