Americans turned to Walmart Inc and Home Depot Inc for supplies and do-it-yourself projects as they stayed close to home when new cases of COVID-19 surged, resulting in soaring sales for the companies’ fiscal second quarter.
Walmart’s online sales nearly doubled in the fiscal second quarter, helped by an expansion of its online delivery services.
Sales at US locations that had been open at least a year jumped 9.3 percent, the company reported on Tuesday.
Photo: AFP
With customers not going out to eat as much, they are cooking at home, spurring sales of groceries, while also buying items to set up their home offices or improve their outdoor areas, store executives said.
Home Depot, the US’ largest home improvement chain, on Tuesday reported a 23.4 percent increase in sales at stores that had been open at least a year globally, helped by a frenzied pace of do-it-yourself projects.
That is almost twice the 12.2 percent increase that industry analysts had projected.
However, department store chain Kohl’s reported an adjusted loss that was smaller than expected and revenue fell 23 percent during the fiscal second quarter.
The results came as Kohl’s worked to reopen its 1,100 stores after temporarily closing them all during the start of the pandemic.
“Some parts of retailing are thriving; some parts are being devastated,” GlobalData Retail managing director Neil Saunders said. “It’s demonstrating a dramatic shift of how and where shoppers are spending their money. People’s lives are revolving around the home. That means food, home improvement and comfortable clothes.”
Consumers had already begun to rely on Walmart, Home Depot and other essential retailers such as Target Corp and Amazon.com Inc as lifelines for necessities during the start of the pandemic.
Walmart’s online sales, for example, rose 74 percent for the fiscal first quarter. That trend accelerated to 97 percent in the second quarter and broadened the gap between traditional retailers, many of them anchor stores at malls, and big-box operators such as Walmart and Target.
With unemployment in the US hitting frighteningly high levels, Walmart’s ability to deliver low-priced food, clothing and electronics strengthened its structural advantages further.
Net income for Walmart, based in Bentonville, Arkansas, reached US$6.48 billion in the quarter, or US$2.27 per share.
Earnings, adjusted for one-time gains and costs, were US$1.56 per share, easily outpacing Wall Street projections of US$1.22, a Zacks Investment Research survey showed.
The world’s largest retailer posted revenue of US$137.74 billion, also exceeding expectations.
Home Depot, based in Atlanta, earned US$4.33 billion, or US$4.02 per share, in the quarter, which was also far stronger than the per-share projections of US$3.70 from analysts.
A year earlier it earned US$3.48 billion, or US$3.17 per share.
Home Depot’s revenue hit US$38.05 billion, far exceeding the US$34.94 billion Wall Street was expecting, a Zacks Investment Research survey showed.
The company easily topped last year’s revenue of US$30.84 billion for the three months that ended on Aug. 2.
Kohl’s chief executive Michelle Gass on Tuesday told reporters that the chain, based in Menomonee, Wisconsin, should benefit from mostly being located at strip centers, and aims to capture market share from rivals that are closing stores.
Its home furnishings are resonating even more as shoppers are focusing on their home, she said.
During the second quarter, online sales soared 58 percent and about 50 percent of its online business was fulfilled in stores.
“We will be a beneficiary of consumers adopting more casual lifestyles and shopping more digitally,” Gass told analysts on a call.
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