(Reuters) – Home Depot Inc (HD.N) reported it biggest rise in quarterly same-store sales in at least two decades on Tuesday as demand for paint, tools and other home improvement products surged from consumers stuck indoors due to the COVID-19 pandemic.
Shares of the Dow component rose more than 3% in premarket trading after the company said its same-store sales jumped 23.4% in the second quarter, surging past analysts’ average estimate of a 10.5% rise.
Home Depot and smaller rival Lowe’s Cos Inc (LOW.N) have been among a handful of corporate winners since the start of the pandemic, as more people took up do-it-yourself projects such as painting and gardening while at home.
The U.S. housing market’s stronger performance compared with the broader economy has also given people more impetus to remodel their homes, driving demand for home improvement tools and items.
“The massive shifts in spending that we are seeing will remain fairly similar for the foreseeable future until we have a reliable healthcare solution for COVID-19,” RBC capital Markets analyst Scott Ciccarelli wrote in a note to clients.
However, Ciccarelli warned investors that Home Depot’s current pace of sales growth would be difficult to top next year.
Net income rose 24.5% to $4.33 billion, or $4.02 per share, in the quarter ended Aug. 2, despite the company spending $480 million in additional benefits to compensate employees required to work in stores and warehouses amid the health crisis.
Analysts had expected a profit of $3.71 per share, according to IBES data from Refinitiv.
Overall net sales rose 23.4% to a record $38.05 billion, beating analysts’ estimates of $34.53 billion.
Shares of Lowe’s, which reports second-quarter results on Wednesday, also rose nearly 3% before the bell.
Graphic: Interactive graphic on same-stores sales here
Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur and Anil D’Silva