Home Depot said the uncertainty surrounding the pandemic has made it difficult to predict whether its sales dream realized last year will continue into 2021, even though its quarterly sales easily beat analysts’ expectations.
The company’s shares witnessed a 5% decline despite its comparable sales rising 24.5% in the fourth quarter, exceeding expectations for a rise of 18.9% only, these results come after many American citizens stuck in their homes due to the ban went to buy tools, paints and building materials during the period of the Corona virus crisis.
But the application of vaccines and hopes for the return of life to normal led many investors to believe that the company’s sales growth will disappear in 2021, and the company said that the demand it witnessed during the first half of the fiscal year 2020 if it continues in the current year, will result in flat or slightly positive growth in comparable sales and consistent operating profit margins of 14%.
Home Depot’s forecast of steady profit margins indicates its plans to continue investing in areas such as its e-commerce in order to gain market share, and according to the company’s fourth-quarter results, Home Depot reported a 25.1% increase in net sales to $32.3 billion, exceeding the $30.73 billion forecast by analysts. In addition, the company’s annual sales increased by about $22 billion, and it achieved profits of $2.65 per share, exceeding analysts’ expectations of a profit equivalent to only $2.62, thus increasing its quarterly dividends distributed to shareholders by 10%.