Home Depot is giving raises to frontline and hourly workers that will add $1 billion a year to their paychecks after revenue and profit soared at the giant retailer.
Since the pandemic took hold earlier this year, the company has spent $1.7 billion on extra bonuses, paid leave and other benefits. The raises announced Tuesday will replace those programs.
“This is a permanent investment and that is different,” Richard McPhail, chief financial officer, told The Atlanta Journal-Constitution on Tuesday. “These are permanent wage increases.”
He declined to offer more details, but said that the wage hikes, which have already begun in some areas, will affect “the vast majority” of the company’s 400,000 employees. “There was no one catalyst for this. But we felt this was the time to do it.”
The retailer Tuesday also reported higher-than-expected profits for the most recent fiscal quarter as it continues to reap the benefits from online orders and a surge in do-it-yourself improvements.
Home Depot recorded sales of $33.5 billion for the three months ending Oct. 31, up 23% from the same period a year earlier. Net earnings during the quarter were $3.4 billion, up more than 20%.
With more than $120 billion in annual revenues, Vinings-based Home Depot is the largest company based in Georgia. The company has 2,295 stores, most of them in the United States.
Home Depot has opened few new stores in recent years. Even before the pandemic, Home Depot was aggressively pushing e-commerce, but online shopping soared as COVID-19 sent millions of Americans home.
The online business now accounts for about 13% of all sales, the company said. Moreover, Home Depot has used the online ordering to boost its in-store business: 60% of its online orders are picked up at a retail store.
Forecasts for the home improvement market in the coming year are impossible, McPhail said. “We can’t begin to try to predict that. What we do know is our sales appear not to have a relationship with the number of COVID cases.”
On Monday, Home Depot announced an agreement to buy HD Supply Holdings, an Atlanta-based distributor of products for apartments, hotels and institutions. That deal will be worth an estimated $8 billion.
Home Depot sales
Fiscal year 2016: $94.6 billion
Fiscal year 2017: $100.9 billion
Fiscal year 2018: $108.2 billion
Fiscal year 2019: $110.2 billion
Past four quarters*: $123.6 billion
*Includes first three quarters of 2020
Source: The Home Depot
©2020 The Atlanta Journal-Constitution (Atlanta, Ga.)