ATLANTA – The cost of the spreading coronavirus pandemic dragged on profits early in the year at Home Depot.
The world's biggest home improvement chain upped compensation for employees, extended dependent care benefits and waived related co-pays. That set Home Depot back by $850 million in pre-tax expenses, or about 60 cents per share.
The cost of sales rose 7.3% in the quarter, which surged 7.1% as homeowners rushed to pick up essential supplies.
But on Tuesday, Home Depot pulled its financial guidance for the year with so much still unknown about the spread and duration of the virus, or its impact on spending.
Shares dropped 2.6% before the opening bell.
For the three months ended May 3, Home Depot Inc. earned $2.25 billion, or $2.08 per share. Industry analysts had expected $2.26 per share., according to a survey by Zacks Investment Research.
Last year, the Atlanta company earned $2.51 billion, or $2.27.
Revenue increased to $28.26 billion, from $26.38 billion, beating Wall Street's estimate of $27.61 billion.
Sales at stores open at least a year rose 6.4%. In the U.S., they climbed 7.5%.