Home Depot or Macy's, Investors Aren't Happy
The retailers are polar opposites in how they’ve fared in the pandemic, but their earnings received the same nasty market reaction. Is it warranted?
Results from two big retailers suggest Covid shopping patterns will be sticking around awhile.
Photographers: Tim Boyle (Home Depot), Chris Hondros (Macy’s)/Getty Images
Home Depot Inc. and Macy’s Inc. can be thought of as the polar opposites of pandemic retailing: The home-improvement giant has been a chief beneficiary of the boom in purchases to make stay-at-home living comfortable, while the department store chain has been pummeled by a dearth of demand for new clothes. Though the pandemic has affected them in opposite ways, each issued guidance on Tuesday that offered a similar expectation for the year ahead: Don’t expect shopping to return to pre-pandemic patterns anytime soon.
Home Depot Inc. reported a blockbuster 25% quarterly comparable sales increase from a year earlier, reflecting strong gains in both transactions and spending per transaction as people continued to build out home offices, spiff up yards and embark on other renovations. But when it comes to the year ahead, the big-box store declined to offer specific 2021 guidance because of uncertainty surrounding the pandemic, giving just a directional hint that annual comparable sales would be flat to slightly up from 2020. This seemed to spook investors, and shares fell in early trading.