Why Is Everyone Talking About Home Depot Stock?
The Home Depot (NYSE: HD) has been garnering plenty of attention as of late. Perhaps it's because the stock is up 16.5% so far in 2020 compared with a negative 2.3% return for the S&P 500. That's impressive, as this is already a massive retailer -- and it's even more impressive given that the retail industry overall is in various stages of rebounding from disaster. But not Home Depot.
Because of shelter-in-place orders to combat the spread of the coronavirus, the company was forced to scrap its "Spring Black Friday," an important season for home improvement stores as households spruce up their properties and stock up on what's needed for summer projects. Potentially missing out on one of its busiest events of the year meant trouble, as was reflected by a brief tumble in the company's share price in March and April. But it ultimately was no sweat -- years of investment in e-commerce capabilities equated to a stellar fiscal 2020 first quarter (the three months ended May 3, 2020) for the big-box store, and management reported online traffic was consistently above Black Friday levels (the actual Black Friday in November) in the last three weeks of April.
In fact, the whole home improvement industry has done quite well with so many people stuck at home. According to the U.S. Census Bureau, home improvement retail was up 4.4% through April compared to 2019. In contrast, retail and food service overall is down 4.3% year to date. But Home Depot is faring better than average, posting a 7.5% growth rate in U.S. comparable-store sales last quarter. As far as home improvement stocks go, Home Depot remains ahead of the pack in my book.
Source Fool.com