Sales from Home Depot’s digital platforms grew by about 80% in the first quarter as customers opted for online shopping over in-person browsing during the pandemic. As well, the strength of the US housing market should also help Home Depot thrive once the COVID-19 outbreak is contained, as lower borrowing costs boost home sales, making it easier for homeowners to increase spending on renovations. Walmart: Expanding Customer Base America’s biggest retailer, Walmart (NYSE:WMT) will also report second quarter earnings on Tuesday, Aug. 18, before the open. Consensus anticipates EPS of $1.25 on revenue of $135.29 billion. At a time when people are mostly staying home and consuming more mundane, daily staples, Walmart’s large brick-and-mortar presence has likely helped the Bentonville, Arkansas-based retailer to further expand its customer base and appeal. Hefty investment in e-commerce, steps toward growing its health care business and some added benefits for its 1.5-million strong workforce are a winning combination that has positioned the mega retailer to supply large swaths to the nation as governments and other businesses grapple with how to respond to the unprecedented health and economic threat. With the expectation the retail giant will report strong quarterly earnings and growing online sales, investors have pushed WMT shares higher by 12% this year. The stock closed up 0.6% on Friday at $132.60. As the coronavirus pandemic forces more consumers to pivot to online shopping, media reports indicate the retailer might soon launch a membership service called Walmart+, which would to compete with Amazon's (NASDAQ:AMZN) Prime. The lingering public health crisis offers a window of opportunity for Walmart to entice, and potentially lock-in, the swelling number of online shoppers through a membership program with speedy delivery and other perks. According to Bloomberg, citing a survey from Credit Suisse analysts and researcher Numerator, five million customers could join Walmart+ off the bat. The potential audience for the service could be as large as 20 million, the report says. Amazon’s Prime program, by contrast, has more than 118 million members in the US, according to Consumer Intelligence Research Partners. Bottom Line While both retailers are forecast to show improvements in their sales, their bottom-line profitability might get squeezed by the costs associated with higher worker pay and benefits, along with protecting customers during the coronavirus pandemic. That said, comparable sales and each vendor's online expansion will be the two critical numbers investors should focus on.
