Home Depot says a 12-foot skeleton was a popular Halloween item this year.
Home Depot Inc. HD, -0.07% said its third-quarter results benefited from continued consumer focus on the home during the coronavirus pandemic, with shoppers spending on everything from ceiling fans to power tools to a giant skeleton for Halloween.
“[W]e continue to see unprecedented levels of engagement from both new and existing customers across a variety of home improvement projects,” said Edward Decker, Home Depot’s chief operating officer, on the Tuesday earnings call, according to a FactSet transcript.
“We saw customers working on a variety of projects across their home with categories like garage organization, ceiling fans, vanities and power tools all posting comps well above the company average… Customers responded to our larger assortment of animatronics, inflatables and yard décor, as evidenced by our 12-foot skeleton that sold out before October.”
The skeleton and other spooky decorations were part of the annual Halloween event.
A late October survey published by CIT Bank found that 39% of adults planned to celebrate Halloween at home with a scary movie, and 30% would decorate their homes and yards.
The planned average yard or home décor spend was $39, according to CIT. The skeleton is currently listed online as out of stock at $74.75, down from the original $299 price.
Analysts remain confident that the positive news from Home Depot will continue.
“Home Depot noted that trends have accelerated further thus far in November,” wrote UBS analysts led by Michael Lasser. “While early Black Friday promotions have likely helped, it shows that the category remains in a good spot.”
UBS rates Home Depot stock buy with a $315 price target.
Home Depot, like many retailers, has extended its Black Friday and other holiday promotions beyond just a single day or event in order to minimize crowds and aid with social distancing.
“Home Depot continues to exceed any reasonable expectation from just a few months back, and we believe the company likely has a solid path towards continuing this trend for at least the next few quarters,” wrote Raymond James analyst Matthew McClintock.
“We believe the company’s strategic investments over the past several years positions Home Depot well to address once in a generation market share consolidation opportunities.”
Raymond James rates Home Depot stock outperform with a $305 price target.
Wedbush analysts highlight the risks ahead.
“An elongated holiday season has contributed to comps accelerating to start 4Q, but we would be surprised by sustained comp acceleration through the quarter,” analysts led by Seth Basham said.
“Nonetheless, we expect very strong comps to persist, particularly as Pro demand accelerates, albeit with some risk should more consumers decide it is unsafe for Pros to be in their homes due to rising coronavirus cases.”
Going even further out, analysts say comps in the second-quarter of 2021 will “toughen.”
Wedbush rates Home Depot stock neutral with a $300 price target
Home Depot stock has slipped 1.7% for the week so far despite an earnings and sales beat, but shares have rallied 24.6% for the year to date. The Dow Jones Industrial Average DJIA, -0.18% is up 4.2% for 2020 so far.