Home Depot (HD) on Tuesday said it will invest $1 billion annually in employee benefits after the $1.7 billion it spent in temporary benefits during the pandemic. The home improvement giant did not provide specifics on how the average hourly wage will increase.
“It varies market by market. Our compensation, at all levels, is based on skills, responsibilities, performance and market rates,” a Home Depot spokesperson told Yahoo Finance. The spokesperson added that a “majority” of the 400,000 total employees will see a pay increase.
According to PayScale, Home Depot pays its employees an average of $12.70 an hour, and average hourly wages range from $10.58 to $18.64.
Home Depot’s temporary compensation programs included expanded paid time off and weekly bonuses.
The news comes as Home Depot reported stronger-than-expected third-quarter earnings. Sales at stores that have been open for at least one year surged 24% in the third quarter. Home Depot reported a net profit of $3.4 billion, an increase of more than 20% from a year ago.
“[The] investments we have made in the business as well as our associates’ focus on customers…are critical in enabling market share growth in any economic environment,” CEO Craig Menear said in the company’s earnings release.
Home Depot has thrived during the pandemic as many consumers have focused on home improvements while quarantining.
“Spending on the home continues to be a priority,” Neil Saunders, managing director of retail research firm GlobalData, said in a statement.
“Savings from lower outlays on commuting, eating out and not taking vacations have given consumers a pool of cash which they have diverted into home projects and activities,” Saunders said. “Improvement continues to be at the forefront of spending.”
Home Depot’s results come one day after the company announced plans to buy back HD Supply (HDS), a former subsidiary that focuses on selling construction materials to homebuilders, apartment managers, and the hospitality industry, for more than $8 billion.
Home Depot sold the business to private equity firms in 2007. There had been speculation that Lowe’s (LOW) was interested in purchasing HD Supply.
Shares of Home Depot were trading at 270.90, down 3.1%, as of 2:00 p.m. ET on Tuesday.