Home Depot to spend $1 billion more on hourly workers

(CNN) -- Home Depot said it will increase pay and benefits for front line hourly staff by $1 billion this year, another sign of a tighter labor market and rising wages across the US economy.

The home improvement retail chain did not detail how much of a pay raise the average hourly worker will receive.

The company disclosed the plan for increased compensation Tuesday when reporting record earnings for the fiscal year that ended in January. Earnings for the year reached $17.1 billion, up 4% from a year earlier, while net sales also rose 4% to $157 billion. Quarterly earnings per share of $3.30 were 2 cents better than forecast by analysts surveyed by Refinitiv.

The company's shareholders will also benefit from its successful year as it announced it is raising its dividend by 10%, or about $780 million. Its guidance forecasts that revenue will be little changed in the year ahead, and earnings per share will be down by a mid-single-digit percentage. Analysts had been forecasting a narrow increase in earnings per share for the year.

The company had 491,000 employees worldwide a year ago, according to the most recent figure disclosed in a company filing. About 92% of staff are hourly workers, with 437,000 of those in the United States.

Shares of Home Depot slipped 4% in premarket trading on the report.