The Home Depot Announces Third Quarter Results; Updates Fiscal Year
2012 Guidance
ATLANTA, Nov. 13, 2012 /PRNewswire/ -- The Home
Depot®, the world's largest home improvement retailer,
today reported sales of $18.1 billion
for the third quarter of fiscal 2012, a 4.6 percent increase from
the third quarter of fiscal 2011. Comparable store sales for the
third quarter of fiscal 2012 were positive 4.2 percent, and comp
sales for U.S. stores were positive 4.3 percent.
(Logo:
http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO)
Net earnings for the third quarter were $947 million, or $0.63 per diluted share, compared with net
earnings of $934 million, or
$0.60 per diluted share, in the same
period of fiscal 2011. These results reflect a nonrecurring charge
of approximately $165 million, net of
tax, or $0.11 per diluted share due
to the previously announced closing of seven stores in China. On an adjusted basis, the Company
reported net earnings of $1.1
billion, or $0.74 per diluted
share, a 23.3 percent increase from the same period in the prior
year.
"Our third-quarter results were better than we expected and
reflected, in part, what we believe is the start of the path toward
the healing of the housing market," said Frank Blake, chairman & CEO. "I particularly
want to thank all of our associates who are helping the communities
impacted by Hurricane Sandy. They are working under difficult
circumstances, often with their own lives and homes disrupted by
the storm, and their efforts exemplify our core
values."
Updated Fiscal 2012 Guidance
Based on its performance through the third quarter, the Company
updated its fiscal 2012 guidance and raised its sales growth
guidance to be up approximately 5.2 percent for the year on a
53-week basis. The Company expects fiscal 2012 diluted earnings per
share to be up approximately 18 percent to $2.92 for the year.
On an adjusted basis, the Company raised its diluted earnings
per share growth guidance to be up approximately 23 percent to
$3.03 excluding the $0.11 per diluted share impact related to the
closing of seven stores in China.
This earnings-per-share guidance includes the benefit of the
Company's year-to-date share repurchases and the Company's intent
to repurchase $700 million in
additional shares in the fourth quarter of fiscal 2012, which will
bring the total dollar amount of shares repurchased to $4 billion for the year.
The Home Depot will conduct a conference call today at
9 a.m. ET to discuss information
included in this news release and related matters. The conference
call will be available in its entirety through a webcast and replay
at earnings.homedepot.com.
At the end of the third quarter, the Company operated a total of
2,250 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S.
Virgin Islands, Guam, 10
Canadian provinces and Mexico.
The Company employs more than 300,000 associates. The Home
Depot's stock is traded on the New York Stock Exchange (NYSE: HD)
and is included in the Dow Jones industrial average and Standard
& Poor's 500 index.
To provide clarity, internally and externally, about the
Company's operating performance for recently completed fiscal
periods, the Company has supplemented its reporting with non-GAAP
financial measures to reflect the impact of the charges related to
the closing of seven stores in China. The Company believes that these
non-GAAP financial measures better enable management and investors
to understand and analyze the Company's performance by providing
them with meaningful information relevant to events of unusual
nature or frequency that impact the comparability of underlying
business results from period to period. However, this supplemental
information should not be considered in isolation or as a
substitute for the related GAAP measures. A reconciliation of the
non-GAAP financial measures to the comparable GAAP measures can be
found attached to this press release and at
http://earnings.homedepot.com.
Certain statements contained herein constitute
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may
relate to, among other things, the demand for our products and
services, net sales growth, comparable store sales, state of the
economy, state of the residential construction, housing and home
improvement markets, state of the credit markets, including
mortgages, home equity loans and consumer credit, inventory and
in-stock positions, commodity price inflation and deflation,
implementation of store and supply chain initiatives, continuation
of share repurchase programs, net earnings performance, earnings
per share, capital allocation and expenditures, liquidity, return
on invested capital, management of relationships with our suppliers
and vendors, stock-based compensation expense, the effect of
accounting charges, the effect of adopting certain accounting
standards, the ability to issue debt on terms and at rates
acceptable to us, store openings and closures, expense leverage,
guidance for fiscal 2012 and beyond and financial outlook.
Forward-looking statements are based on currently available
information and our current assumptions, expectations and
projections about future events. You should not rely on our
forward-looking statements. These statements are not guarantees of
future performance and are subject to future events, risks and
uncertainties – many of which are beyond our control or are
currently unknown to us – as well as potentially inaccurate
assumptions that could cause actual results to differ materially
from our expectations and projections. These risks and
uncertainties include but are not limited to those described in
Item 1A, "Risk Factors," and elsewhere in our Annual Report on
Form 10-K for our fiscal year ended January
29, 2012 and in our subsequent Quarterly Reports on Form
10-Q.
Forward-looking statements speak only as of the date they are
made, and we do not undertake to update these statements other than
as required by law. You are advised, however, to review any further
disclosures we make on related subjects in our periodic filings
with the Securities and Exchange Commission.
THE
HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE
THREE MONTHS AND NINE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30,
2011
(Unaudited)
(Amounts in Millions Except Per Share Data and as
Otherwise Noted)
|
|
Three
Months Ended
|
|
|
|
Nine
Months Ended
|
|
|
|
October 28,
2012
|
|
October 30,
2011
|
|
% Increase
(Decrease)
|
|
October 28, 2012
|
|
October 30, 2011
|
|
% Increase
(Decrease)
|
NET
SALES
|
$
|
18,130
|
|
|
$
|
17,326
|
|
|
4.6
|
%
|
|
$
|
56,508
|
|
|
$
|
54,381
|
|
|
3.9
|
%
|
Cost of
Sales
|
11,863
|
|
|
11,365
|
|
|
4.4
|
|
|
37,032
|
|
|
35,716
|
|
|
3.7
|
|
GROSS PROFIT
|
6,267
|
|
|
5,961
|
|
|
5.1
|
|
|
19,476
|
|
|
18,665
|
|
|
4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative
|
4,139
|
|
|
3,956
|
|
|
4.6
|
|
|
12,291
|
|
|
12,151
|
|
|
1.2
|
|
Depreciation and Amortization
|
395
|
|
|
390
|
|
|
1.3
|
|
|
1,169
|
|
|
1,183
|
|
|
(1.2)
|
|
Total Operating Expenses
|
4,534
|
|
|
4,346
|
|
|
4.3
|
|
|
13,460
|
|
|
13,334
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
1,733
|
|
|
1,615
|
|
|
7.3
|
|
|
6,016
|
|
|
5,331
|
|
|
12.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and Other (Income) Expense:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Investment Income
|
(5)
|
|
|
(4)
|
|
|
25.0
|
|
|
(14)
|
|
|
(9)
|
|
|
55.6
|
|
Interest Expense
|
155
|
|
|
162
|
|
|
(4.3)
|
|
|
466
|
|
|
452
|
|
|
3.1
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(67)
|
|
|
—
|
|
|
N/A
|
|
Interest and Other, net
|
150
|
|
|
158
|
|
|
(5.1)
|
|
|
385
|
|
|
443
|
|
|
(13.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS BEFORE PROVISION FOR
INCOME
TAXES
|
1,583
|
|
|
1,457
|
|
|
8.6
|
|
|
5,631
|
|
|
4,888
|
|
|
15.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Income Taxes
|
636
|
|
|
523
|
|
|
21.6
|
|
|
2,117
|
|
|
1,779
|
|
|
19.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
|
$
|
947
|
|
|
$
|
934
|
|
|
1.4
|
%
|
|
$
|
3,514
|
|
|
$
|
3,109
|
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares
|
1,487
|
|
|
1,540
|
|
|
(3.4)
|
%
|
|
1,505
|
|
|
1,572
|
|
|
(4.3)
|
%
|
BASIC
EARNINGS PER SHARE
|
$
|
0.64
|
|
|
$
|
0.61
|
|
|
4.9
|
|
|
$
|
2.33
|
|
|
$
|
1.98
|
|
|
17.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Weighted Average Common Shares
|
1,498
|
|
|
1,548
|
|
|
(3.2)
|
%
|
|
1,517
|
|
|
1,581
|
|
|
(4.0)
|
%
|
DILUTED
EARNINGS PER SHARE
|
$
|
0.63
|
|
|
$
|
0.60
|
|
|
5.0
|
|
|
$
|
2.32
|
|
|
$
|
1.97
|
|
|
17.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
Nine
Months Ended
|
|
|
SELECTED HIGHLIGHTS
|
October 28,
2012
|
|
October 30,
2011
|
|
% Increase
(Decrease)
|
|
October 28, 2012
|
|
October 30, 2011
|
|
%
Increase
(Decrease)
|
Number of
Customer Transactions
|
331.0
|
|
|
325.3
|
|
|
1.7
|
%
|
|
1,034.8
|
|
|
1,014.5
|
|
|
2.0
|
%
|
Average
Ticket (actual)
|
$
|
54.55
|
|
|
$
|
53.03
|
|
|
2.9
|
|
|
$
|
54.71
|
|
|
$
|
53.50
|
|
|
2.3
|
|
Weighted
Average Weekly Sales per
Operating
Store (in thousands)
|
$
|
616
|
|
|
$
|
590
|
|
|
4.4
|
|
|
$
|
644
|
|
|
$
|
620
|
|
|
3.9
|
|
Square
Footage at End of Period
|
235
|
|
|
235
|
|
|
—
|
|
|
235
|
|
|
235
|
|
|
—
|
|
Capital
Expenditures
|
$
|
336
|
|
|
$
|
351
|
|
|
(4.3)
|
|
|
$
|
887
|
|
|
$
|
820
|
|
|
8.2
|
|
Depreciation and Amortization
(1)
|
$
|
424
|
|
|
$
|
416
|
|
|
1.9
|
%
|
|
$
|
1,257
|
|
|
$
|
1,265
|
|
|
(0.6)
|
%
|
__________
|
|
|
|
(1)
|
Includes
depreciation of distribution centers and tool rental equipment
included in Cost of Sales and amortization of
|
|
deferred
financing costs included in Interest Expense.
|
N/A - Not
Applicable
|
|
THE
HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS ITEMS
EXCLUDING CERTAIN ADJUSTMENTS (NON-GAAP)
FOR THE
THREE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30,
2011
(Unaudited)
(Amounts in Millions Except Per Share
Data)
|
|
Three
Months Ended October 28, 2012
|
|
Actuals
|
|
Adjustments(1)
|
|
As
Adjusted
(Non-GAAP)
|
Cost of
Sales
|
$
|
11,863
|
|
|
$
|
10
|
|
|
$
|
11,853
|
|
Gross
Profit
|
$
|
6,267
|
|
|
$
|
(10)
|
|
|
$
|
6,277
|
|
Total
Operating Expenses
|
$
|
4,534
|
|
|
$
|
155
|
|
|
$
|
4,379
|
|
Operating
Income
|
$
|
1,733
|
|
|
$
|
(165)
|
|
|
$
|
1,898
|
|
Net
Earnings
|
$
|
947
|
|
|
$
|
(165)
|
|
|
$
|
1,112
|
|
Diluted
Earnings Per Share
|
$
|
0.63
|
|
|
$
|
(0.11)
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
Three
Months Ended October 30, 2011
|
|
Actuals
|
|
Adjustments
|
|
As
Adjusted
(Non-GAAP)
|
Cost of
Sales
|
$
|
11,365
|
|
|
$
|
—
|
|
|
$
|
11,365
|
|
Gross
Profit
|
$
|
5,961
|
|
|
$
|
—
|
|
|
$
|
5,961
|
|
Total
Operating Expenses
|
$
|
4,346
|
|
|
$
|
—
|
|
|
$
|
4,346
|
|
Operating
Income
|
$
|
1,615
|
|
|
$
|
—
|
|
|
$
|
1,615
|
|
Net
Earnings
|
$
|
934
|
|
|
$
|
—
|
|
|
$
|
934
|
|
Diluted
Earnings Per Share
|
$
|
0.60
|
|
|
$
|
—
|
|
|
$
|
0.60
|
|
__________
|
|
|
(1)
|
Adjustments are comprised of charges related to the
closing of seven stores in China.
|
THE
HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF
OCTOBER 28, 2012, OCTOBER 30, 2011 AND JANUARY 29,
2012
(Unaudited)
(Amounts in Millions)
|
|
October 28,
2012
|
|
October 30,
2011
|
|
January 29,
2012
|
ASSETS
|
|
|
|
|
|
Cash and Cash Equivalents
|
$
|
2,554
|
|
|
$
|
2,234
|
|
|
$
|
1,987
|
|
Receivables, net
|
1,645
|
|
|
1,384
|
|
|
1,245
|
|
Merchandise Inventories
|
10,960
|
|
|
10,717
|
|
|
10,325
|
|
Other Current Assets
|
796
|
|
|
1,143
|
|
|
963
|
|
Total Current Assets
|
15,955
|
|
|
15,478
|
|
|
14,520
|
|
Property and Equipment, net
|
24,124
|
|
|
24,532
|
|
|
24,448
|
|
Goodwill
|
1,141
|
|
|
1,072
|
|
|
1,120
|
|
Other Assets
|
441
|
|
|
417
|
|
|
430
|
|
TOTAL ASSETS
|
$
|
41,661
|
|
|
$
|
41,499
|
|
|
$
|
40,518
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Accounts Payable
|
$
|
6,010
|
|
|
$
|
5,669
|
|
|
$
|
4,856
|
|
Accrued Salaries and Related Expenses
|
1,311
|
|
|
1,227
|
|
|
1,372
|
|
Current Installments of Long-Term Debt
|
34
|
|
|
44
|
|
|
30
|
|
Other Current Liabilities
|
3,311
|
|
|
3,646
|
|
|
3,118
|
|
Total Current Liabilities
|
10,666
|
|
|
10,586
|
|
|
9,376
|
|
Long-Term Debt
|
10,779
|
|
|
10,739
|
|
|
10,758
|
|
Other Long-Term Liabilities
|
2,478
|
|
|
2,405
|
|
|
2,486
|
|
Total Liabilities
|
23,923
|
|
|
23,730
|
|
|
22,620
|
|
Total Stockholders' Equity
|
17,738
|
|
|
17,769
|
|
|
17,898
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
|
$
|
41,661
|
|
|
$
|
41,499
|
|
|
$
|
40,518
|
|
THE
HOME DEPOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
FOR THE
NINE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30,
2011
(Unaudited)
(Amounts in Millions)
|
|
Nine
Months Ended
|
|
October 28,
2012
|
|
October 30,
2011
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
Net
Earnings
|
$
|
3,514
|
|
|
$
|
3,109
|
|
Reconciliation of Net Earnings to Net Cash Provided
by Operating Activities:
|
|
|
|
Depreciation and Amortization
|
1,257
|
|
|
1,265
|
|
Stock-Based Compensation Expense
|
158
|
|
|
157
|
|
Changes in Working Capital and Other
|
455
|
|
|
1,160
|
|
Net Cash Provided by Operating Activities
|
5,384
|
|
|
5,691
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
Capital
Expenditures
|
(887)
|
|
|
(820)
|
|
Payments
for Businesses Acquired, net
|
(121)
|
|
|
—
|
|
Proceeds
from Sale of Business, net
|
—
|
|
|
101
|
|
Proceeds
from Sales of Property and Equipment
|
21
|
|
|
36
|
|
Net Cash Used in Investing Activities
|
(987)
|
|
|
(683)
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
Proceeds
from Long-Term Borrowings, net of discount
|
—
|
|
|
1,994
|
|
Repayments
of Long-Term Debt
|
(23)
|
|
|
(1,021)
|
|
Repurchases of Common Stock
|
(3,330)
|
|
|
(3,056)
|
|
Proceeds
from Sales of Common Stock
|
697
|
|
|
91
|
|
Cash
Dividends Paid to Stockholders
|
(1,312)
|
|
|
(1,187)
|
|
Other
|
133
|
|
|
(118)
|
|
Net Cash Used in Financing Activities
|
(3,835)
|
|
|
(3,297)
|
|
Change in
Cash and Cash Equivalents
|
562
|
|
|
1,711
|
|
Effect of
Exchange Rate Changes on Cash and Cash Equivalents
|
5
|
|
|
(22)
|
|
Cash and
Cash Equivalents at the Beginning of the Period
|
1,987
|
|
|
545
|
|
Cash and
Cash Equivalents at the End of the Period
|
$
|
2,554
|
|
|
$
|
2,234
|
|
SOURCE The Home Depot