ATLANTA, Nov. 19, 2019 /CNW/ -- The Home
Depot®, the world's largest home improvement retailer,
today reported third quarter fiscal 2019 sales of $27.2 billion, an increase of 3.5 percent, or
$921 million, compared to the third
quarter of fiscal 2018. Comparable sales for the third quarter of
fiscal 2019 were positive 3.6 percent, and comparable sales in the
U.S. were positive 3.8 percent.
Net earnings for the third quarter of fiscal 2019 were
$2.8 billion, or $2.53 per
diluted share, compared with net earnings of $2.9 billion, or $2.51 per diluted
share, in the same period of fiscal 2018. For the third quarter of
fiscal 2019, diluted earnings per share increased 0.8 percent from
the same period in the prior year.
"Our third quarter results reflected broad-based growth across
our business, yet sales were below our expectations driven by the
timing of certain benefits associated with our One Home Depot
strategic investments," said Craig
Menear, chairman, CEO and president. "We are largely on
track with these investments and have seen positive results, but
some of the benefits anticipated for fiscal 2019 will take longer
to realize than our initial assumptions. As a result, today we are
updating our fiscal 2019 sales guidance, and we are reaffirming our
fiscal 2019 earnings-per-share guidance. We are encouraged by the
momentum in our business as we invest to extend our competitive
advantages. I would like to thank our associates for their hard
work and continued dedication to our customers."
Fiscal 2019 Guidance
The Company updated its guidance for fiscal 2019, a 52-week year
compared to fiscal 2018, a 53-week year. The Company expects its
fiscal 2019 sales to grow by approximately 1.8 percent and comp
sales for the comparable 52-week period to increase approximately
3.5 percent. This compares to the Company's prior fiscal 2019 sales
growth guidance of 2.3 percent and comp sales growth of 4.0
percent. The Company reaffirmed its diluted earnings-per-share
guidance for the year and expects diluted earnings-per-share growth
of approximately 3.1 percent from fiscal 2018 to $10.03.
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 http://ir.homedepot.com/events-and-presentations.
At the end of the third quarter, the Company operated a total of
2,290 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 400,000 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.
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 sales; effects of
competition; implementation of store, interconnected retail, supply
chain and technology initiatives; inventory and in-stock positions;
state of the economy; state of the housing and home improvement
markets; state of the credit markets, including mortgages, home
equity loans and consumer credit; impact of tariffs; issues related
to the payment methods we accept; demand for credit offerings;
management of relationships with our associates, suppliers and
vendors; continuation of share repurchase programs; net earnings
performance; earnings per share; dividend targets; capital
allocation and expenditures; liquidity; return on invested capital;
expense leverage; stock-based compensation expense; commodity price
inflation and deflation; the ability to issue debt on terms and at
rates acceptable to us; the impact and expected outcome of
investigations, inquiries, claims and litigation; the effect of
accounting charges; the effect of adopting certain accounting
standards; the impact of the Tax Cuts and Jobs Act of 2017 and
other regulatory changes; store openings and closures; guidance for
fiscal 2019 and beyond; financial outlook; and the integration of
acquired companies into our organization and the ability to
recognize the anticipated synergies and benefits of those
acquisitions. 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, dependent on the actions of third parties, 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 February 3,
2019 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.
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
in millions,
except per share data
|
November 3,
2019
|
|
October 28,
2018
|
|
% Change
|
|
November 3,
2019
|
|
October 28,
2018
|
|
% Change
|
Net sales
|
$
|
27,223
|
|
|
$
|
26,302
|
|
|
3.5
|
%
|
|
$
|
84,443
|
|
|
$
|
81,712
|
|
|
3.3
|
%
|
Cost of
sales
|
17,836
|
|
|
17,151
|
|
|
4.0
|
|
|
55,607
|
|
|
53,579
|
|
|
3.8
|
|
Gross
profit
|
9,387
|
|
|
9,151
|
|
|
2.6
|
|
|
28,836
|
|
|
28,133
|
|
|
2.5
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
4,942
|
|
|
4,808
|
|
|
2.8
|
|
|
14,926
|
|
|
14,591
|
|
|
2.3
|
|
Depreciation and
amortization
|
498
|
|
|
473
|
|
|
5.3
|
|
|
1,470
|
|
|
1,390
|
|
|
5.8
|
|
Total operating
expenses
|
5,440
|
|
|
5,281
|
|
|
3.0
|
|
|
16,396
|
|
|
15,981
|
|
|
2.6
|
|
Operating
income
|
3,947
|
|
|
3,870
|
|
|
2.0
|
|
|
12,440
|
|
|
12,152
|
|
|
2.4
|
|
Interest and other
(income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
investment income
|
(22)
|
|
|
(25)
|
|
|
(12.0)
|
|
|
(56)
|
|
|
(73)
|
|
|
(23.3)
|
|
Interest
expense
|
302
|
|
|
249
|
|
|
21.3
|
|
|
892
|
|
|
782
|
|
|
14.1
|
|
Interest and other,
net
|
280
|
|
|
224
|
|
|
25.0
|
|
|
836
|
|
|
709
|
|
|
17.9
|
|
Earnings before
provision for income taxes
|
3,667
|
|
|
3,646
|
|
|
0.6
|
|
|
11,604
|
|
|
11,443
|
|
|
1.4
|
|
Provision for income
taxes
|
898
|
|
|
779
|
|
|
15.3
|
|
|
2,843
|
|
|
2,666
|
|
|
6.6
|
|
Net
earnings
|
$
|
2,769
|
|
|
$
|
2,867
|
|
|
(3.4)
|
%
|
|
$
|
8,761
|
|
|
$
|
8,777
|
|
|
(0.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average common shares
|
1,089
|
|
|
1,135
|
|
|
(4.1)
|
%
|
|
1,096
|
|
|
1,144
|
|
|
(4.2)
|
%
|
Basic earnings per
share
|
$
|
2.54
|
|
|
$
|
2.53
|
|
|
0.4
|
|
|
$
|
7.99
|
|
|
$
|
7.67
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares
|
1,094
|
|
|
1,141
|
|
|
(4.1)
|
%
|
|
1,100
|
|
|
1,150
|
|
|
(4.3)
|
%
|
Diluted earnings per
share
|
$
|
2.53
|
|
|
$
|
2.51
|
|
|
0.8
|
|
|
$
|
7.96
|
|
|
$
|
7.63
|
|
|
4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
Selected Sales
Data (1)
|
November 3,
2019
|
|
October 28,
2018
|
|
% Change
|
|
November 3,
2019
|
|
October 28,
2018
|
|
% Change
|
Customer transactions
(in millions)
|
400.9
|
|
|
394.8
|
|
|
1.5
|
%
|
|
1,246.4
|
|
|
1,226.0
|
|
|
1.7
|
%
|
Average
ticket
|
$
|
66.36
|
|
|
$
|
65.11
|
|
|
1.9
|
|
|
$
|
67.00
|
|
|
$
|
65.79
|
|
|
1.8
|
|
Sales per square
foot
|
$
|
449.17
|
|
|
$
|
433.99
|
|
|
3.5
|
|
|
$
|
464.68
|
|
|
$
|
449.94
|
|
|
3.3
|
|
—————
(1)
|
Selected Sales
Data does not include results for the legacy Interline Brands
business, now operating as a part of The Home Depot
Pro.
|
THE HOME DEPOT,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
in
millions
|
November 3,
2019
|
|
October 28,
2018
|
|
February 3,
2019
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,193
|
|
|
$
|
1,764
|
|
|
$
|
1,778
|
|
Receivables,
net
|
2,231
|
|
|
2,171
|
|
|
1,936
|
|
Merchandise
inventories
|
15,711
|
|
|
14,754
|
|
|
13,925
|
|
Other current
assets
|
1,039
|
|
|
1,120
|
|
|
890
|
|
Total current
assets
|
21,174
|
|
|
19,809
|
|
|
18,529
|
|
Net property and
equipment
|
22,472
|
|
|
22,054
|
|
|
22,375
|
|
Operating lease
right-of-use assets
|
5,638
|
|
|
—
|
|
|
—
|
|
Goodwill
|
2,253
|
|
|
2,258
|
|
|
2,252
|
|
Other
assets
|
772
|
|
|
1,079
|
|
|
847
|
|
Total
assets
|
$
|
52,309
|
|
|
$
|
45,200
|
|
|
$
|
44,003
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Short-term
debt
|
$
|
695
|
|
|
$
|
1,398
|
|
|
$
|
1,339
|
|
Accounts
payable
|
9,240
|
|
|
9,054
|
|
|
7,755
|
|
Accrued salaries and
related expenses
|
1,467
|
|
|
1,495
|
|
|
1,506
|
|
Current installments
of long-term debt
|
1,818
|
|
|
1,054
|
|
|
1,056
|
|
Current operating
lease liabilities
|
828
|
|
|
—
|
|
|
—
|
|
Other current
liabilities
|
5,517
|
|
|
5,195
|
|
|
5,060
|
|
Total current
liabilities
|
19,565
|
|
|
18,196
|
|
|
16,716
|
|
Long-term debt,
excluding current installments
|
26,597
|
|
|
23,332
|
|
|
26,807
|
|
Long-term operating
lease liabilities
|
5,113
|
|
|
—
|
|
|
—
|
|
Other
liabilities
|
2,116
|
|
|
2,352
|
|
|
2,358
|
|
Total
liabilities
|
53,391
|
|
|
43,880
|
|
|
45,881
|
|
Total stockholders'
(deficit) equity
|
(1,082)
|
|
|
1,320
|
|
|
(1,878)
|
|
Total liabilities and
stockholders' equity
|
$
|
52,309
|
|
|
$
|
45,200
|
|
|
$
|
44,003
|
|
THE HOME DEPOT,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Nine Months
Ended
|
in
millions
|
November 3,
2019
|
|
October 28,
2018
|
Cash Flows from
Operating Activities:
|
|
|
|
Net
earnings
|
$
|
8,761
|
|
|
$
|
8,777
|
|
Reconciliation of net
earnings to net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
1,701
|
|
|
1,603
|
|
Stock-based
compensation expense
|
197
|
|
|
204
|
|
Changes in working
capital
|
(166)
|
|
|
(366)
|
|
Changes in deferred
income taxes
|
107
|
|
|
(64)
|
|
Other operating
activities
|
64
|
|
|
(118)
|
|
Net cash provided by
operating activities
|
10,664
|
|
|
10,036
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital expenditures,
net of non-cash capital expenditures
|
(1,891)
|
|
|
(1,711)
|
|
Proceeds from sales
of property and equipment
|
21
|
|
|
21
|
|
Other investing
activities
|
(10)
|
|
|
(3)
|
|
Net cash used in
investing activities
|
(1,880)
|
|
|
(1,693)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Repayments of
short-term debt, net
|
(644)
|
|
|
(161)
|
|
Proceeds from
long-term debt, net of discounts and premiums
|
1,404
|
|
|
—
|
|
Repayments of
long-term debt
|
(1,046)
|
|
|
(1,192)
|
|
Repurchases of common
stock
|
(3,909)
|
|
|
(5,518)
|
|
Proceeds from sales
of common stock
|
185
|
|
|
140
|
|
Cash
dividends
|
(4,477)
|
|
|
(3,548)
|
|
Other financing
activities
|
9
|
|
|
99
|
|
Net cash used in
financing activities
|
(8,478)
|
|
|
(10,180)
|
|
Change in cash and
cash equivalents
|
306
|
|
|
(1,837)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
109
|
|
|
6
|
|
Cash and cash
equivalents at beginning of period
|
1,778
|
|
|
3,595
|
|
Cash and cash
equivalents at end of period
|
$
|
2,193
|
|
|
$
|
1,764
|
|
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SOURCE The Home Depot