The Home Depot Announces Second Quarter Results; Updates Fiscal Year 2012 Guidance

14 Aug, 2012, 06:00 ET from The Home Depot

ATLANTA, Aug. 14, 2012 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported second quarter of fiscal 2012 net earnings of  $1.5 billion, or $1.01 per diluted share, compared with net earnings of $1.4 billion, or $0.86 per diluted share, in the same period of fiscal 2011. For the second quarter of fiscal 2012, diluted earnings per share increased 17.4 percent from the same period in the prior year.  

(Logo: http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO )

Sales for the second quarter totaled $20.6 billion, a 1.7 percent increase from the second quarter of fiscal 2011. Comparable store sales for the second quarter of fiscal 2012 were positive 2.1 percent, and comp sales for U.S. stores were positive 2.6 percent.

"As expected, second-quarter sales reflected the pull forward of seasonal activity into the first quarter. But we saw continued demand for core products and delivered second-quarter earnings above our expectations," said Frank Blake, chairman & CEO. "I would like to thank our associates for their hard work and commitment to our customers."

Updated Fiscal 2012 Guidance

The Company confirmed that it expects fiscal 2012 sales will be up approximately 4.6 percent from the prior year on a 53-week basis. Based on its year-to-date performance, the Company raised its fiscal 2012 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 19 percent to $2.95 for the year. This earnings-per-share guidance includes the benefit of the Company's year-to-date share repurchases and the Company's intent to repurchase $1.4 billion in additional shares over the remainder of 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 second quarter, the Company operated a total of 2,255 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, Mexico and China. 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.

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 stock repurchase programs, net earnings performance, earnings per share, capital allocation and expenditures, liquidity, return on invested capital, management of our purchasing or customer credit policies, 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 SIX MONTHS ENDED JULY 29, 2012 AND JULY 31, 2011 (Unaudited) (Amounts in Millions Except Per Share Data and as Otherwise Noted)

Three Months Ended

Six Months Ended

July 29, 2012

July 31, 2011

% Increase

(Decrease)

July 29,

2012

July 31,

2011

% Increase (Decrease)

NET SALES

$

20,570

$

20,232

1.7

%

$

38,378

$

37,055

3.6

%

Cost of Sales

13,544

13,356

1.4

25,169

24,351

3.4

GROSS PROFIT

7,026

6,876

2.2

13,209

12,704

4.0

 

Operating Expenses:

Selling, General and Administrative

4,066

4,186

(2.9)

8,152

8,195

(0.5)

Depreciation and Amortization

391

396

(1.3)

774

793

(2.4)

Total Operating Expenses

4,457

4,582

(2.7)

8,926

8,988

(0.7)

 

OPERATING INCOME

 

2,569

2,294

12.0

4,283

3,716

15.3

Interest and Other (Income) Expense:

Interest and Investment Income

(4)

(3)

33.3

(9)

(5)

80.0

Interest Expense

155

149

4.0

311

290

7.2

Other

(67)

N/A

Interest and Other, net

151

146

3.4

235

285

(17.5)

 

EARNINGS BEFORE PROVISION FOR

INCOME TAXES

 

2,418

2,148

12.6

4,048

3,431

18.0

Provision for Income Taxes

886

785

12.9

1,481

1,256

17.9

NET EARNINGS

$

1,532

$

1,363

12.4

%

$

2,567

$

2,175

18.0

%

Weighted Average Common Shares

1,501

1,568

(4.3)

%

1,513

1,585

(4.5)

%

BASIC EARNINGS PER SHARE

$

1.02

$

0.87

17.2

$

1.70

$

1.37

24.1

Diluted Weighted Average Common Shares

1,512

1,577

(4.1)

%

1,525

1,595

(4.4)

%

DILUTED EARNINGS PER SHARE

$

1.01

$

0.86

17.4

$

1.68

$

1.36

23.5

Three Months Ended

Six Months Ended

SELECTED HIGHLIGHTS

July 29, 2012

July 31, 2011

% Increase

(Decrease)

July 29,

2012

July 31,

2011

% Increase

(Decrease)

Number of Customer Transactions

374.9

372.7

0.6

%

703.9

689.2

2.1

%

Average Ticket (actual)

$

55.02

$

54.04

1.8

$

54.78

$

53.72

2.0

Weighted Average Weekly Sales per

Operating Store (in thousands)

$

704

$

690

2.0

$

658

$

634

3.8

Square Footage at End of Period

236

235

0.4

236

235

0.4

Capital Expenditures

$

323

$

270

19.6

$

551

$

469

17.5

Depreciation and Amortization (1)

$

423

$

425

(0.5)

%

$

833

$

849

(1.9)

%

(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 BALANCE SHEETS AS OF JULY 29, 2012, JULY 31, 2011 AND JANUARY 29, 2012 (Unaudited) (Amounts in Millions)

July 29, 2012

July 31, 2011

January 29, 2012

ASSETS

Cash and Cash Equivalents

$

2,810

$

2,551

$

1,987

Receivables, net

1,505

1,332

1,245

Merchandise Inventories

10,910

10,756

10,325

Other Current Assets

1,006

1,218

963

Total Current Assets

16,231

15,857

14,520

 

Property and Equipment, net

24,154

24,798

24,448

Goodwill

1,157

1,177

1,120

Other Assets

441

445

430

TOTAL ASSETS

$

41,983

$

42,277

$

40,518

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts Payable

$

6,137

$

5,890

$

4,856

Accrued Salaries and Related Expenses

1,370

1,262

1,372

Current Installments of Long-Term Debt

34

44

30

Other Current Liabilities

3,693

3,751

3,118

Total Current Liabilities

11,234

10,947

9,376

 

Long-Term Debt

10,771

10,731

10,758

Other Long-Term Liabilities

2,344

2,366

2,486

Total Liabilities

24,349

24,044

22,620

 

Total Stockholders' Equity

17,634

18,233

17,898

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

41,983

$

42,277

$

40,518

 

THE HOME DEPOT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JULY 29, 2012 AND JULY 31, 2011 (Unaudited) (Amounts in Millions)

Six Months Ended

July 29, 2012

July 31, 2011

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Earnings

$

2,567

$

2,175

Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:

Depreciation and Amortization

833

849

Stock-Based Compensation Expense

107

108

Changes in Working Capital and Other

754

1,355

Net Cash Provided by Operating Activities

4,261

4,487

 

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital Expenditures

(551)

(469)

Payment for Business Acquired, net

(45)

Proceeds from Sales of Property and Equipment

15

27

Net Cash Used in Investing Activities

(581)

(442)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from Long-Term Borrowings, net of discount

1,994

Repayments of Long-Term Debt

(16)

(1,014)

Repurchases of Common Stock

(2,630)

(2,251)

Proceeds from Sales of Common Stock

553

83

Cash Dividends Paid to Stockholders

(880)

(798)

Other

122

(54)

Net Cash Used in Financing Activities

(2,851)

(2,040)

 

Change in Cash and Cash Equivalents

 

829

2,005

Effect of Exchange Rate Changes on Cash and Cash Equivalents

(6)

1

Cash and Cash Equivalents at the Beginning of the Period

1,987

545

 

Cash and Cash Equivalents at the End of the Period

$

2,810

$

2,551

 

 

SOURCE The Home Depot



RELATED LINKS

http://www.homedepot.com