The Home Depot Announces First Quarter Results; Updates Fiscal Year 2010 Guidance

ATLANTA, May 18 /PRNewswire-FirstCall/ -- The Home Depot®, the world's largest home improvement retailer, today reported first quarter of fiscal 2010 net earnings of $725 million, or $0.43 per diluted share, compared with net earnings of $514 million, or $0.30 per diluted share, in the same period of fiscal 2009.  

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Sales for the first quarter totaled $16.9 billion, a 4.3 percent increase from the first quarter of fiscal 2009. Comparable store sales for the first quarter were positive 4.8 percent, and comp sales for U.S. stores were positive 3.3 percent. On an adjusted basis, which excludes the impact of sales related to the closing of the Company's EXPO businesses in the first quarter of fiscal 2009, sales increased 5.7 percent.

First quarter of fiscal 2010 results reflect a net impact to earnings of $33 million related to the extension of the Company's guarantee of a third-party senior secured loan. In the first quarter of fiscal 2009, the Company's reported results included a net impact to earnings of $73 million related to the closing of its EXPO businesses. On an adjusted basis, the Company reported first quarter of fiscal 2010 net earnings of $758 million, or $0.45 per diluted share, compared with adjusted net earnings of $587 million, or $0.35 per diluted share, in the same period of fiscal 2009.

"Our solid start to the year was driven by great performance in seasonal categories and strong growth in customer transactions," said Frank Blake, chairman & CEO. "I want to thank our associates for their hard work and dedication, as our customer service scores also showed marked year over year improvement. It is their efforts that enabled us to deliver these results."

Updated Fiscal 2010 Guidance

Based on its year-to-date performance, the Company updated its fiscal 2010 guidance and now expects sales to be up approximately 3.5 percent for the year. The Company expects diluted earnings per share from continuing operations as reported to increase by approximately 21 percent to $1.88 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 first quarter, the Company operated a total of 2,244 retail stores, which included 1,976 The Home Depot stores in the United States (including the Commonwealth of Puerto Rico, the territory of the U.S. Virgin Islands and the territory of Guam), 179 stores in Canada, 79 stores in Mexico and 10 stores in 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.

To provide clarity, internally and externally, about the Company's operating performance for the recently completed fiscal quarter, the Company supplemented its reporting with non-GAAP financial measures to reflect the impact of the store rationalization charges, business rationalization charges, related restructuring charges and the charge related to the extension of the Company's guarantee of a third-party senior secured loan.  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.  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 corresponding GAAP measures can be found in the attached press release and at 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, commodity price inflation and deflation, implementation of store initiatives, continuation of reinvestment plans, net earnings performance, earnings per share, stock-based compensation expense, capital allocation and expenditures, liquidity, the effect of adopting certain accounting standards, return on invested capital, management of our purchasing or customer credit policies, the effect of accounting charges, the planned recapitalization of the Company, timing of the completion of the recapitalization, the ability to issue debt securities on terms and at rates acceptable to us,  store openings and closures and financial outlook.  Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You are cautioned not to place undue reliance 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 31, 2010.

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.

SOURCE The Home Depot