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8-K - FORM 8-K - HOME DEPOT INCd8k.htm
LOGO   Exhibit 99.1
 

THE HOME DEPOT ANNOUNCES SECOND QUARTER RESULTS;

UPDATES FISCAL YEAR 2011 GUIDANCE

ATLANTA, August 16, 2011 — The Home Depot®, the world’s largest home improvement retailer, today reported second quarter of fiscal 2011 net earnings of $1.4 billion, or $0.86 per diluted share, compared with net earnings of $1.2 billion, or $0.72 per diluted share, in the same period of fiscal 2010. For the second quarter of fiscal 2011, diluted earnings per share increased 19.4 percent from the prior year.

Sales for the second quarter totaled $20.2 billion, a 4.2 percent increase from the second quarter of fiscal 2010. Comparable store sales for the second quarter were positive 4.3 percent, and comp sales for U.S. stores were positive 3.5 percent.

“Our second-quarter results were driven by a rebound in our seasonal business, storm-related repairs and strength in our core categories,” said Frank Blake, chairman & CEO. “We continue to deliver a strong operating performance while also investing in customer service and our merchandising initiatives. I would like to thank our associates for their hard work and dedication. It is their efforts that enabled us to deliver these results.”

Updated Fiscal 2011 Guidance

The Company confirmed that it expects fiscal 2011 sales will be up approximately 2.5 percent from fiscal 2010. Based on its year-to-date performance and outlook for the balance of the year, the Company raised its fiscal 2011 diluted earnings-per-share guidance and now expects diluted earnings-per-share from continuing operations to be up approximately 16 percent to $2.34 for the year. This earnings-per-share guidance includes the benefit of the Company’s year-to-date share repurchases, but excludes the impact of future share repurchases.

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 2,245 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 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 and the timing of its completion, the ability to issue debt on terms and at rates acceptable to us, store openings and closures, expense leverage, fiscal 2011 guidance 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 30, 2011, and in Part II, Item 1A, “Risk Factors” and elsewhere in our Quarterly Report on Form 10-Q for the fiscal quarter ended May 1, 2011.

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.

 

For more information, contact:   
Financial Community    News Media
Diane Dayhoff    Ron DeFeo
Vice President of Investor Relations    Senior Director of Corporate Communications
770-384-2666    770-384-3179
diane_dayhoff@homedepot.com    ron_defeo@homedepot.com


THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 31, 2011 AND AUGUST 1, 2010

(Unaudited)

(Amounts in Millions Except Per Share Data and as Otherwise Noted)

 

     Three Months Ended     % Increase     Six Months Ended     % Increase  
     7-31-11     8-1-10     (Decrease)     7-31-11     8-1-10     (Decrease)  

NET SALES

   $ 20,232      $ 19,410        4.2   $ 37,055      $ 36,273        2.2

Cost of Sales

     13,356        12,828        4.1        24,351        23,897        1.9   
  

 

 

   

 

 

     

 

 

   

 

 

   

GROSS PROFIT

     6,876        6,582        4.5        12,704        12,376        2.7   

Operating Expenses:

            

Selling, General and Administrative

     4,186        4,127        1.4        8,195        8,205        (0.1

Depreciation and Amortization

     396        406        (2.5     793        817        (2.9
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Operating Expenses

     4,582        4,533        1.1        8,988        9,022        (0.4
  

 

 

   

 

 

     

 

 

   

 

 

   

OPERATING INCOME

     2,294        2,049        12.0        3,716        3,354        10.8   

Interest and Other (Income) Expense:

            

Interest and Investment Income

     (3     (3     —          (5     (7     (28.6

Interest Expense

     149        151        (1.3     290        293        (1.0

Other

     —          —          —          —          51        (100.0
  

 

 

   

 

 

     

 

 

   

 

 

   

Interest and Other, net

     146        148        (1.4     285        337        (15.4
  

 

 

   

 

 

     

 

 

   

 

 

   

EARNINGS BEFORE PROVISION FOR INCOME TAXES

     2,148        1,901        13.0        3,431        3,017        13.7   

Provision for Income Taxes

     785        709        10.7        1,256        1,100        14.2   
  

 

 

   

 

 

     

 

 

   

 

 

   

NET EARNINGS

   $ 1,363      $ 1,192        14.3   $ 2,175      $ 1,917        13.5
  

 

 

   

 

 

     

 

 

   

 

 

   

Weighted Average Common Shares

     1,568        1,653        (5.1 )%      1,585        1,666        (4.9 )% 

BASIC EARNINGS PER SHARE

   $ 0.87      $ 0.72        20.8      $ 1.37      $ 1.15        19.1   

Diluted Weighted Average Common Shares

     1,577        1,663        (5.2 )%      1,595        1,676        (4.8 )% 

DILUTED EARNINGS PER SHARE

   $ 0.86      $ 0.72        19.4      $ 1.36      $ 1.14        19.3   

SELECTED HIGHLIGHTS

   Three Months Ended     % Increase     Six Months Ended     % Increase  
     7-31-11     8-1-10     (Decrease)     7-31-11     8-1-10     (Decrease)  

Number of Customer Transactions

     373        369        1.1     689        692        (0.4 )% 

Average Ticket (actual)

   $ 54.04      $ 52.30        3.3      $ 53.72      $ 52.41        2.5   

Weighted Average Weekly Sales per Operating Store (in thousands)

   $ 690      $ 662        4.2      $ 634      $ 621        2.1   

Square Footage at End of Period

     235        235        —          235        235        —     

Capital Expenditures

   $ 270      $ 240        12.5      $ 469      $ 407        15.2   

Depreciation and Amortization (1)

   $ 425      $ 428        (0.7 )%    $ 849      $ 866        (2.0 )% 

 

(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.


THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JULY 31, 2011, AUGUST 1, 2010 AND JANUARY 30, 2011

(Unaudited)

(Amounts in Millions)

 

     7-31-11      8-1-10      1-30-11  

ASSETS

        

Cash and Cash Equivalents

   $ 2,551       $ 2,395       $ 545   

Receivables, net

     1,332         1,218         1,085   

Merchandise Inventories

     10,756         10,759         10,625   

Other Current Assets

     1,218         1,385         1,224   
  

 

 

    

 

 

    

 

 

 

Total Current Assets

     15,857         15,757         13,479   
  

 

 

    

 

 

    

 

 

 

Property and Equipment, net

     24,798         25,190         25,060   

Goodwill

     1,177         1,187         1,187   

Other Assets

     445         401         399   
  

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

   $ 42,277       $ 42,535       $ 40,125   
  

 

 

    

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

        

Accounts Payable

   $ 5,890       $ 5,919       $ 4,717   

Accrued Salaries and Related Expenses

     1,262         1,226         1,290   

Current Installments of Long-Term Debt

     44         2,022         1,042   

Other Current Liabilities

     3,751         3,572         3,073   
  

 

 

    

 

 

    

 

 

 

Total Current Liabilities

     10,947         12,739         10,122   
  

 

 

    

 

 

    

 

 

 

Long-Term Debt

     10,731         7,727         8,707   

Other Long-Term Liabilities

     2,366         2,624         2,407   
  

 

 

    

 

 

    

 

 

 

Total Liabilities

     24,044         23,090         21,236   
  

 

 

    

 

 

    

 

 

 

Total Stockholders’ Equity

     18,233         19,445         18,889   
  

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 42,277       $ 42,535       $ 40,125   
  

 

 

    

 

 

    

 

 

 


THE HOME DEPOT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JULY 31, 2011 AND AUGUST 1, 2010

(Unaudited)

(Amounts in Millions)

 

     Six Months Ended  
     7-31-11     8-1-10  

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net Earnings

   $ 2,175      $ 1,917   

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

    

Depreciation and Amortization

     849        866   

Stock-Based Compensation Expense

     108        112   

Changes in Working Capital and Other

     1,355        468   
  

 

 

   

 

 

 

Net Cash Provided by Operating Activities

     4,487        3,363   
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Capital Expenditures

     (469     (407

Other

     27        44   
  

 

 

   

 

 

 

Net Cash Used in Investing Activities

     (442     (363
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Proceeds from Long-Term Borrowings, net of discount

     1,994        —     

Repayments of Long-Term Debt

     (1,014     (17

Repurchases of Common Stock

     (2,251     (1,209

Cash Dividends Paid to Stockholders

     (798     (793

Other

     29        (11
  

 

 

   

 

 

 

Net Cash Used in Financing Activities

     (2,040     (2,030
  

 

 

   

 

 

 

Change in Cash and Cash Equivalents

     2,005        970   

Effect of Exchange Rate Changes on Cash and Cash Equivalents

     1        4   

Cash and Cash Equivalents at the Beginning of the Period

     545        1,421   
  

 

 

   

 

 

 

Cash and Cash Equivalents at the End of the Period

   $ 2,551      $ 2,395