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

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



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ATLANTA, May 15,
2012 /PRNewswire-HISPANIC PR WIRE/ — The Home Depot®, the world’s
largest home improvement retailer, today reported sales of $17.8 billion for the
first quarter of fiscal 2012, a 5.9 percent increase from the first quarter of
fiscal 2011. Comparable store sales for the first quarter of fiscal 2012 were
positive 5.8 percent, and comp sales for U.S. stores were positive 6.1 percent.

 


(Logo:

photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO
 )

 

Net earnings for
the first quarter were $1.0 billion, or $0.68 per diluted share, compared with
net earnings of $812 million, or $0.50 per diluted share, in the same period of
fiscal 2011. For the first quarter of fiscal 2012, diluted earnings per share
increased 36.0 percent from the same period in the prior year.  

 

First quarter of
fiscal 2012 results reflect a benefit to earnings, net of tax, of $43 million,
or $0.03 per diluted share, related to the termination of the Company’s
guarantee of a senior secured loan.

 

“We saw a
stronger-than-expected start to the year, driven by record warm weather and
continued demand for core products,” said Frank Blake, chairman & CEO. “I would
like to thank our associates for their hard work and dedication.”


 


Updated Fiscal 2012 Guidance

 

Based on its
year-to-date performance, the Company updated its fiscal 2012 guidance and now
expects sales to be up approximately 4.6 percent for the year on a 53-week
basis. The Company raised its fiscal 2012 diluted earnings-per-share guidance
and now expects diluted earnings per share to be up approximately 17 percent to
$2.90 for the year. This earnings-per-share guidance includes the $0.03 per
diluted share benefit related to the termination of the Company’s guarantee of a
senior secured loan, the benefit of the Company’s year-to-date share repurchases
and the Company’s intent to repurchase $2.4 billion in additional shares over
the remainder of the year.

 

On June 6 at 9 a.m.
ET, the Company will hold its Investor and Analyst Conference to update the
investment community on the long range outlook of the business. All
presentations will be webcast live at

ir.homedepot.com
in the Events & Presentations section.

 

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 2,254 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.


 


To provide clarity, internally and externally, about the Company’s
operating performance for recently completed fiscal periods, the Company
supplemented its reporting with non-GAAP financial measures to reflect the
impact of the benefit related to the termination 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 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
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
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 ability to issue debt on terms and at rates acceptable to us, store openings
and closures, expense leverage, guidance for fiscal 2012 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.


 


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 ENDED APRIL 29, 2012 AND MAY 1, 2011

(Unaudited)


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

 

 

 

 

 


Three Months Ended

 

 

 


April 29,



2012

 


May 1,



2011

 


% Increase


(Decrease)


NET
SALES

$

17,808

 

$

16,823

 

5.9%

Cost of
Sales

11,625

 

10,995

 

5.7


GROSS
PROFIT

6,183

 

5,828

 

6.1


Operating Expenses:

 

 

 

 

 


Selling, General and Administrative

4,086

 

4,009

 

1.9


Depreciation and Amortization

383

 

397

 

(3.5)

Total
Operating Expenses

4,469

 

4,406

 

1.4



OPERATING INCOME

1,714

 

1,422

 

20.5


Interest and Other (Income) Expense:

 

 

 

 

 


Interest and Investment Income

(5)

 

(2)

 

150.0


Interest Expense

156

 

141

 

10.6

Other

(67)

 

 

N/A   


Interest and Other, net

84

 

139

 

(39.6)



EARNINGS BEFORE PROVISION FOR INCOME TAXES

1,630

 

1,283

 

27.0


Provision for Income Taxes

595

 

471

 

26.3

 

 

 

 

 

 


NET
EARNINGS

$

1,035

 

$

812

 

27.5%

 

 

 

 

 

 


Weighted Average Common Shares

1,522

 

1,599

 

(4.8)%


BASIC
EARNINGS PER SHARE

$

0.68

 

$

0.51

 

33.3

 

 

 

 

 

 

Diluted
Weighted Average Common Shares

1,531

 

1,611

 

(5.0)%


DILUTED
EARNINGS PER SHARE

$

0.68

 

$

0.50

 

36.0

 

 

 

 

 

 

 


Three Months Ended

 

 



SELECTED HIGHLIGHTS


April 29,



2012

 


May 1,



2011

 


% Increase


(Decrease)

Number
of Customer Transactions

328.9

 

316.5

 

3.9%

Average
Ticket (actual)

$

54.51

 

$

53.35

 

2.2


Weighted Average Weekly Sales per Operating Store (in thousands)

$

612

 

$

578

 

5.9

Square
Footage at End of Period

236

 

235

 

0.4

Capital
Expenditures

$

228

 

$

199

 

14.6


Depreciation and Amortization (1)

$

410

 

$

424

 

(3.3)%

 

 

 

 

 

 

 

 

—————

(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 APRIL 29, 2012 AND MAY 1, 2011

(Unaudited)


(Amounts in Millions Except Per Share Data)

 

 

 


Three Months Ended April 29, 2012

 


Actuals

 


Adjustment(1)

 

As
Adjusted


(Non-GAAP)


Operating Income

$

1,714

 

$

 

$

1,714


Interest and Other, net

84

 

(67)

 

151

Net
Earnings

$

1,035

 

$

43

 

$

992

Diluted
Earnings Per Share

$

0.68

 

$

0.03

 

$

0.65

 

 

 

 

 

 

 


Three Months Ended May 1, 2011

 


Actuals

 


Adjustment

 

As
Adjusted


(Non-GAAP)


Operating Income

$

1,422

 

$

 

$

1,422


Interest and Other, net

139

 

 

139

Net
Earnings

$

812

 

$

 

$

812

Diluted
Earnings Per Share

$

0.50

 

$

 

$

0.50

 

 

 

 

 

 

 

 

 

—————

(1) The Company recognized a benefit in the first quarter of fiscal 2012
resulting from the termination of its guarantee of the HD Supply senior
secured loan.

 

 

THE
HOME DEPOT, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS

AS
OF APRIL 29, 2012, MAY 1, 2011 AND JANUARY 29, 2012

(Unaudited)


(Amounts in Millions)

 

 

 

 

 

 

 


April 29,



2012

 


May 1,



2011

 


January 29,



2012


ASSETS

 

 

 

 

 

Cash
and Cash Equivalents

$

3,191

 

 

$

1,806

 

 

$

1,987

 


Receivables, net

1,519

 

 

1,456

 

 

1,245

 


Merchandise Inventories

11,582

 

 

11,694

 

 

10,325

 

Other
Current Assets

1,060

 

 

1,205

 

 

963

 

Total
Current Assets

17,352

 

 

16,161

 

 

14,520

 


Property and Equipment, net

24,371

 

 

24,993

 

 

24,448

 


Goodwill

1,139

 

 

1,209

 

 

1,120

 

Other
Assets

438

 

 

434

 

 

430

 


TOTAL
ASSETS

$

43,300

 

 

$

42,797

 

 

$

40,518

 

 

 

 

 

 

 



LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 


Accounts Payable

$

7,135

 

 

$

6,543

 

 

$

4,856

 

Accrued
Salaries and Related Expenses

1,263

 

 

1,195

 

 

1,372

 

Current
Installments of Long-Term Debt

33

 

 

43

 

 

30

 

Other
Current Liabilities

3,668

 

 

3,677

 

 

3,118

 

Total
Current Liabilities

12,099

 

 

11,458

 

 

9,376

 


Long-Term Debt

10,792

 

 

10,720

 

 

10,758

 

Other
Long-Term Liabilities

2,434

 

 

2,421

 

 

2,486

 

Total
Liabilities

25,325

 

 

24,599

 

 

22,620

 

Total
Stockholders’ Equity

17,975

 

 

18,198

 

 

17,898

 


TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY

$

43,300

 

 

$

42,797

 

 

$

40,518

 

 

 

THE
HOME DEPOT, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR
THE THREE MONTHS ENDED APRIL 29, 2012 AND MAY 1, 2011

(Unaudited)


(Amounts in Millions)

 

 

 

 


Three Months Ended

 


April 29,



2012

 


May 1,



2011


CASH
FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net
Earnings

$

1,035

 

$

812


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

 

 

 


Depreciation and Amortization

410

 

424


Stock-Based Compensation Expense

58

 

60

Changes
in Working Capital and Other

987

 

802

Net
Cash Provided by Operating Activities

2,490

 

2,098


CASH
FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Capital
Expenditures

(228)

 

(199)

Other

7

 

15

Net
Cash Used in Investing Activities

(221)

 

(184)


CASH
FLOWS FROM FINANCING ACTIVITIES:

 

 

 


Proceeds from Long-Term Borrowings, net of discount

 

1,994


Repayments of Long-Term Debt

(7)

 

(1,007)


Repurchases of Common Stock

(1,131)

 

(1,301)


Proceeds from Sales of Common Stock

412

 

34

Cash
Dividends Paid to Stockholders

(444)

 

(403)

Other

87

 

19

Net
Cash Used in Financing Activities

(1,083)

 

(664)

Change
in Cash and Cash Equivalents

1,186

 

1,250

Effect
of Exchange Rate Changes on Cash and Cash Equivalents

18

 

11

Cash
and Cash Equivalents at the Beginning of the Period

1,987

 

545

Cash
and Cash Equivalents at the End of the Period

$

3,191

 

$

1,806

 

SOURCE  The Home Depot

 

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