The Home Depot Announces Second Quarter Results; Raises Fiscal Year 2013 Guidance

The Home Depot Announces Second Quarter Results; Raises Fiscal Year 2013 Guidance



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ATLANTA, Aug. 20, 2013 /PRNewswire/ — The Home Depot®, the world’s largest home improvement retailer, today reported sales of $22.5 billion for the second quarter of fiscal 2013. On a like for like basis, comparable store sales for the second quarter of fiscal 2013 were positive 10.7 percent, and comp sales for U.S. stores were positive 11.4 percent. Total sales increased 9.5 percent from the second quarter of fiscal 2012. Due to the 14th week in the fourth quarter of fiscal 2012, second quarter sales were impacted by a calendar timing change that resulted in one less week of spring sales in the second quarter when compared to the same period of fiscal 2012.
This shift reduced total sales growth by approximately $249 million or 120 basis points.

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

Net earnings for the second quarter were $1.8 billion, or $1.24 per diluted share, compared with net earnings of $1.5 billion, or $1.01 per diluted share, in the same period of fiscal 2012. For the second quarter of fiscal 2013, diluted earnings per share increased 22.8 percent from the same period in the prior year.

“The second quarter results exceeded our expectations as our business benefited from a rebound in our seasonal categories, continued strength in the core of the store and the recovering housing market in the U.S.,” said Frank Blake, chairman & CEO. “Our associates did an outstanding job of responding
to the strong increased demand. I would like to thank them for their hard work and dedication.”

Updated Fiscal 2013 Guidance

Based on its year-to-date performance and outlook for the balance of the year, the Company raised its fiscal 2013 sales guidance and now expects sales to be up approximately 4.5 percent with comparable store sales up approximately 6.0 percent for the year. The Company raised its fiscal 2013 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 20 percent to $3.60 for the year. The Company’s fiscal 2013 sales and earnings-per-share guidance is based on a 52-week year compared to fiscal 2012, a 53-week year.

This earnings-per-share guidance includes the benefit of the Company’s year-to-date share repurchases totaling $4.3 billion and the Company’s intent to repurchase $2.2
billion of 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 2,258 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 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 share repurchase programs, net earnings performance, earnings per share, capital allocation and expenditures, liquidity, return on invested capital, management of relationships with our suppliers and vendors, 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 2013 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 February 3, 2013 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 AND SIX MONTHS ENDED AUGUST 4, 2013 AND JULY 29, 2012

(Unaudited)

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

 

 

Three Months Ended

     

Six Months Ended

   
 

August 4,

2013

 

July 29,

2012

 

% Increase

(Decrease)

 

August 4,

2013

 

July 29,

2012

 

% Increase

(Decrease)

NET SALES

$

22,522

   

$

20,570

   

9.5

%

 

$

41,646

   

$

38,378

   

8.5

%

Cost of Sales

14,801

   

13,544

   

9.3

   

27,246

   

25,169

   

8.3

 

GROSS PROFIT

7,721

   

7,026

   

9.9

   

14,400

   

13,209

   

9.0

 

Operating Expenses:

                     

Selling, General and Administrative

4,294

   

4,066

   

5.6

   

8,477

   

8,152

   

4.0

 

Depreciation and Amortization

409

   

391

   

4.6

   

811

   

774

   

4.8

 

   Total Operating Expenses

4,703

   

4,457

   

5.5

   

9,288

   

8,926

   

4.1

 

OPERATING INCOME

3,018

   

2,569

   

17.5

   

5,112

   

4,283

   

19.4

 

Interest and Other (Income) Expense:

                     

Interest and Investment Income

(2)

   

(4)

   

(50.0)

   

(5)

   

(9)

   

(44.4)

 

Interest Expense

174

   

155

   

12.3

   

338

   

311

   

8.7

 

Other

   

   

   

   

(67)

   

(100.0)

 

   Interest and Other, net

172

   

151

   

13.9

   

333

   

235

   

41.7

 

EARNINGS BEFORE PROVISION FOR

INCOME TAXES

2,846

   

2,418

   

17.7

   

4,779

   

4,048

   

18.1

 

Provision for Income Taxes

1,051

   

886

   

18.6

   

1,758

   

1,481

   

18.7

 
                       

NET EARNINGS

$

1,795

   

$

1,532

   

17.2

%

 

$

3,021

   

$

2,567

   

17.7

%

                       

Weighted Average Common Shares

1,434

   

1,501

   

(4.5)

%

 

1,452

   

1,513

   

(4.0)

%

BASIC EARNINGS PER SHARE

$

1.25

   

$

1.02

   

22.5

   

$

2.08

   

$

1.70

   

22.4

 
                       

Diluted Weighted Average Common Shares

1,443

   

1,512

   

(4.6)

%

 

1,462

   

1,525

   

(4.1)

%

DILUTED EARNINGS PER SHARE

$

1.24

   

$

1.01

   

22.8

   

$

2.07

   

$

1.68

   

23.2

 
                       
 

Three Months Ended

     

Six Months Ended

   

SELECTED HIGHLIGHTS

August 4,

2013

 

July 29,

2012

% Increase

(Decrease)

August 4,

2013

 

July 29,

2012

 

% Increase

(Decrease)

Number of Customer Transactions

393.2

   

374.9

   

4.9

%

 

730.3

   

703.9

   

3.8

%

Average Ticket (actual)

$

57.39

   

$

55.02

   

4.3

   

$

57.32

   

$

54.78

   

4.6

 

Weighted Average Weekly Sales per

Operating Store (in thousands)

$

768

   

$

704

   

9.1

   

$

713

   

$

658

   

8.4

 

Square Footage at End of Period

235

   

236

   

(0.4)

   

235

   

236

   

(0.4)

 

Capital Expenditures

$

321

   

$

323

   

(0.6)

   

$

599

   

$

551

   

8.7

 

Depreciation and Amortization (1)

$

442

   

$

423

   

4.5

%

 

$

877

   

$

833

   

5.3

%

—————

(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.

 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF AUGUST 4, 2013, JULY 29, 2012 AND FEBRUARY 3, 2013

(Unaudited)

(Amounts in Millions)

 

 

August 4,

2013

 

July 29,

2012

 

February 3,

2013

ASSETS

         

Cash and Cash Equivalents

$

3,419

   

$

2,810

   

$

2,494

 

Receivables, net

1,542

   

1,505

   

1,395

 

Merchandise Inventories

11,086

   

10,910

   

10,710

 

Other Current Assets

848

   

1,006

   

773

 

   Total Current Assets

16,895

   

16,231

   

15,372

 

Property and Equipment, net

23,650

   

24,154

   

24,069

 

Goodwill

1,170

   

1,157

   

1,170

 

Other Assets

477

   

441

   

473

 

   TOTAL ASSETS

$

42,192

   

$

41,983

   

$

41,084

 
           

LIABILITIES AND STOCKHOLDERS’ EQUITY

         

Accounts Payable

$

6,585

   

$

6,137

   

$

5,376

 

Accrued Salaries and Related Expenses

1,423

   

1,370

   

1,414

 

Current Installments of Long-Term Debt

1,308

   

34

   

1,321

 

Other Current Liabilities

3,679

   

3,693

   

3,351

 

   Total Current Liabilities

12,995

   

11,234

   

11,462

 

Long-Term Debt, excluding current installments

11,450

   

10,771

   

9,475

 

Other Long-Term Liabilities

2,269

   

2,344

   

2,370

 

   Total Liabilities

26,714

   

24,349

   

23,307

 

Total Stockholders’ Equity

15,478

   

17,634

   

17,777

 

   TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

42,192

   

$

41,983

   

$

41,084

 

 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED AUGUST 4, 2013 AND JULY 29, 2012

(Unaudited)

(Amounts in Millions)

 

 

Six Months Ended

 

August 4,

2013

 

July 29,

2012

CASH FLOWS FROM OPERATING ACTIVITIES:

     

Net Earnings

$

3,021

   

$

2,567

 

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

     

Depreciation and Amortization

877

   

833

 

Stock-Based Compensation Expense

116

   

107

 

Changes in Working Capital and Other

704

   

754

 

Net Cash Provided by Operating Activities

4,718

   

4,261

 

CASH FLOWS FROM INVESTING ACTIVITIES:

     

Capital Expenditures

(599)

   

(551)

 

Payments for Businesses Acquired, net

(13)

   

(45)

 

Proceeds from Sales of Property and Equipment

16

   

15

 

Net Cash Used in Investing Activities

(596)

   

(581)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

     

Proceeds from Long-Term Borrowings, net of discount

1,994

   

 

Repayments of Long-Term Debt

(17)

   

(16)

 

Repurchases of Common Stock

(4,346)

   

(2,630)

 

Proceeds from Sales of Common Stock

150

   

553

 

Cash Dividends Paid to Stockholders

(1,143)

   

(880)

 

Other

154

   

122

 

Net Cash Used in Financing Activities

(3,208)

   

(2,851)

 

Change in Cash and Cash Equivalents

914

   

829

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

11

   

(6)

 

Cash and Cash Equivalents at the Beginning of the Period

2,494

   

1,987

 

Cash and Cash Equivalents at the End of the Period

$

3,419

   

$

2,810

 

 

SOURCE  The Home Depot

The Home Depot Announces Second Quarter Results; Raises Fiscal Year 2013 Guidance