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2010-11-16T12:42:00Z
2010-11-16T12:42:00Z
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SAVVIS Communications
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ATLANTA Nov. 16, 2010
/PRNewswire-HISPANIC PR WIRE/ — The Home Depot® (NYSE: HD), the
world’s largest home improvement retailer, today reported third quarter of
fiscal 2010 net earnings of $834 million, or $0.51 per diluted share, compared
with net earnings of $689 million, or $0.41 per diluted share, in the same
period of fiscal 2009.
Sales for the third quarter
totaled $16.6 billion, a 1.4 percent increase from the third quarter of fiscal
2009. Comparable store sales for the third quarter of fiscal 2010 were positive
1.4 percent, and comp sales for U.S. stores were positive 1.5 percent.
“Our third quarter sales reflect
the fourth consecutive quarter of positive same store sales for our business.
As the business stabilizes, we continue to improve our operational performance.
We are exercising good control over our expenses but we’re also investing in
the business to drive improvements across customer service, merchandising and
our supply chain,” said Frank Blake, chairman & CEO. “I want to thank our
associates for their hard work and dedication.”
Based on its year-to-date
performance and expectations for the remainder of the fiscal year, the Company
updated its fiscal 2010 guidance and now expects sales to be up approximately
2.2 percent for the year. The Company expects diluted earnings per share from
continuing operations as reported to increase by approximately 25 percent to
$1.94 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.
On December 8 at 9 a.m. ET, the Company will hold
its Investor and Analyst Conference to update the investment community on key
areas 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 third 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, 80 stores in Mexico and 9 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 recently
completed fiscal periods, 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 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, 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, and in Part II, Item 1A, “Risk Factors” and elsewhere in our
Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 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.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR
THE THREE MONTHS AND NINE MONTHS ENDED OCTOBER 31, 2010 AND
NOVEMBER 1, 2009
(Unaudited)
(Amounts
in Millions Except Per Share Data and as Otherwise Noted)
Three Months
Ended % Increase
10-31-10 11-1-09
(Decrease)
——– ——- ———-
NET SALES $16,598
$16,361 1.4%
Cost of Sales 10,913
10,800 1.0
—— ——
GROSS
PROFIT 5,685 5,561 2.2
Operating
Expenses:
Selling,
General
and
Administrative
3,837 3,870 (0.9)
Depreciation and
Amortization
400 428 (6.5)
— —
Total
Operating
Expenses
4,237 4,298 (1.4)
—– —–
OPERATING
INCOME 1,448 1,263 14.6
Interest and
Other
(Income)
Expense:
Interest
and
Investment
Income
(4) (4) –
Interest
Expense 146 168 (13.1)
Other – – –
— —
Interest
and
Other,
net 142 164 (13.4)
— —
EARNINGS BEFORE
PROVISION
FOR
INCOME
TAXES 1,306 1,099 18.8
Provision for
Income
Taxes 472 410 15.1
— —
NET
EARNINGS $834 $689 21.0%
==== ====
Weighted Average
Common
Shares 1,637 1,682 (2.7)%
BASIC EARNINGS
PER
SHARE $0.51 $0.41 24.4
Diluted Weighted
Average
Common
Shares 1,646 1,693 (2.8)%
DILUTED EARNINGS
PER
SHARE $0.51 $0.41 24.4
SELECTED Three Months
HIGHLIGHTS
Ended % Increase
———–
10-31-10 11-1-09 (Decrease)
——– ——-
———-
Number of
Customer
Transactions
322 314 2.5%
Average Ticket
(actual)
$51.47 $51.89 (0.8)
Weighted Average
Weekly Sales
per
Operating
Store
(in
thousands)
$567 $558 1.6
Square Footage at
End of
Period 235 235 –
Capital
Expenditures
$282 $215 31.2
Depreciation and
Amortization
(1) $426 $453 (6.0)%
Nine Months %
Ended Increase
10-31-10 11-1-09
(Decrease)
——– ——-
———-
NET SALES $52,871
$51,607 2.4%
Cost of Sales 34,810
34,208 1.8
—— ——
GROSS
PROFIT 18,061 17,399 3.8
Operating
Expenses:
Selling,
General
and
Administrative
12,042 12,033 0.1
Depreciation and
Amortization
1,217 1,290 (5.7)
—– —–
Total
Operating
Expenses
13,259 13,323 (0.5)
—— ——
OPERATING
INCOME 4,802 4,076 17.8
Interest and
Other
(Income)
Expense:
Interest
and
Investment
Income
(11) (15) (26.7)
Interest
Expense 439 515 (14.8)
Other 51 – N/M
— —
Interest
and
Other,
net 479 500 (4.2)
— —
EARNINGS BEFORE
PROVISION
FOR
INCOME
TAXES 4,323 3,576 20.9
Provision for
Income
Taxes 1,572 1,257 25.1
—– —–
NET
EARNINGS $2,751 $2,319 18.6%
====== ======
Weighted Average
Common
Shares 1,657 1,684 (1.6)%
BASIC EARNINGS
PER
SHARE $1.66 $1.38 20.3
Diluted Weighted
Average
Common
Shares 1,667 1,692 (1.5)%
DILUTED EARNINGS
PER
SHARE $1.65 $1.37 20.4
SELECTED Nine Months %
HIGHLIGHTS
Ended Increase
———–
10-31-10 11-1-09
(Decrease)
——– ——-
———-
Number of
Customer
Transactions
1,013 986 2.7%
Average Ticket
(actual)
$52.11 $52.27 (0.3)
Weighted Average
Weekly Sales
per
Operating
Store
(in
thousands)
$603 $586 2.9
Square Footage at
End of
Period 235 235 –
Capital
Expenditures
$689 $568 21.3
Depreciation and
Amortization
(1) $1,292 $1,364 (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.
N/M – Not Meaningful
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS ITEMS EXCLUDING CERTAIN
ADJUSTMENTS (NON-GAAP)
FOR THE
THREE MONTHS AND NINE MONTHS ENDED OCTOBER 31, 2010 AND
NOVEMBER 1, 2009
(Unaudited)
(Amounts in Millions Except Per Share Data)
Three Months Ended
10-31-10
As
Actuals Adjustment Adjusted
——- ———- ——–
(Non-
GAAP)
—–
Net
Sales $16,598 $- $16,598
Gross
Profit 5,685 – 5,685
Total
Operating
Expenses 4,237 – 4,237
Operating
Income 1,448 – 1,448
Interest
and
Other,
net 142 –
142
Net
Earnings $834 $- $834
Diluted
Earnings
Per
Share $0.51 $-
$0.51
Three Months Ended 11-1-09
————————–
As
Actuals Adjustments(2) Adjusted
——- ————– ———
(Non-
GAAP)
—–
Net
Sales $16,361 $- $16,361
Gross
Profit 5,561 – 5,561
Total
Operating
Expenses 4,298 9 4,289
Operating
Income 1,263 (9) 1,272
Interest
and
Other,
net 164 –
164
Net
Earnings $689 $(6)
$695
Diluted
Earnings
Per
Share $0.41 $-
$0.41
Nine Months Ended 10-31-10
As
Actuals Adjustment(1) Adjusted
——- ————- ——–
(Non-
GAAP)
—–
Net
Sales $52,871 $- $52,871
Gross
Profit 18,061 – 18,061
Total
Operating
Expenses 13,259 – 13,259
Operating
Income 4,802 –
4,802
Interest
and
Other,
net 479 51
428
Net
Earnings $2,751 $(33) $2,784
Diluted
Earnings
Per
Share $1.65 $(0.02) $1.67
Nine Months Ended 11-1-09
————————-
As
Actuals Adjustments(2) Adjusted
——- ————– ———
(Non-
GAAP)
—–
Net Sales $51,607 $221
$51,386
Gross
Profit 17,399 28 17,371
Total
Operating
Expenses 13,323 174 13,149
Operating
Income 4,076 (146) 4,222
Interest
and
Other,
net 500 –
500
Net
Earnings $2,319 $(90) $2,409
Diluted
Earnings
Per
Share $1.37 $(0.05)
$1.42
(1) Adjustment is comprised of a charge related to
the extension of
the
Company’s guarantee of a third-party senior secured loan.
(2) Adjustments are comprised of store
rationalization charges
related to
the closing of 15 stores and the removal of 50 stores
from our
future growth pipeline, business rationalization charges
related to
the exit of EXPO, THD Design Center, Yardbirds and HD
Bath
businesses, as well as net sales, gross profit and operating
expenses of
those exited businesses during the period from closing
announcement
to actual closing, and charges related to restructuring
of support
functions.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF
OCTOBER 31, 2010, NOVEMBER 1, 2009 AND JANUARY 31, 2010
(Unaudited)
(Amounts in Millions)
10-31-10 11-1-09 1-31-10
——– ——- ——-
ASSETS
Cash and
Cash Equivalents
$1,425 $2,719 $1,421
Receivables, net 1,295
1,188 964
Merchandise Inventories
10,993 10,817 10,188
Other
Current Assets 1,363 1,175
1,327
Total
Current Assets
15,076 15,899 13,900
—— ——
——
Property
and Equipment, net
25,050 25,581 25,550
Goodwill
1,180 1,163 1,171
Other
Assets
435 407 256
TOTAL
ASSETS $41,741
$43,050 $40,877
======= ======= =======
LIABILITIES
AND STOCKHOLDERS’ EQUITY
Accounts
Payable
$5,714 $5,829 $4,863
Accrued
Salaries and Related Expenses
1,168 1,069 1,263
Current
Installments of Long-Term Debt
1,023 1,769 1,020
Other
Current Liabilities 3,455
3,788 3,217
Total
Current Liabilities
11,360 12,455 10,363
—— ——
——
Long-Term
Debt
8,752 8,656 8,662
Other
Long-Term Liabilities
2,514 2,559 2,459
Total
Liabilities
22,626 23,670 21,484
—— ——
——
Total
Stockholders’ Equity
19,115 19,380 19,393
TOTAL LIABILITIES
AND STOCKHOLDERS’
EQUITY
$41,741 $43,050 $40,877
======= ======= =======
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE
NINE MONTHS ENDED OCTOBER 31, 2010 AND NOVEMBER 1, 2009
(Unaudited)
(Amounts in Millions)
Nine
Months
Ended
10-31-10 11-1-09
——– ——-
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings $2,751 $2,319
Reconciliation of Net Earnings to Net Cash
Provided by
Operating Activities:
Depreciation and Amortization 1,292
1,364
Stock-Based Compensation Expense
161 160
Changes
in Working Capital and Other
(218) 821
Net Cash
Provided by Operating Activities
3,986 4,664
—– —–
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (689) (568)
Other 65 183
Net Cash
Used in Investing Activities
(624) (385)
—- —-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Long-Term Borrowings, net of
discount 998 –
Repayments of Long-Term Debt (1,023)
(1,015)
Repurchases of Common Stock (1,974) (98)
Cash Dividends Paid to Stockholders (1,184) (1,144)
Other (183) 158
Net Cash
Used in Financing Activities
(3,366) (2,099)
—— ——
(Decrease) Increase in Cash and Cash
Equivalents (4) 2,180
Effect of Exchange Rate Changes on Cash and Cash
Equivalents 8 20
Cash and Cash Equivalents at the Beginning of the
Period
1,421 519
—–
—
Cash and Cash Equivalents at the End of the
Period
$1,425 $2,719
====== ======
SOURCE The Home Depot
