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Press release from CNW Group

The Home Depot Announces First Quarter Results; Updates Fiscal Year 2011 Guidance

Tuesday, May 17, 2011

The Home Depot Announces First Quarter Results; Updates Fiscal Year 2011 Guidance06:01 EDT Tuesday, May 17, 2011 << >>ATLANTA, May 17, 2011 /CNW/ -- The Home Depot®, the world's largest home improvement retailer, today reported first quarter of fiscal 2011 net earnings of $812 million, or $0.50 per diluted share, compared with net earnings of $725 million, or $0.43 per diluted share, in the same period of fiscal 2010. For the first quarter of fiscal 2011, diluted earnings per share increased 16.3 percent from the prior year. << (Logo: http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO ) >>Sales for the first quarter totaled $16.8 billion, a 0.2 percent decrease from the first quarter of fiscal 2010. Comparable store sales for the first quarter were negative 0.6 percent, and comp sales for U.S. stores were negative 0.7 percent."We continued to improve our business and delivered double-digit earnings growth," said Frank Blake, chairman & CEO. "Our sales declined slightly due to a slow spring selling season, but for the year we expect sales to grow in line with the guidance we previously provided. We will maintain our focus on providing great customer service and product and project values. I would like to thank our associates for their hard work and dedication." << 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, the Company raised its fiscal 2011 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 11.4 percent to $2.24 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 first 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.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 a prior year charge related to the extension of the Company's guarantee of the HD Supply 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 http://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 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.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 MAY 1, 2011 AND MAY 2, 2010 (Unaudited) (Amounts in Millions Except Per Share Data and as Otherwise Noted) >> << Three Months % Ended Increase 5-1-11 5-2-10 (Decrease) ------ ------ ---------- NET SALES $16,823 $16,863 (0.2)% Cost of Sales 10,995 11,069 (0.7) ------ ------ GROSS PROFIT 5,828 5,794 0.6 >> << Operating Expenses: Selling, General and Administrative 4,009 4,078 (1.7) Depreciation and Amortization 397 411 (3.4) --- --- Total Operating Expenses 4,406 4,489 (1.8) ----- >> OPERATING INCOME 1,422 1,305 9.0 << Interest and Other (Income) Expense: Interest and Investment Income (2) (4) (50.0) Interest Expense 141 142 (0.7) Other - 51 (100.0) --- --- Interest and Other, net 139 189 (26.5) --- --- >> << EARNINGS BEFORE PROVISION FOR INCOME TAXES 1,283 1,116 15.0 >>Provision for Income Taxes 471 391 20.5 << NET EARNINGS $812 $725 12.0 % ==== ==== >> << Weighted Average Common Shares 1,599 1,677 (4.7) % BASIC EARNINGS PER SHARE $0.51 $0.43 18.6 >> << Diluted Weighted Average Common Shares 1,611 1,688 (4.6) % DILUTED EARNINGS PER SHARE $0.50 $0.43 16.3 >> << Three Months % SELECTED HIGHLIGHTS Ended Increase ------------------- 5-1-11 5-2-10 (Decrease) ------ ------ ---------- Number of Customer Transactions 317 323 (1.9)% Average Ticket (actual) $53.35 $52.54 1.5 Weighted Average Weekly Sales per Operating Store (in thousands) $578 $581 (0.5) Square Footage at End of Period 235 235 - Capital Expenditures $199 $167 19.2 Depreciation and Amortization (1) $424 $438 (3.2)% >>_________________________ << (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 STATEMENTS OF EARNINGS ITEMS EXCLUDING CERTAIN ADJUSTMENTS (NON-GAAP) FOR THE THREE MONTHS ENDED MAY 1, 2011 AND MAY 2, 2010 (Unaudited) (Amounts in Millions Except Per Share Data) >> << Three Months Ended 5-1-11 ------------------------- 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 >> << Three Months Ended 5-2-10 ------------------------- Actuals Adjustment(1) As Adjusted ------- ------------- ----------- (Non-GAAP) ---------- >> Operating Income $1,305 $- $1,305 << Interest and Other, net 189 51 138 >> Net Earnings $725 $(33) $758 << Diluted Earnings Per Share $0.43 $(0.02) $0.45 >>_______________________ << (1) Adjustment is comprised of a charge related to the extension of the Company's guarantee of the HD Supply senior secured loan. >> << THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MAY 1, 2011, MAY 2, 2010 AND JANUARY 30, 2011 (Unaudited) (Amounts in Millions) >> << 5-1-11 5-2-10 1-30-11 ------ ------ ------- ASSETS Cash and Cash Equivalents $1,806 $2,436 $545 Receivables, net 1,456 1,342 1,085 Merchandise Inventories 11,694 11,479 10,625 Other Current Assets 1,205 1,389 1,224 ----- ----- ----- Total Current Assets 16,161 16,646 13,479 ------ ------ ------ >> << Property and Equipment, net 24,993 25,404 25,060 Goodwill 1,209 1,192 1,187 Other Assets 434 377 399 --- --- --- TOTAL ASSETS $42,797 $43,619 $40,125 ======= ======= ======= >> << LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable $6,543 $7,051 $4,717 Accrued Salaries and Related Expenses 1,195 1,154 1,290 Current Installments of Long-Term Debt 43 2,021 1,042 Other Current Liabilities 3,677 3,751 3,073 ----- ----- ----- Total Current Liabilities 11,458 13,977 10,122 ------ ------ ------ >> << Long-Term Debt 10,720 7,676 8,707 Other Long-Term Liabilities 2,421 2,595 2,407 ----- ----- ----- Total Liabilities 24,599 24,248 21,236 ------ ------ ------ >> << Total Stockholders' Equity 18,198 19,371 18,889 ------ ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $42,797 $43,619 $40,125 ======= ======= ======= >> << THE HOME DEPOT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MAY 1, 2011 AND MAY 2, 2010 (Unaudited) (Amounts in Millions) >> << Three Months Ended 5-1-11 5-2-10 ------ ------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $812 $725 Reconciliation of Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 424 438 Stock-Based Compensation Expense 60 64 Changes in Working Capital and Other 802 812 --- --- Net Cash Provided by Operating Activities 2,098 2,039 ----- ----- >> << CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures (199) (167) Other 15 27 --- --- Net Cash Used in Investing Activities (184) (140) ---- ---- >> << CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Long-Term Borrowings, net of discount 1,994 - Repayments of Long-Term Debt (1,007) (5) Repurchases of Common Stock (1,301) (508) Cash Dividends Paid to Stockholders (403) (399) Other 53 19 --- --- Net Cash Used in Financing Activities (664) (893) ---- ---- >>Change in Cash and Cash Equivalents 1,250 1,006 << Effect of Exchange Rate Changes on Cash and Cash Equivalents 11 9 Cash and Cash Equivalents at the Beginning of the Period 545 1,421 $1,806 $2,436 Cash and Cash Equivalents at the End of the Period ====== ====== >>For further information: Financial Community: Diane Dayhoff, Vice President of Investor Relations, 770-384-2666, diane_dayhoff@homedepot.com; News Media: Ron DeFeo, Senior Director of Corporate Communications, +1-770-384-3179, ron_defeo@homedepot.com Web Site: http://www.homedepot.com