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Press release from CNW Group

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

Tuesday, August 16, 2011

The Home Depot Announces Second Quarter Results; Updates Fiscal Year 2011 Guidance06:01 EDT Tuesday, August 16, 2011 << >>ATLANTA, Aug. 16, 2011 /CNW/ -- 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. << (Logo: http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO ) >>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. << >> << 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 7-31-11 8-1-10 (Decrease) ------- ------ ---------- NET SALES $20,232 $19,410 4.2% Cost of Sales 13,356 12,828 4.1 ------ ------ GROSS PROFIT 6,876 6,582 4.5 >> << Operating Expenses: Selling, General and Administrative 4,186 4,127 1.4 Depreciation and Amortization 396 406 (2.5) --- --- Total Operating Expenses 4,582 4,533 1.1 ----- ----- >> OPERATING INCOME 2,294 2,049 12.0 << Interest and Other (Income) Expense: Interest and Investment Income (3) (3) - Interest Expense 149 151 (1.3) Other - - - --- --- Interest and Other, net 146 148 (1.4) --- --- >> << EARNINGS BEFORE PROVISION FOR INCOME TAXES 2,148 1,901 13.0 >>Provision for Income Taxes 785 709 10.7 << NET EARNINGS $1,363 $1,192 14.3% ====== ====== >>Weighted Average Common Shares 1,568 1,653 (5.1)%BASIC EARNINGS PER SHARE $0.87 $0.72 20.8 << Diluted Weighted Average Common Shares 1,577 1,663 (5.2)% >>DILUTED EARNINGS PER SHARE $0.86 $0.72 19.4 << Three Months % SELECTED HIGHLIGHTS Ended Increase ------------------- 7-31-11 8-1-10 (Decrease) ------- ------ ---------- Number of Customer Transactions 373 369 1.1% Average Ticket (actual) $54.04 $52.30 3.3 Weighted Average Weekly Sales per Operating Store (in thousands) $690 $662 4.2 Square Footage at End of Period 235 235 - Capital Expenditures $270 $240 12.5 Depreciation and Amortization (1) $425 $428 (0.7)% >> << Six Months % Ended Increase 7-31-11 8-1-10 (Decrease) ------- ------ NET SALES $37,055 $36,273 2.2% Cost of Sales 24,351 23,897 1.9 ------ ------ GROSS PROFIT 12,704 12,376 2.7 >> << Operating Expenses: Selling, General and Administrative 8,195 8,205 (0.1) Depreciation and Amortization 793 817 (2.9) --- --- Total Operating Expenses 8,988 9,022 (0.4) ----- ----- >> OPERATING INCOME 3,716 3,354 10.8 << Interest and Other (Income) Expense: Interest and Investment Income (5) (7) (28.6) Interest Expense 290 293 (1.0) Other - 51 (100.0) --- --- Interest and Other, net 285 337 (15.4) --- --- >> << EARNINGS BEFORE PROVISION FOR INCOME TAXES 3,431 3,017 13.7 >>Provision for Income Taxes 1,256 1,100 14.2 << NET EARNINGS $2,175 $1,917 13.5% ====== ====== >>Weighted Average Common Shares 1,585 1,666 (4.9)%BASIC EARNINGS PER SHARE $1.37 $1.15 19.1 << Diluted Weighted Average Common Shares 1,595 1,676 (4.8)% >>DILUTED EARNINGS PER SHARE $1.36 $1.14 19.3 << Six Months % SELECTED HIGHLIGHTS Ended Increase ------------------- 7-31-11 8-1-10 (Decrease) ------- ------ Number of Customer Transactions 689 692 (0.4)% Average Ticket (actual) $53.72 $52.41 2.5 Weighted Average Weekly Sales per Operating Store (in thousands) $634 $621 2.1 Square Footage at End of Period 235 235 - Capital Expenditures $469 $407 15.2 Depreciation and Amortization (1) $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 ====== ====== >>For further information: Financial Community, Diane Dayhoff, Vice President of Investor Relations, +1-770-384-2666, diane_dayhoff@homedepot.com; or News Media, Ron DeFeo, Senior Director of Corporate Communications, +1-770-384-3179, ron_defeo@homedepot.com Web Site: http://www.homedepot.com