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Press release from PR Newswire

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

Tuesday, August 14, 2012

The Home Depot Announces Second Quarter Results; Updates Fiscal Year 2012 Guidance06:00 EDT Tuesday, August 14, 2012ATLANTA, Aug. 14, 2012 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported second quarter of fiscal 2012 net earnings of  $1.5 billion, or $1.01 per diluted share, compared with net earnings of $1.4 billion, or $0.86 per diluted share, in the same period of fiscal 2011. For the second quarter of fiscal 2012, diluted earnings per share increased 17.4 percent from the same period in the prior year.  (Logo: http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO )Sales for the second quarter totaled $20.6 billion, a 1.7 percent increase from the second quarter of fiscal 2011. Comparable store sales for the second quarter of fiscal 2012 were positive 2.1 percent, and comp sales for U.S. stores were positive 2.6 percent."As expected, second-quarter sales reflected the pull forward of seasonal activity into the first quarter. But we saw continued demand for core products and delivered second-quarter earnings above our expectations," said Frank Blake, chairman & CEO. "I would like to thank our associates for their hard work and commitment to our customers."Updated Fiscal 2012 GuidanceThe Company confirmed that it expects fiscal 2012 sales will be up approximately 4.6 percent from the prior year on a 53-week basis. Based on its year-to-date performance, the Company raised its fiscal 2012 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 19 percent to $2.95 for the year. This earnings-per-share guidance includes the benefit of the Company's year-to-date share repurchases and the Company's intent to repurchase $1.4 billion in 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 2,255 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 stock repurchase programs, net earnings performance, earnings per share, capital allocation and expenditures, liquidity, return on invested capital, management of our purchasing or customer credit policies, 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 2012 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 January 29, 2012 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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF EARNINGSFOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 29, 2012 AND JULY 31, 2011 (Unaudited)(Amounts in Millions Except Per Share Data and as Otherwise Noted)Three Months EndedSix Months EndedJuly 29, 2012July 31, 2011% Increase(Decrease)July 29,2012July 31,2011% Increase(Decrease)NET SALES$20,570$20,2321.7%$38,378$37,0553.6%Cost of Sales13,54413,3561.425,16924,3513.4GROSS PROFIT7,0266,8762.213,20912,7044.0 Operating Expenses:Selling, General and Administrative4,0664,186(2.9)8,1528,195(0.5)Depreciation and Amortization391396(1.3)774793(2.4)Total Operating Expenses4,4574,582(2.7)8,9268,988(0.7) OPERATING INCOME 2,5692,29412.04,2833,71615.3Interest and Other (Income) Expense:Interest and Investment Income(4)(3)33.3(9)(5)80.0Interest Expense1551494.03112907.2Other???(67)?N/AInterest and Other, net1511463.4235285(17.5) EARNINGS BEFORE PROVISION FOR INCOME TAXES 2,4182,14812.64,0483,43118.0Provision for Income Taxes88678512.91,4811,25617.9NET EARNINGS$1,532$1,36312.4%$2,567$2,17518.0%Weighted Average Common Shares1,5011,568(4.3)%1,5131,585(4.5)%BASIC EARNINGS PER SHARE$1.02$0.8717.2$1.70$1.3724.1Diluted Weighted Average Common Shares1,5121,577(4.1)%1,5251,595(4.4)%DILUTED EARNINGS PER SHARE$1.01$0.8617.4$1.68$1.3623.5Three Months EndedSix Months EndedSELECTED HIGHLIGHTSJuly 29, 2012July 31, 2011% Increase(Decrease)July 29,2012July 31,2011% Increase(Decrease)Number of Customer Transactions374.9372.70.6%703.9689.22.1%Average Ticket (actual)$55.02$54.041.8$54.78$53.722.0Weighted Average Weekly Sales per Operating Store (in thousands)$704$6902.0$658$6343.8Square Footage at End of Period2362350.42362350.4Capital Expenditures$323$27019.6$551$46917.5Depreciation and Amortization (1)$423$425(0.5)%$833$849(1.9)%(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 SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF JULY 29, 2012, JULY 31, 2011 AND JANUARY 29, 2012 (Unaudited)(Amounts in Millions)July 29, 2012July 31, 2011January 29, 2012ASSETSCash and Cash Equivalents$2,810$2,551$1,987Receivables, net1,5051,3321,245Merchandise Inventories10,91010,75610,325Other Current Assets1,0061,218963Total Current Assets16,23115,85714,520 Property and Equipment, net24,15424,79824,448Goodwill1,1571,1771,120Other Assets441445430TOTAL ASSETS$41,983$42,277$40,518LIABILITIES AND STOCKHOLDERS' EQUITYAccounts Payable$6,137$5,890$4,856Accrued Salaries and Related Expenses1,3701,2621,372Current Installments of Long-Term Debt344430Other Current Liabilities3,6933,7513,118Total Current Liabilities11,23410,9479,376 Long-Term Debt10,77110,73110,758Other Long-Term Liabilities2,3442,3662,486Total Liabilities24,34924,04422,620 Total Stockholders' Equity17,63418,23317,898TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$41,983$42,277$40,518 THE HOME DEPOT, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED JULY 29, 2012 AND JULY 31, 2011 (Unaudited)(Amounts in Millions)Six Months EndedJuly 29, 2012July 31, 2011CASH FLOWS FROM OPERATING ACTIVITIES:Net Earnings$2,567$2,175Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:Depreciation and Amortization833849Stock-Based Compensation Expense107108Changes in Working Capital and Other7541,355Net Cash Provided by Operating Activities4,2614,487 CASH FLOWS FROM INVESTING ACTIVITIES:Capital Expenditures(551)(469)Payment for Business Acquired, net(45)?Proceeds from Sales of Property and Equipment1527Net Cash Used in Investing Activities(581)(442) CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from Long-Term Borrowings, net of discount?1,994Repayments of Long-Term Debt(16)(1,014)Repurchases of Common Stock(2,630)(2,251)Proceeds from Sales of Common Stock55383Cash Dividends Paid to Stockholders(880)(798)Other122(54)Net Cash Used in Financing Activities(2,851)(2,040) Change in Cash and Cash Equivalents 8292,005Effect of Exchange Rate Changes on Cash and Cash Equivalents(6)1Cash and Cash Equivalents at the Beginning of the Period1,987545 Cash and Cash Equivalents at the End of the Period$2,810$2,551  SOURCE The Home DepotFor further information: Financial Community: Diane Dayhoff, Vice President of Investor Relations, +1-770-384-2666, diane_dayhoff@homedepot.com; News Media: Paula Drake, Director of Corporate Communications, +1-770-384-3439, paula_drake@homedepot.com