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Press release from PR Newswire

The Home Depot Announces Fourth Quarter and Fiscal 2012 Results; Announces $17 Billion Share Repurchase Authorization; Increases Quarterly Dividend by 34 Percent and Provides Fiscal Year 2013 Guidance

Tuesday, February 26, 2013

The Home Depot Announces Fourth Quarter and Fiscal 2012 Results; Announces $17 Billion Share Repurchase Authorization; Increases Quarterly Dividend by 34 Percent and Provides Fiscal Year 2013 Guidance06:00 EST Tuesday, February 26, 2013ATLANTA, Feb. 26, 2013 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $18.2 billion for the fourth quarter of fiscal 2012, a 13.9 percent increase from the fourth quarter of fiscal 2011. Comparable store sales for the fourth quarter of fiscal 2012 increased 7.0 percent, and comp sales for U.S. stores were 7.1 percent.(Logo: )The fourth quarter of fiscal 2012 consisted of 14 weeks compared with 13 weeks for the prior year.  The 14th week added approximately $1.2 billion in sales for the quarter and the year. Excluding the 14th week, fourth quarter sales increased by 6.3 percent compared to the fourth quarter of fiscal 2011.  The additional week is not included in comparable store sales results for the quarter or the year.  Net earnings for the fourth quarter were $1.0 billion, or $0.68 per diluted share, compared with net earnings of $774 million, or $0.50 per diluted share, in the same period of fiscal 2011. These results reflect a favorable adjustment to a previously announced China store closing charge of approximately $20 million, net of tax, or $0.01 per diluted share. The 14th week increased earnings per diluted share by approximately $0.07 for the quarter and the year.Fiscal 2012Sales for fiscal 2012 were $74.8 billion, an increase of 6.2 percent from fiscal 2011. Total company comparable store sales for the year increased 4.6 percent, and comp sales for U.S. stores were 4.9 percent for the year. Excluding the 53rd week, sales for fiscal 2012 increased by 4.5 percent from fiscal 2011.Earnings per diluted share in fiscal 2012 were $3.00, compared to $2.47 per diluted share in fiscal 2011, an increase of 21.5 percent. These results reflect a nonrecurring charge of approximately $145 million, net of tax, or $0.10 per diluted share, associated with the China store closings. On an adjusted basis, earnings per diluted share in fiscal 2012 were $3.10, compared to $2.47 per diluted share in fiscal 2011, an increase of 25.5 percent."We ended the year with a strong performance as our business benefited from a continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy," said Frank Blake, chairman & CEO. "I'd like to thank our associates for their hard work and dedication."Capital Allocation StrategyThe Company today announced that its board of directors declared a 34 percent increase in its quarterly dividend to $0.39 cents per share. "The board increased the dividend for the fourth time in as many years. In line with our targeted dividend payout of 50 percent, the dividend increase is a testament to our commitment to create value for our shareholders," said Blake. The dividend is payable on March 28, 2013, to shareholders of record on the close of business on March 14, 2013. This is the 104th consecutive quarter the Company has paid a cash dividend.The board of directors also authorized a $17.0 billion share repurchase program replacing its previous authorization. Since 2002 and through February 3, 2013, the Company has returned more than $37.5 billion of cash to shareholders through repurchases, repurchasing approximately 1 billion shares.Combined with today's announcements, the Company reiterated its capital allocation principles:Dividend Principle: Targeting a dividend payout ratio of approximately 50 percent. Share Repurchase Principle: After meeting the needs of the business, will use excess cash to repurchase shares, with the intent of completing $17.0 billion of share repurchases by the end of fiscal 2015. Return on Invested Capital Principle: Maintain a high return on invested capital, with a goal of reaching 24 percent by the end of fiscal 2015.Fiscal 2013 Guidance The Company provided the following guidance for fiscal 2013, a 52-week year compared to fiscal 2012, a 53-week year:Sales growth of approximately 2 percent Comparable store sales growth of approximately 3 percent Nine new stores Moderate gross margin expansion Operating margin expansion of approximately 65 basis points Tax rate of approximately 37 percent Share repurchases of approximately $4.5 billion Diluted earnings-per-share growth after anticipated share repurchases of approximately 12 percent to $3.37 Capital spending of approximately $1.5 billion Depreciation and amortization expense of approximately $1.7 billion Cash flow from the business of approximately $7.2 billionThe 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 At the end of the fourth quarter, the Company operated a total of 2,256 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.To provide clarity, internally and externally, about the Company's operating performance for recently completed fiscal periods, the Company has supplemented its reporting with non-GAAP financial measures to reflect the impact of the closing of seven stores in China. 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 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 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 FISCAL YEARS ENDED FEBRUARY 3, 2013 AND JANUARY 29, 2012 (Unaudited)(Amounts in Millions Except Per Share Data and as Otherwise Noted)Three Months Ended(1)% Increase(Decrease)Fiscal Year Ended(2)% Increase(Decrease)February 3, 2013January 29, 2012February 3, 2013January 29, 2012NET SALES$18,246$16,01413.9%$74,754$70,3956.2%Cost of Sales11,88010,41714.048,91246,1336.0GROSS PROFIT6,3665,59713.725,84224,2626.5Operating Expenses:Selling, General and Administrative4,2173,8778.816,50816,0283.0Depreciation and Amortization3993902.31,5681,573(0.3)Total Operating Expenses4,6164,2678.218,07617,6012.7OPERATING INCOME1,7501,33031.67,7666,66116.6Interest and Other (Income) Expense:Interest and Investment Income(6)(4)50.0(20)(13)53.8Interest Expense1661547.86326064.3Other???(67)?N/AInterest and Other, net1601506.7545593(8.1)EARNINGS BEFORE PROVISION FOR INCOME TAXES1,5901,18034.77,2216,06819.0Provision for Income Taxes56940640.12,6862,18522.9NET EARNINGS$1,021$77431.9%$4,535$3,88316.8%Weighted Average Common Shares1,4791,525(3.0)%1,4991,562(4.0)%BASIC EARNINGS PER SHARE$0.69$0.5135.3$3.03$2.4921.7Diluted Weighted Average Common Shares1,4911,535(2.9)%1,5111,570(3.8)%DILUTED EARNINGS PER SHARE$0.68$0.5036.0$3.00$2.4721.5Three Months Ended(1)% Increase(Decrease)Fiscal Year Ended(2)% Increase(Decrease)SELECTED HIGHLIGHTSFebruary 3, 2013January 29, 2012February 3, 2013January 29, 2012Number of Customer Transactions329.1303.08.6%1,364.01,317.53.5%Average Ticket (actual)$55.46$52.545.6$54.89$53.283.0Weighted Average Weekly Sales     per Operating Store (in thousands)$580$5446.6$627$6014.3Square Footage at End of Period235235?235235?Capital Expenditures$425$4016.0$1,312$1,2217.5Depreciation and Amortization(3)$427$4172.4%$1,684$1,6820.1%(1)  Three months ended February 3, 2013 includes 14 weeks. Three months ended January 29, 2012 includes 13 weeks.(2)  Fiscal year ended February 3, 2013 includes 53 weeks. Fiscal year ended January 29, 2012 includes 52 weeks.(3)  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 STATEMENTS OF EARNINGS ITEMS EXCLUDING CERTAIN ADJUSTMENTS (NON-GAAP)FOR THE THREE MONTHS AND FISCAL YEAR ENDED FEBRUARY 3, 2013(Unaudited)(Amounts in Millions Except Per Share Data)Three Months Ended February 3, 2013(1)ActualsChina Store Closings(3)As Adjusted (Non-GAAP)Gross Profit$6,366$?$6,366Total Operating Expenses4,616(20)4,636Operating Income1,750201,730Net Earnings1,021201,001Diluted Earnings Per Share$0.68$0.01$0.67Fiscal Year Ended February 3, 2013(2)ActualsChina Store Closings(3)As Adjusted (Non-GAAP)Gross Profit$25,842$(10)$25,852Total Operating Expenses18,07613517,941Operating Income7,766(145)7,911Net Earnings4,535(145)4,680Diluted Earnings Per Share$3.00$(0.10)$3.10(1)  Three months ended February 3, 2013 includes 14 weeks.(2)  Fiscal year ended February 3, 2013 includes 53 weeks.(3)  Adjustments are related to the closing of seven stores in China.   THE HOME DEPOT, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF FEBRUARY 3, 2013 AND JANUARY 29, 2012 (Unaudited)(Amounts in Millions)February 3, 2013January 29, 2012ASSETSCash and Cash Equivalents$2,494$1,987Receivables, net1,3951,245Merchandise Inventories10,71010,325Other Current Assets773963Total Current Assets15,37214,520Property and Equipment, net24,06924,448Goodwill1,1701,120Other Assets473430TOTAL ASSETS$41,084$40,518LIABILITIES AND STOCKHOLDERS' EQUITYAccounts Payable$5,376$4,856Accrued Salaries and Related Expenses1,4141,372Current Installments of Long-Term Debt1,32130Other Current Liabilities3,3513,118Total Current Liabilities11,4629,376Long-Term Debt9,47510,758Other Long-Term Liabilities2,3702,486Total Liabilities23,30722,620Total Stockholders' Equity17,77717,898TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$41,084$40,518   THE HOME DEPOT, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR FISCAL YEARS ENDED FEBRUARY 3, 2013 AND JANUARY 29, 2012 (Unaudited)(Amounts in Millions)Fiscal Year Ended(1)February 3, 2013January 29, 2012CASH FLOWS FROM OPERATING ACTIVITIES:Net Earnings$4,535$3,883Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:Depreciation and Amortization1,6841,682Stock-Based Compensation Expense218215Changes in Working Capital and Other538871Net Cash Provided by Operating Activities6,9756,651CASH FLOWS FROM INVESTING ACTIVITIES:Capital Expenditures(1,312)(1,221)Payments for Businesses Acquired, net(170)(65)Proceeds from Sale of Business, net?101Proceeds from Sales of Property and Equipment5056Net Cash Used in Investing Activities(1,432)(1,129)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from Long-Term Borrowings, net of discount?1,994Repayments of Long-Term Debt(32)(1,028)Repurchases of Common Stock(3,984)(3,470)Proceeds from Sales of Common Stock784306Cash Dividends Paid to Stockholders(1,743)(1,632)Other(59)(218)Net Cash Used in Financing Activities(5,034)(4,048)Change in Cash and Cash Equivalents5091,474Effect of Exchange Rate Changes on Cash and Cash Equivalents(2)(32)Cash and Cash Equivalents at the Beginning of the Period1,987545Cash and Cash Equivalents at the End of the Period$2,494$1,987(1)  Fiscal year ended February 3, 2013 includes 53 weeks. Fiscal year ended January 29, 2012 includes 52 weeks. SOURCE The Home DepotFor further information: Financial Community, Diane Dayhoff, Vice President of Investor Relations, +1-770-384-2666, ; News Media, Paula Drake, Director of Corporate Communications, +1-770-384-3439,