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Press release from PR Newswire

The Home Depot Announces Second Quarter Results; Updates Fiscal Year 2014 Guidance

Tuesday, August 19, 2014

The Home Depot Announces Second Quarter Results; Updates Fiscal Year 2014 Guidance

06:00 EDT Tuesday, August 19, 2014

ATLANTA, Aug. 19, 2014 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $23.8 billion for the second quarter of fiscal 2014, a 5.7 percent increase from the second quarter of fiscal 2013. Comparable store sales for the second quarter of fiscal 2014 were positive 5.8 percent, and comp sales for U.S. stores were positive 6.4 percent.

Net earnings for the second quarter were $2.1 billion, or $1.52 per diluted share, compared with net earnings of $1.8 billion, or $1.24 per diluted share, in the same period of fiscal 2013. For the second quarter of fiscal 2014, diluted earnings per share increased 22.6 percent from the same period in the prior year.

"In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies," said Frank Blake, chairman and CEO. "I would like to thank our associates for their hard work and dedication, especially at this time of increased demand."

Updated Fiscal 2014 Guidance

The Company confirmed that it expects fiscal 2014 sales will be up approximately 4.8 percent from fiscal 2013. Based on its second quarter performance and its outlook for the year, the Company raised its fiscal 2014 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 20.2 percent to $4.52 for the year. This earnings-per-share guidance includes the benefit of the Company's year-to-date share repurchases of $3.5 billion and the Company's intent to repurchase an additional $3.5 billion of 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 2,264 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.

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; effects of competition; 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; implementation of store, interconnected retail and supply chain initiatives; management of relationships with our suppliers and vendors; continuation of share repurchase programs; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the effect of accounting charges; the effect of adopting certain accounting standards; store openings and closures; guidance for fiscal 2014 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 February 2, 2014 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 SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

FOR THE THREE AND SIX MONTHS ENDED AUGUST 3, 2014 AND AUGUST 4, 2013

(Unaudited)

(Amounts in Millions Except Per Share Data and as Otherwise Noted)

Three Months Ended

Six Months Ended

August 3, 2014

August 4, 2013

% Increase

(Decrease)

August 3,

2014

August 4,

2013

% Increase(Decrease)

NET SALES

$

23,811

$

22,522

5.7

%

$

43,498

$

41,646

4.4

%

Cost of Sales

15,650

14,801

5.7

28,452

27,246

4.4

GROSS PROFIT

8,161

7,721

5.7

15,046

14,400

4.5

 

Operating Expenses:

Selling, General and Administrative

4,298

4,294

0.1

8,492

8,477

0.2

Depreciation and Amortization

415

409

1.5

829

811

2.2

Total Operating Expenses

4,713

4,703

0.2

9,321

9,288

0.4

OPERATING INCOME

3,448

3,018

14.2

5,725

5,112

12.0

Interest and Other (Income) Expense:

Interest and Investment Income

(17)

(2)

N/M

(117)

(5)

N/M

Interest Expense

208

174

19.5

399

338

18.0

Interest and Other, net

191

172

11.0

282

333

(15.3)

EARNINGS BEFORE PROVISION FOR

INCOME TAXES

3,257

2,846

14.4

5,443

4,779

13.9

Provision for Income Taxes

1,207

1,051

14.8

2,014

1,758

14.6

NET EARNINGS

$

2,050

$

1,795

14.2

%

$

3,429

$

3,021

13.5

%

Weighted Average Common Shares

1,346

1,434

(6.1)

%

1,358

1,452

(6.5)

%

BASIC EARNINGS PER SHARE

$

1.52

$

1.25

21.6

$

2.53

$

2.08

21.6

Diluted Weighted Average Common Shares

1,353

1,443

(6.2)

%

1,365

1,462

(6.6)

%

DILUTED EARNINGS PER SHARE

$

1.52

$

1.24

22.6

$

2.51

$

2.07

21.3

Three Months Ended

Six Months Ended

SELECTED HIGHLIGHTS

August 3, 2014

August 4, 2013

% Increase

(Decrease)

August 3,

2014

August 4,

2013

% Increase

(Decrease)

Number of Customer Transactions

409.7

393.2

4.2

%

754.2

730.3

3.3

%

Average Ticket (actual)

$

58.43

$

57.39

1.8

$

58.05

$

57.32

1.3

Sales per Square Foot (actual)

$

403.90

$

382.99

5.5

$

368.92

$

355.56

3.8

N/M ? Not Meaningful

 

 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF AUGUST 3, 2014, AUGUST 4, 2013 AND FEBRUARY 2, 2014

(Unaudited)

(Amounts in Millions)

August 3, 2014

August 4, 2013

February 2, 2014

ASSETS

Cash and Cash Equivalents

$

4,216

$

3,419

$

1,929

Receivables, net

1,637

1,542

1,398

Merchandise Inventories

11,665

11,086

11,057

Other Current Assets

973

848

895

Total Current Assets

18,491

16,895

15,279

 

Property and Equipment, net

23,126

23,650

23,348

Goodwill

1,295

1,170

1,289

Other Assets

567

477

602

TOTAL ASSETS

$

43,479

$

42,192

$

40,518

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts Payable

$

7,165

$

6,585

$

5,797

Accrued Salaries and Related Expenses

1,325

1,423

1,428

Current Installments of Long-Term Debt

34

1,308

33

Other Current Liabilities

4,315

3,679

3,491

Total Current Liabilities

12,839

12,995

10,749

 

Long-Term Debt, excluding current installments

16,702

11,450

14,691

Other Long-Term Liabilities

2,481

2,269

2,556

Total Liabilities

32,022

26,714

27,996

 

Total Stockholders' Equity

11,457

15,478

12,522

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

43,479

$

42,192

$

40,518

 

 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED AUGUST 3, 2014 AND AUGUST 4, 2013

(Unaudited)

(Amounts in Millions)

Six Months Ended

August 3, 2014

August 4, 2013

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Earnings

$

3,429

$

3,021

Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:

Depreciation and Amortization

896

877

Stock-Based Compensation Expense

119

116

Changes in Working Capital and Other

953

704

Net Cash Provided by Operating Activities

5,397

4,718

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital Expenditures

(631)

(599)

Payments for Business Acquired, net

?

(13)

Proceeds from Sales of Property and Equipment

16

16

Net Cash Used in Investing Activities

(615)

(596)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from Long-Term Borrowings, net of discount

1,981

1,994

Repayments of Long-Term Debt

(21)

(17)

Repurchases of Common Stock

(3,500)

(4,346)

Proceeds from Sales of Common Stock

148

150

Cash Dividends Paid to Stockholders

(1,285)

(1,143)

Other Financing Activities

181

154

Net Cash Used in Financing Activities

(2,496)

(3,208)

 

Change in Cash and Cash Equivalents

 

2,286

914

Effect of Exchange Rate Changes on Cash and Cash Equivalents

1

11

Cash and Cash Equivalents at Beginning of Period

1,929

2,494

 

Cash and Cash Equivalents at End of Period

$

4,216

$

3,419

 

 

The Home Depot logo.

Logo - http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO

SOURCE The Home Depot

For further information: Financial Community: Diane Dayhoff, Vice President of Investor Relations, 770-384-2666, diane_dayhoff@homedepot.com; News Media: Stephen Holmes, Director of Corporate Communications, 770-384-5075, stephen_holmes@homedepot.com

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