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

Date : 11/13/2012 @ 4:30PM
Source : PR Newswire (US)
Stock : Home Depot (HD)
Quote : 91.87  0.24 (0.26%) @ 5:30AM
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The Home Depot Announces Third Quarter Results; Updates Fiscal Year 2012 Guidance

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

ATLANTA, Nov. 13, 2012 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $18.1 billion for the third quarter of fiscal 2012, a 4.6 percent increase from the third quarter of fiscal 2011. Comparable store sales for the third quarter of fiscal 2012 were positive 4.2 percent, and comp sales for U.S. stores were positive 4.3 percent.

(Logo: http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO)

Net earnings for the third quarter were $947 million, or $0.63 per diluted share, compared with net earnings of $934 million, or $0.60 per diluted share, in the same period of fiscal 2011. These results reflect a nonrecurring charge of approximately $165 million, net of tax, or $0.11 per diluted share due to the previously announced closing of seven stores in China. On an adjusted basis, the Company reported net earnings of $1.1 billion, or $0.74 per diluted share, a 23.3 percent increase from the same period in the prior year.

"Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market," said Frank Blake, chairman & CEO. "I particularly want to thank all of our associates who are helping the communities impacted by Hurricane Sandy. They are working under difficult circumstances, often with their own lives and homes disrupted by the storm, and their efforts exemplify our core values."                                                                                        

Updated Fiscal 2012 Guidance

Based on its performance through the third quarter, the Company updated its fiscal 2012 guidance and raised its sales growth guidance to be up approximately 5.2 percent for the year on a 53-week basis. The Company expects fiscal 2012 diluted earnings per share to be up approximately 18 percent to $2.92 for the year.

On an adjusted basis, the Company raised its diluted earnings per share growth guidance to be up approximately 23 percent to $3.03 excluding the $0.11 per diluted share impact related to the closing of seven stores in China.

This earnings-per-share guidance includes the benefit of the Company's year-to-date share repurchases and the Company's intent to repurchase $700 million in additional shares in the fourth quarter of fiscal 2012, which will bring the total dollar amount of shares repurchased to $4 billion for 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 third quarter, the Company operated a total of 2,250 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 charges related to 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 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 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 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 SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

FOR THE THREE MONTHS AND NINE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011

(Unaudited)

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

 


Three Months Ended




Nine Months Ended




October 28,
2012


October 30,
2011


% Increase

(Decrease)


October 28, 2012


October 30, 2011


% Increase
(Decrease)

NET SALES

$

18,130



$

17,326



4.6

%


$

56,508



$

54,381



3.9

%

Cost of Sales

11,863



11,365



4.4



37,032



35,716



3.7


GROSS PROFIT

6,267



5,961



5.1



19,476



18,665



4.3














Operating Expenses:












Selling, General and Administrative

4,139



3,956



4.6



12,291



12,151



1.2


Depreciation and Amortization

395



390



1.3



1,169



1,183



(1.2)


Total Operating Expenses

4,534



4,346



4.3



13,460



13,334



0.9




















OPERATING INCOME

1,733



1,615



7.3



6,016



5,331



12.8




















Interest and Other (Income) Expense:












Interest and Investment Income

(5)



(4)



25.0



(14)



(9)



55.6


Interest Expense

155



162



(4.3)



466



452



3.1


Other







(67)





N/A


Interest and Other, net

150



158



(5.1)



385



443



(13.1)




















EARNINGS BEFORE PROVISION FOR

INCOME TAXES

1,583



1,457



8.6



5,631



4,888



15.2




















Provision for Income Taxes

636



523



21.6



2,117



1,779



19.0














NET EARNINGS

$

947



$

934



1.4

%


$

3,514



$

3,109



13.0

%













Weighted Average Common Shares

1,487



1,540



(3.4)

%


1,505



1,572



(4.3)

%

BASIC EARNINGS PER SHARE

$

0.64



$

0.61



4.9



$

2.33



$

1.98



17.7














Diluted Weighted Average Common Shares

1,498



1,548



(3.2)

%


1,517



1,581



(4.0)

%

DILUTED EARNINGS PER SHARE

$

0.63



$

0.60



5.0



$

2.32



$

1.97



17.8















Three Months Ended




Nine Months Ended



SELECTED HIGHLIGHTS

October 28,
2012


October 30,
2011


% Increase

(Decrease)


October 28, 2012


October 30, 2011


% Increase

(Decrease)

Number of Customer Transactions

331.0



325.3



1.7

%


1,034.8



1,014.5



2.0

%

Average Ticket (actual)

$

54.55



$

53.03



2.9



$

54.71



$

53.50



2.3


Weighted Average Weekly Sales per

Operating Store (in thousands)

$

616



$

590



4.4



$

644



$

620



3.9


Square Footage at End of Period

235



235





235



235




Capital Expenditures

$

336



$

351



(4.3)



$

887



$

820



8.2


Depreciation and Amortization (1)

$

424



$

416



1.9

%


$

1,257



$

1,265



(0.6)

%

__________




(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 SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS ITEMS EXCLUDING CERTAIN ADJUSTMENTS (NON-GAAP)

FOR THE THREE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011

(Unaudited)

(Amounts in Millions Except Per Share Data)

 


Three Months Ended October 28, 2012


Actuals


Adjustments(1)


As Adjusted

(Non-GAAP)

Cost of Sales

$

11,863



$

10



$

11,853


Gross Profit

$

6,267



$

(10)



$

6,277


Total Operating Expenses

$

4,534



$

155



$

4,379


Operating Income

$

1,733



$

(165)



$

1,898


Net Earnings

$

947



$

(165)



$

1,112


Diluted Earnings Per Share

$

0.63



$

(0.11)



$

0.74









Three Months Ended October 30, 2011


Actuals


Adjustments


As Adjusted

(Non-GAAP)

Cost of Sales

$

11,365



$



$

11,365


Gross Profit

$

5,961



$



$

5,961


Total Operating Expenses

$

4,346



$



$

4,346


Operating Income

$

1,615



$



$

1,615


Net Earnings

$

934



$



$

934


Diluted Earnings Per Share

$

0.60



$



$

0.60


__________



(1)

Adjustments are comprised of charges related to the closing of seven stores in China.

 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF OCTOBER 28, 2012, OCTOBER 30, 2011 AND JANUARY 29, 2012

(Unaudited)

(Amounts in Millions)

 


October 28,
2012


October 30,
2011


January 29,
2012

ASSETS






Cash and Cash Equivalents

$

2,554



$

2,234



$

1,987


Receivables, net

1,645



1,384



1,245


Merchandise Inventories

10,960



10,717



10,325


Other Current Assets

796



1,143



963


Total Current Assets

15,955



15,478



14,520


 

Property and Equipment, net

24,124



24,532



24,448


Goodwill

1,141



1,072



1,120


Other Assets

441



417



430


TOTAL ASSETS

$

41,661



$

41,499



$

40,518








LIABILITIES AND STOCKHOLDERS' EQUITY






Accounts Payable

$

6,010



$

5,669



$

4,856


Accrued Salaries and Related Expenses

1,311



1,227



1,372


Current Installments of Long-Term Debt

34



44



30


Other Current Liabilities

3,311



3,646



3,118


Total Current Liabilities

10,666



10,586



9,376


 

Long-Term Debt

10,779



10,739



10,758


Other Long-Term Liabilities

2,478



2,405



2,486


Total Liabilities

23,923



23,730



22,620


 

Total Stockholders' Equity

17,738



17,769



17,898


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

41,661



$

41,499



$

40,518



 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011

(Unaudited)

(Amounts in Millions)

 


Nine Months Ended


October 28,
2012


October 30,
2011

CASH FLOWS FROM OPERATING ACTIVITIES:




Net Earnings

$

3,514



$

3,109


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




Depreciation and Amortization

1,257



1,265


Stock-Based Compensation Expense

158



157


Changes in Working Capital and Other

455



1,160


Net Cash Provided by Operating Activities

5,384



5,691


 

CASH FLOWS FROM INVESTING ACTIVITIES:




Capital Expenditures

(887)



(820)


Payments for Businesses Acquired, net

(121)




Proceeds from Sale of Business, net



101


Proceeds from Sales of Property and Equipment

21



36


Net Cash Used in Investing Activities

(987)



(683)


 

CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from Long-Term Borrowings, net of discount



1,994


Repayments of Long-Term Debt

(23)



(1,021)


Repurchases of Common Stock

(3,330)



(3,056)


Proceeds from Sales of Common Stock

697



91


Cash Dividends Paid to Stockholders

(1,312)



(1,187)


Other

133



(118)


Net Cash Used in Financing Activities

(3,835)



(3,297)


 

Change in Cash and Cash Equivalents

 

562



1,711


Effect of Exchange Rate Changes on Cash and Cash Equivalents

5



(22)


Cash and Cash Equivalents at the Beginning of the Period

1,987



545


 

Cash and Cash Equivalents at the End of the Period

$

2,554



$

2,234


 

 

SOURCE The Home Depot

Copyright 2012 PR Newswire



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