ATLANTA -- 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

 

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

SOURCE The Home Depot

CONTACT: 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

RELATED LINKS
http://www.homedepot.com

Have something to say? Share your thoughts with us in the comments below.