The Home Depot Announces Second Quarter Results;
Updates Fiscal Year 2018 Guidance
ATLANTA, August 14, 2018 --The Home Depot®, the world's largest home improvement retailer, today reported sales of $30.5 billion for the second quarter of fiscal 2018, an 8.4 percent increase from the second quarter of fiscal 2017. Comparable sales for the second quarter of fiscal 2018 were positive 8.0 percent, and comp sales in the U.S. were positive 8.1 percent.
Net earnings for the second quarter of fiscal 2018 were $3.5 billion, or $3.05 per diluted share, compared with net earnings of $2.7 billion, or $2.25 per diluted share, in the same period of fiscal 2017. For the second quarter of fiscal 2018, diluted earnings per share increased 35.6 percent from the same period in the prior year.
"We were very pleased with our record second quarter sales and earnings. Not only did our seasonalbusiness rebound from the first quarter, but our overallresults exceeded our expectations," said Craig Menear, chairman, CEO and president. "These results exemplify the outstanding execution of our combined team of store associates, merchants, suppliers and supply chain."
Updated Fiscal 2018 Guidance
Based on its year-to-date performance, the Company updated its fiscal 2018 sales growth guidance and now expects sales will be up approximately 7.0 percent including the 53rdweek, with comp sales growth of approximately 5.3 percent for the comparable 52-week period. The Company also raised its diluted earnings-per-share growth guidance for the year and now expects diluted earnings-per-sharegrowth of approximately 29.2 percent from fiscal 2017 to $9.42. The Company's diluted earnings-per-share growth guidance includes $6 billion of share repurchases for fiscal 2018.
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 athttp://ir.homedepot.com/events-and-presentations.
Recent Accounting Pronouncement-Revenue Recognition
During the first quarter of fiscal 2018, the Company adopted ASU No. 2014-09, which pertains torevenue recognition. The adoption of this standard will not materially impact the Company'sconsolidated financial statements or related disclosures.
The Company has adopted this standard on a modified retrospective basis. In accordance therewith, financial information prior to fiscal 2018 will not be recast. The consolidated statements of earnings and balance sheet for periods and dates subsequent to fiscal 2017 reflect the effect of this accountingpolicy adoption.
Additional information about the impact of the adoption of ASU No. 2014-09 is available athttp://ir.homedepot.com/financial-reports/quarterly-earnings/2018.
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At the end of the second quarter, the Company operated a total of 2,286 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 400,000 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.
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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 sales; effects of competition; implementation of store, interconnected retail, supply chain and technology initiatives; issues related to the payment methods we accept; 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; demand for credit offerings; inventory and in-stock positions; 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 impact and expected outcome of investigations, inquiries, claims and litigation; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of the Tax Cuts and Jobs Act of 2017; store openings and closures; guidance for fiscal 2018 and beyond; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and benefits of those acquisitions. 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 thosedescribed in Item 1A, "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended January 28, 2018 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.
For more information, contact:
Financial Community | News Media |
Isabel Janci | Stephen Holmes |
Vice President of Investor Relations | Senior Director of Corporate Communications |
770-384-2666 | 770-384-5075 |
isabel_janci@homedepot.com | stephen_holmes@homedepot.com |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
in millions, except per share data
Net sales
Cost of sales
Gross profit Operating expenses:
Selling, general and administrative Depreciation and amortization Total operating expenses Operating income
Interest and other (income) expense:
Interest and investment income Interest expense
Interest and other, net
Earnings before provision for income taxes Provision for income taxes
Net earnings
Basic weighted average common shares Basic earnings per share
Diluted weighted average common shares Diluted earnings per share
July 29, 2018
$ 30,463 $ 20,098 10,365
5,004
460
5,464
4,901
(26)
272
246
4,655
1,149
$ 3,506 $1,144
$ 3.06 $ 1,149
$ 3.05 $
July 30, 2017
% ChangeSix Months EndedJuly 29, 2018
July 30, 2017
% Change
28,108 8.4 % $
18,647 9,461 4,549 4494,9984,463
7.8 9.6
10.0 2.4 9.3 9.8
(16)
62.5
265
2.6
249
(1.2)
4,214
10.5
1,542
(25.5)
55,410 $ 36,428 18,982 9,783 91710,7008,282
51,995 6.6 %
34,380 6.0
17,615 7.8
8,910 9.8
893 2.7
9,8039.2
7,812 6.0
(48)
(29) 65.5
533
519 2.7
485
490(1.0)
7,797
7,322 6.5
1,887
2,636 (28.4)
2,67231.2 %$
5,910 $
4,68626.1 %
1,183 (3.3)%
2.26 35.4 $
1,189 (3.4)%
2.25 35.6 $
1,148 1,191 (3.6)%
5.15 $ 3.93 31.0
1,154 1,197 (3.6)%
5.12 $ 3.91 30.9
Three Months Ended
Selected Sales Data(1)
Customer transactions (in millions) Average ticket
Sales per square foot-----
July 29, 2018
455.4
$ 66.20 $ 504.20
July 30, 2017
% Change
441.8 3.1 %
Six Months Ended
July 29, 2018
July 30, 2017
831.2
63.05 464.38
5.0 $ 8.6
66.12 $ 62.74 5.4
458.07 429.17 6.7
(1)Selected Sales Data does not include results for Interline Brands, Inc., which was acquired in fiscal 2015.
% Change
822.6 1.1 %
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
in millions
Assets
Cash and cash equivalents Receivables, net Merchandise inventories Other current assets
Total current assets
Net property and equipment Goodwill
July 29,2018
July 30, 2017
January 28, 2018
$
3,490
$
4,830
$ 3,595
2,164
2,187 1,952
14,044
12,868 12,748
1,104
626 638
20,802
20,511 18,933
21,909
22,035 22,075
2,251
2,235 2,275
Other assets
1,270
1,178 1,246
Total assets
$
46,232
$
45,959
$ 44,529
Liabilities and Stockholders' EquityShort-term debt
Accounts payable
Accrued salaries and related expenses Current installments of long-term debt Other current liabilities
Total current liabilities
Long-term debt, excluding current installments Other liabilities
Total liabilities
Total stockholders' equity
Total liabilities and stockholders' equity
$
- $
- $ 1,559
9,407
8,541 7,244
1,535
1,503 1,640
2,203
545 1,202
5,281
5,234 4,549
18,426
15,823 16,194
23,295
24,422 24,267
2,502
2,160 2,614
44,223
42,405 43,075
2,009
3,554 1,454
$
46,232 $
45,959 $ 44,529
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
in millions
Cash Flows from Operating Activities:Net earnings
Reconciliation of net earnings to net cash provided by operating activities:
Six Months EndedJuly 29, 2018
July 30, 2017
$
5,910
$ 4,686
Depreciation and amortization 1,062 1,015
Stock-based compensation expense
234 148
Changes in working capital and other, net of acquisition effects 791 2,013
Net cash provided by operating activities 7,997 7,862
Cash Flows from Investing Activities:
Capital expenditures, net of non-cash capital expenditures Payments for business acquired, net
Proceeds from sales of property and equipment
(1,091) (846)
- (268) 16 23
Net cash used in investing activities (1,075) (1,091)
Cash Flows from Financing Activities:
Repayments of short-term debt, net (1,559) (710)Proceeds from long-term debt, net of discounts Repayments of long-term debt
Repurchases of common stock Proceeds from sales of common stock Cash dividends
Other financing activities
Net cash used in financing activities
- 1,994 (28) (21)
(3,121)
(3,921)
35 (2,373)
137 (2,130)
142
2
(6,904) (4,649)Change in cash and cash equivalents 18 2,122
Effect of exchange rate changes on cash and cash equivalents
(123) 170
Cash and cash equivalents at beginning of period 3,595 2,538
Cash and cash equivalents at end of period
$
3,490
$ 4,830
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The Home Depot Inc. published this content on 14 August 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 14 August 2018 10:45:07 UTC