The Home Depot Announces First Quarter Results; Raises Fiscal Year 2016 Guidance

ATLANTA, May 17, 2016 /CNW/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $22.8 billion for the first quarter of fiscal 2016, a 9.0 percent increase from the first quarter of fiscal 2015. Comparable store sales for the first quarter of fiscal 2016 were positive 6.5 percent, and comp sales for U.S. stores were positive 7.4 percent.

Net earnings for the first quarter of fiscal 2016 were $1.8 billion, or $1.44 per diluted share, compared with net earnings of $1.6 billion, or $1.21 per diluted share, in the same period of fiscal 2015. For the first quarter of fiscal 2016, diluted earnings per share increased 19.0 percent from the same period in the prior year.

"We were pleased with our stronger than expected start to the year, driven by solid execution and broad-based growth across the store," said Craig Menear, chairman, CEO and president. "This was made possible by our hard working associates and their continued dedication to our customers in a quarter marked by week-to-week demand spikes caused by weather variability."

Updated Fiscal 2016 Guidance

The Company raised its fiscal 2016 sales guidance and now expects sales will be up approximately 6.3 percent and comp sales will be up approximately 4.9 percent. The Company also raised its diluted earnings-per-share guidance for the year and now expects diluted earnings per share to grow approximately 14.8 percent from fiscal 2015 to $6.27.

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 first quarter, the Company operated a total of 2,275 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 385,000 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; demand for credit offerings; inventory and in-stock positions; implementation of store, interconnected retail and supply chain initiatives; management of relationships with our suppliers and vendors; the impact and expected outcome of investigations, inquiries, claims and litigation, including those related to the 2014 data breach; issues related to the payment methods we accept; 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 2016 and beyond; financial outlook; and the integration of Interline Brands, Inc. into our organization and the ability to recognize the anticipated synergies and benefits of the acquisition. 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 31, 2016 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 ENDED MAY 1, 2016 AND MAY 3, 2015

(Unaudited)

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






Three Months Ended




May 1,
2016


May 3,
 2015


% Increase

(Decrease)

NET SALES

$

22,762



$

20,891



9.0

%

Cost of Sales

14,971



13,712



9.2


GROSS PROFIT

7,791



7,179



8.5


 

Operating Expenses:






Selling, General and Administrative

4,281



4,163



2.8


Depreciation and Amortization

433



419



3.3


Total Operating Expenses

4,714



4,582



2.9


OPERATING INCOME

3,077



2,597



18.5


Interest and Other (Income) Expense:






Interest and Investment Income

(7)



(4)



75.0


Interest Expense

244



197



23.9


Interest and Other, net

237



193



22.8


 

EARNINGS BEFORE PROVISION FOR

INCOME TAXES

2,840



2,404



18.1


Provision for Income Taxes

1,037



825



25.7








NET EARNINGS

$

1,803



$

1,579



14.2

%







Weighted Average Common Shares

1,247



1,298



(3.9)

%

BASIC EARNINGS PER SHARE

$

1.45



$

1.22



18.9








Diluted Weighted Average Common Shares

1,252



1,305



(4.1)

%

DILUTED EARNINGS PER SHARE

$

1.44



$

1.21



19.0









Three Months Ended



SELECTED SALES DATA(1)

May 1,
2016


May 3,
 2015


% Increase

(Decrease)

Number of Customer Transactions

374.8



360.2



4.1

%

Average Ticket (actual)

$

60.03



$

58.60



2.4


Sales per Square Foot (actual)

$

376.73



$

353.70



6.5


 



(1)

Selected Sales Data does not include results for the Interline acquisition that was completed in the third quarter of fiscal 2015.

 

 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MAY 1, 2016, MAY 3, 2015 AND JANUARY 31, 2016

(Unaudited)

(Amounts in Millions)








May 1,
2016


May 3,

2015(1)


January 31,

2016 (1)

ASSETS






Cash and Cash Equivalents

$

3,257



$

2,827



$

2,216


Receivables, net

1,989



1,839



1,890


Merchandise Inventories

13,219



12,306



11,809


Other Current Assets

545



520



569


Total Current Assets

19,010



17,492



16,484


 

Property and Equipment, net

22,243



22,562



22,191


Goodwill

2,123



1,359



2,102


Other Assets

1,200



544



1,196


TOTAL ASSETS

$

44,576



$

41,957



$

41,973








LIABILITIES AND STOCKHOLDERS' EQUITY






Short-Term Debt

$



$



$

350


Accounts Payable

8,711



8,070



6,565


Accrued Salaries and Related Expenses

1,339



1,283



1,515


Current Installments of Long-Term Debt

44



3,052



77


Other Current Liabilities

5,055



4,597



4,017


Total Current Liabilities

15,149



17,002



12,524


 

Long-Term Debt, excluding current installments

20,904



13,738



20,789


Other Long-Term Liabilities

2,188



2,013



2,344


Total Liabilities

38,241



32,753



35,657


 

Total Stockholders' Equity

6,335



9,204



6,316


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

44,576



$

41,957



$

41,973


 



(1)

The Consolidated Balance Sheets as of May 3, 2015 and January 31, 2016 were retrospectively adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" and ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" in the first quarter of fiscal 2016.

 

 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MAY 1, 2016 AND MAY 3, 2015

(Unaudited)

(Amounts in Millions)




Three Months Ended


May 1,
2016


May 3,
 2015

CASH FLOWS FROM OPERATING ACTIVITIES:




Net Earnings

$

1,803



$

1,579


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




Depreciation and Amortization

486



454


Stock-Based Compensation Expense

72



69


Changes in Working Capital and Other

1,275



1,302


Net Cash Provided by Operating Activities

3,636



3,404


 

CASH FLOWS FROM INVESTING ACTIVITIES:




Capital Expenditures

(325)



(322)


Proceeds from Sales of Property and Equipment

4



5


Net Cash Used in Investing Activities

(321)



(317)


 

CASH FLOWS FROM FINANCING ACTIVITIES:




Repayments of Short-Term Borrowings, net

(350)



(290)


Proceeds from Long-Term Borrowings, net of discounts

2,989




Repayments of Long-Term Debt

(3,012)



(10)


Repurchases of Common Stock

(1,157)



(1,125)


Proceeds from Sales of Common Stock

29



47


Cash Dividends Paid to Stockholders

(862)



(769)


Other Financing Activities

25



146


Net Cash Used in Financing Activities

(2,338)



(2,001)


Change in Cash and Cash Equivalents

977



1,086


Effect of Exchange Rate Changes on Cash and Cash Equivalents

64



18


Cash and Cash Equivalents at Beginning of Period

2,216



1,723


Cash and Cash Equivalents at End of Period

$

3,257



$

2,827


 

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, http://www.homedepot.com


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