The Home Depot Announces Fourth Quarter and Fiscal 2007 Results; Provides Fiscal 2008 Outlook



    ATLANTA, Feb. 26 /CNW/ -- The Home Depot(R), the world's largest home
improvement retailer, today reported fiscal 2007 fourth quarter consolidated
net earnings of $671 million, or $0.40 per diluted share, compared with $925
million, or $0.46 per diluted share, in the same period in fiscal 2006.  Sales
for the fourth quarter totaled $17.7 billion, a 1.5 percent increase from the
fourth quarter of fiscal 2006.
    
    (Logo: http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO )
    
    The fourth quarter of 2007 consisted of 14 weeks compared with 13 weeks
for the prior year.  The 14th week added approximately $1.1 billion in sales
for the quarter and the year.  Excluding the 14th week, fourth quarter sales
declined by 4.7 percent compared to the fourth quarter of 2006.  Comparable
store sales for the quarter declined 8.3 percent.  The additional week had no
impact on comparable sales performance for the quarter or the year.
    Earnings per diluted share from continuing operations in the fourth
quarter of fiscal 2007 were $0.40, compared to $0.42 per diluted share in the
fourth quarter of fiscal 2006, a decrease of 4.8 percent.  The 14th week
increased earnings per diluted share for continuing operations by
approximately $0.04 for the quarter and the year.  Excluding the 14th week,
earnings per diluted share from continuing operations declined by 14.3
percent.
    
    Fiscal 2007
    
    For fiscal 2007, consolidated earnings per diluted share decreased 15.1
percent to $2.37 on consolidated net earnings of $4.4 billion, compared to
consolidated earnings per diluted share of $2.79 on net earnings of $5.8
billion in fiscal 2006.  Excluding the 53rd week, consolidated earnings per
share declined by 16.5 percent.
    Earnings per diluted share from continuing operations in fiscal 2007 were
$2.27, compared to $2.55 per diluted share in fiscal 2006, a decline of 11.0
percent.  Excluding the 53rd week, earnings per share from continuing
operations declined by 12.5 percent.  Sales for fiscal 2007 were $77.3
billion, 2.1 percent below fiscal 2006.  Excluding the 53rd week, sales for
fiscal 2007 decreased by 3.5 percent from fiscal 2006.  Comparable store sales
for the year declined 6.7 percent.
    "This was a difficult year financially, but I believe the progress we
made on our key priorities set the foundation for the long term health of our
company," said Frank Blake, chairman & CEO.  "I want to personally thank our
associates, who remain passionately dedicated to improving the shopping
experience for our customers."
    "We see the home improvement market in 2008 as challenging, but we are
going to continue to focus on our five priorities and build on the progress we
made in 2007," Blake said.

    2008 Financial Outlook

    
    -- Total sales decline of 4 to 5 percent
    -- Negative comps in the mid to high single digit range
    -- Flat to slightly positive gross margin expansion
    -- Operating margin decline of 170 to 210 basis points
    -- Depreciation and amortization expense of approximately $1.9 billion
    -- Income tax rate of 37.2 percent
    -- Continuing operations earnings per share decline of 19 to 24 percent
    -- Capital expenditures of $2.3 billion
    -- 55 new store openings with 5 store relocations
    
    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 homedepot.com in the Investor Relations section.
    At the end of the fourth quarter, the Company operated a total of 2,234
retail stores, which included 1,950 The Home Depot stores in the United States
(including the Commonwealth of Puerto Rico, the territory of the U.S. Virgin
Islands and the territory of Guam), 165 stores in Canada, 66 stores in Mexico,
12 stores in China, as well as 2 THD Design Centers, 5 Yardbirds stores and 34
EXPO Design Center(R) locations.  The Company employs approximately 350,000
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.  HDE
    To provide clarity about the Company's operating performance for the
recently completed quarter and year, the Company supplemented the reporting of
sales and earnings per share with a non-GAAP measurement to reflect a 14th
week of operations which occurred during the fourth quarter of fiscal 2007.
This supplemental information should not be considered in isolation or as a
substitute for the GAAP measurement of sales and earnings per share.
    Certain statements contained herein, including any statements related to
the state of the home improvement market, the state of the construction and
housing markets, reinvestment plans and our financial outlook for fiscal 2008,
constitute "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. While these statements are based on currently
available information and current expectations and projections about future
events, such forward-looking statements may prove to be incorrect.  Risks and
uncertainties include but are not limited to:  economic conditions in North
America; changes in our cost structure; our ability to attract, train and
retain highly qualified associates; conditions affecting customer transactions
and average ticket, including, but not limited to, weather conditions,
improving and streamlining operations, and customers' in-store experience.
Undue reliance should not be placed on such forward-looking statements as they
speak only as of the date hereof, and we undertake no obligation to update
these statements to reflect subsequent events or circumstances except as may
be required by law. Additional information regarding these and other risks and
uncertainties is contained in our periodic filings with the SEC, including our
Annual Report on Form 10-K for the fiscal year ended January 28, 2007.



    
                    THE HOME DEPOT, INC. AND SUBSIDIARIES
    
    CONSOLIDATED STATEMENTS OF EARNINGS   FOR THE THREE MONTHS AND YEARS
ENDED FEBRUARY 3, 2008 AND JANUARY 28, 2007
    
                                 (Unaudited)
      (Amounts in Millions Except Per Share Data and as Otherwise Noted)
    

    
                                             % In-                     % In-
                              Three Months   crease        Years       crease
                                 Ended(1)    (De-         Ended(2)    (De-
                             2-3-08 1-28-07  crease)  2-3-08  1-28-07  crease)
    

    
    NET SALES               $17,659 $17,404    1.5%  $77,349  $79,022   (2.1)%
    Cost of Sales            11,605  11,554    0.4    51,352   52,476   (2.1)
    

    GROSS PROFIT            6,054   5,850    3.5    25,997   26,546   (2.1)

    
    Operating Expenses:
      Selling, General
       and Administrative     4,353   4,000    8.8    17,053   16,106    5.9
      Depreciation and
       Amortization             452     393   15.0     1,702    1,574    8.1
        Total Operating
         Expenses             4,805   4,393    9.4    18,755   17,680    6.1
    


    OPERATING INCOME        1,249   1,457  (14.3)    7,242    8,866  (18.3)


    
    Interest (Income)
     Expense:
      Interest and
       Investment Income        (7)      (5)  40.0       (74)     (27) 174.1
      Interest Expense          199     128   55.5       696      391   78.0
        Interest, net           192     123   56.1       622      364   70.9
    

    
    EARNINGS FROM CONTINUING
     OPERATIONS BEFORE
     PROVISION FOR INCOME
     TAXES                    1,057   1,334  (20.8)    6,620    8,502  (22.1)
    

    
    Provision for Income
     Taxes                      386     493  (21.7)    2,410    3,236  (25.5)
    

    
    EARNINGS FROM CONTINUING
     OPERATIONS                 671     841  (20.2)    4,210    5,266  (20.1)
    

    
    EARNINGS FROM DISCONTINUED
     OPERATIONS, NET OF TAX       -      84 (100.0)      185      495  (62.6)
    

    NET EARNINGS             $671    $925  (27.5)%  $4,395   $5,761  (23.7)%


    
    Weighted Average Common
     Shares                   1,677   1,993  (15.9)%   1,849    2,054  (10.0)%
    BASIC EARNINGS PER SHARE
     FROM CONTINUING
     OPERATIONS               $0.40   $0.42   (4.8)    $2.28    $2.56  (10.9)
    BASIC EARNINGS PER SHARE
     FROM DISCONTINUED
     OPERATIONS                  $-   $0.04 (100.0)    $0.10    $0.24  (58.3)
    BASIC EARNINGS PER SHARE  $0.40   $0.46  (13.0)    $2.38    $2.80  (15.0)
    

    
    Diluted Weighted Average
     Common Shares            1,680   2,004  (16.2)%   1,856    2,062  (10.0)%
    DILUTED EARNINGS PER
     SHARE FROM CONTINUING
     OPERATIONS               $0.40   $0.42   (4.8)    $2.27    $2.55  (11.0)
    DILUTED EARNINGS PER
     SHARE FROM DISCONTINUED
     OPERATIONS                  $-   $0.04 (100.0)    $0.10    $0.24  (58.3)
    DILUTED EARNINGS PER
     SHARE                    $0.40   $0.46  (13.0)    $2.37    $2.79  (15.1)
    


    
    SELECTED HIGHLIGHTS(3)                   % In-                     % In-
                              Three Months   crease        Years       crease
                                 Ended(1)    (De-         Ended(2)    (De-
                             2-3-08 1-28-07  crease)  2-3-08  1-28-07  crease)
    Number of Customer
     Transactions               314     304    3.3%    1,336    1,330    0.5%
    Average Ticket           $54.96  $56.27   (2.3)   $57.48   $58.90   (2.4)
    Weighted Average Weekly
     Sales per Operating
     Store                     $553    $617  (10.4)     $658     $723   (9.0)
    Square Footage at End
     of Period                  235     224    4.9       235      224    4.9
    Capital Expenditures     $1,040    $974    6.8    $3,388   $3,321    2.0
    Depreciation and
     Amortization (4)          $481    $415   15.9    $1,823   $1,682    8.4
    


    
    (1) The three months ended 2-3-08 includes 14 weeks. The three months
        ended 1-28-07 includes 13 weeks.
    

    
    (2) The year ended 2-3-08 includes 53 weeks. The year ended 1-28-07
        includes 52 weeks.
    

    (3) Includes continuing operations only.

    
    (4) Includes depreciation of distribution centers and tool rental
        equipment included in Cost of Sales and amortization of deferred
        financing costs included in Interest Expense.
    



    
                      THE HOME DEPOT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                   AS OF FEBRUARY 3, 2008 AND JANUARY 28, 2007
                              (Amounts in Millions)
    

    
                                                     2-3-08           1-28-07
                                                 (Unaudited)        (Audited)
    

    
     ASSETS
       Cash and Short-Term Investments                $457              $614
       Receivables, net                              1,259             3,223
       Merchandise Inventories                      11,731            12,822
       Other Current Assets                          1,227             1,341
          Total Current Assets                      14,674            18,000
    

    
       Property and Equipment, net                  27,476            26,605
       Goodwill                                      1,209             6,314
       Other Assets                                    965             1,344
          TOTAL ASSETS                             $44,324           $52,263
    

    
     LIABILITIES AND STOCKHOLDERS' EQUITY
       Short-Term Debt                              $1,747              $-
       Accounts Payable                              5,732             7,356
       Accrued Salaries and Related Expenses         1,094             1,307
       Current Installments of Long-Term Debt          300                18
       Other Current Liabilities                     3,833             4,250
          Total Current Liabilities                 12,706            12,931
    

    
       Long-Term Debt                               11,383            11,643
       Other Long-Term Liabilities                   2,521             2,659
          Total Liabilities                         26,610            27,233
    

    
       Total Stockholders' Equity                   17,714            25,030
          TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY                    $44,324           $52,263
    




For further information:

For further information: Financial Community, Diane Dayhoff, Sr. Vice 
President of Investor Relations, +1-770-384-2666, 
diane_dayhoff@homedepot.com; or News Media, Ron DeFeo, Director, Corporate 
Communications, +1-770-384-3179, ron_defeo@homedepot.com Web Site:
http://www.homedepot.com/


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