The Home Depot Announces Second Quarter Results



    ATLANTA, Aug. 19 /CNW/ -- The Home Depot(R), the world's largest home
improvement retailer, today reported fiscal 2008 second quarter consolidated
net earnings of $1.2 billion, or $0.71 per diluted share, compared with $1.6
billion, or $0.81 per diluted share, in the same period in fiscal 2007.
Earnings per diluted share from continuing operations in the second quarter of
fiscal 2008 were $0.71, compared to $0.77 per diluted share in the second
quarter of fiscal 2007, a decrease of 7.8 percent.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO )
    
    Sales for the second quarter totaled $21.0 billion, a 5.4 percent
decrease from the second quarter of fiscal 2007, reflecting negative
comparable store sales of 7.9 percent, offset in part by sales from new
stores.
    The Company's fiscal 2007 contained 53 weeks of operations. This shifted
the Company's 2008 fiscal calendar. Because of this shift, and given the
seasonal nature of its business, second quarter sales, on a like for like
calendar basis, were negatively impacted by approximately $160 million.
Excluding the calendar shift, on a like for like basis, comparable store sales
for the quarter were negative 7.2 percent.
    "We continue to see pressure on our market and the consumer, generally,"
said Frank Blake, chairman & CEO. "Despite the macroeconomic conditions, we
saw improved execution in our merchandising and operations initiatives during
the past quarter. I am very proud of what our associates have accomplished in
a difficult environment," said Blake.
    
    Fiscal Year 2008 Financial Outlook
    
    Given the continued softness in the housing and home improvement markets
as well as the commitment to invest in its key retail priorities, the Company
believes fiscal 2008 sales will decline by approximately five percent and
diluted earnings per share from continuing operations will decline by
approximately 24 percent. This is consistent with its previous guidance. The
Company's 2008 earnings per share guidance does not include its store
rationalization charge from the closing of 15 stores and removal of 50 stores
from its future growth pipeline.
    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 second quarter, the Company operated a total of 2,257
retail stores, which included 1,965 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), 167 stores in Canada, 72 stores in Mexico,
12 stores in China, as well as 2 THD Design Centers, 5 Yardbirds stores and 34
EXPO Design Center locations. 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. HDE
    Certain statements contained herein, including any statements related to
the state of the home improvement market, the state of the construction and
housing markets, our reinvestment plans and financial outlook, 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, 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 February 3, 2008. HDE



    
                       THE HOME DEPOT, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
    FOR THE THREE MONTHS AND SIX MONTHS ENDED AUGUST 3, 2008 AND JULY 29, 2007
                                   (Unaudited)
        (Amounts in Millions Except Per Share Data and as Otherwise Noted)
    

    
                          Three Months                Six Months
                             Ended      % Increase      Ended       % Increase
                        8-3-08  7-29-07 (Decrease)  8-3-08  7-29-07 (Decrease)
    

    
    NET SALES          $20,990  $22,184    (5.4)%  $38,897  $40,729    (4.5)%
    Cost of Sales       14,026   14,843    (5.5)    25,861   27,125    (4.7)
      GROSS PROFIT       6,964    7,341    (5.1)    13,036   13,604    (4.2)
    

    
    Operating
     Expenses:
      Selling, General
       and Admini-
       strative          4,470    4,370     2.3      9,370    8,556     9.5
      Depreciation and
       Amortization        452      414     9.2        896      819     9.4
        Total Operating
         Expenses        4,922    4,784     2.9     10,266    9,375     9.5
    

    
      OPERATING INCOME   2,042    2,557   (20.1)     2,770    4,229   (34.5)
    

    
    Interest (Income) Expense:
      Interest and
       Investment
       Income               (4)     (27)  (85.2)        (7)     (38)  (81.6)
      Interest Expense     161      172    (6.4)       328      343    (4.4)
    

    
        Interest, net      157      145     8.3        321      305     5.2
    

    
    EARNINGS FROM
     CONTINUING OPERATIONS
     BEFORE PROVISION
     FOR INCOME TAXES    1,885    2,412   (21.8)     2,449    3,924   (37.6)
    

    
    Provision for
     Income Taxes          683      891   (23.3)       891    1,456   (38.8)
    

    
    EARNINGS FROM
     CONTINUING
     OPERATIONS          1,202    1,521   (21.0)     1,558    2,468   (36.9)
    

    
    EARNINGS FROM
     DISCONTINUED
     OPERATIONS,
     NET OF TAX              -       66  (100.0)         -      165  (100.0)
    

    
    NET EARNINGS        $1,202   $1,587   (24.3)%   $1,558   $2,633   (40.8)%
    


    
    Weighted Average
     Common Shares       1,680    1,960   (14.3)%    1,680    1,960   (14.3)%
    

    
    BASIC EARNINGS
     PER SHARE FROM
     CONTINUING
     OPERATIONS          $0.72    $0.78   (7.7)      $0.93    $1.26   (26.2)
    BASIC EARNINGS
     PER SHARE FROM
     DISCONTINUED
     OPERATIONS             $-    $0.03  (100.0)        $-    $0.08  (100.0)
    BASIC EARNINGS
     PER SHARE           $0.72    $0.81   (11.1)     $0.93    $1.34   (30.6)
    

    
    Diluted Weighted
     Average Common
     Shares              1,685    1,969   (14.4)%    1,684    1,969   (14.5)%
    DILUTED EARNINGS
     PER SHARE FROM
     CONTINUING
     OPERATIONS         $ 0.71    $0.77    (7.8)     $0.93    $1.25   (25.6)
    DILUTED EARNINGS
     PER SHARE FROM
     DISCONTINUED
     OPERATIONS             $-    $0.03  (100.0)        $-    $0.08  (100.0)
    DILUTED EARNINGS
     PER SHARE          $ 0.71    $0.81   (12.3)     $0.93    $1.34   (30.6)
    

    
    Note: The sum of Diluted Earnings per Share from Continuing Operations and
    Diluted Earnings per Share from Discontinued Operations may not total
    Diluted Earnings per Share due to rounding.
    



    
    SELECTED HIGHLIGHTS (1)
    

    
                          Three Months                Six Months
                             Ended      % Increase      Ended       % Increase
                       8-3-08   7-29-07 (Decrease)  8-3-08  7-29-07 (Decrease)
    Number of
     Customer
     Transactions          361      377    (4.2)%      675       695   (2.9)%
    Average Ticket      $57.58   $58.30    (1.2)    $57.48    $58.63   (2.0)
    Weighted Average
     Weekly Sales per
     Operating Store
     (in thousands)       $707    $ 772    (8.4)      $662      $719   (7.9)
    Square Footage at
     End of Period         237      230     3.0        237       230    3.0
    Capital
     Expenditures         $511    $ 794   (35.6)      $960    $1,435  (33.1)
    Depreciation and
     Amortization (2)     $482    $ 446     8.1%      $956      $881    8.5%
    

    
    (1) Includes continuing operations only.
    

    
    (2) 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 AUGUST 3, 2008, JULY 29, 2007 AND FEBRUARY 3, 2008
                            (Amounts in Millions)
    

    
                                            8-3-08      7-29-07     2-3-08
                                         (Unaudited)  (Unaudited)  (Audited)
    

    
    ASSETS
      Cash and Short-Term Investments       $1,062       $3,024       $457
      Receivables, net                       1,506        1,554      1,259
      Merchandise Inventories               11,864       12,287     11,731
      Other Current Assets                   1,402        1,226      1,227
      Current Assets of Discontinued
       Operations                                -        3,781          -
        Total Current Assets                15,834       21,872     14,674
    

    
      Property and Equipment, net           27,077       26,649     27,476
      Goodwill                               1,218        1,189      1,209
      Other Assets                             970          623        965
      Noncurrent Assets of Discontinued
       Operations                                -        6,531          -
        TOTAL ASSETS                       $45,099      $56,864    $44,324
    

    
    LIABILITIES AND STOCKHOLDERS' EQUITY
      Short-Term Debt                           $-           $-     $1,747
      Accounts Payable                       7,122        7,686      5,732
      Accrued Salaries and Related Expenses  1,062        1,077      1,094
      Current Installments of Long-Term Debt   300           15        300
      Other Current Liabilities              4,153        4,695      3,833
      Current Liabilities of
       Discontinued Operations                   -        1,714          -
        Total Current Liabilities           12,637       15,187     12,706
    

    
      Long-Term Debt                        11,366       11,628     11,383
      Other Long-Term Liabilities            2,447        2,459      2,521
      Noncurrent Liabilities of
       Discontinued Operations                   -          415          -
        Total Liabilities                   26,450       29,689     26,610
    

    
      Total Stockholders' Equity            18,649       27,175     17,714
        TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY              $45,099      $56,864    $44,324

    




For further information:

For further information: Investors, Diane Dayhoff, Sr. Vice President of
Investor Relations, +1-770-384-2666, diane_dayhoff@homedepot.com; or Media,
Paula Drake, Sr. Mgr., Corporate Communications, +1-770-384-3439,
paula_drake@homedepot.com Web Site: http://www.homedepot.com


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