The Home Depot Announces Second Quarter Results

ATLANTA, Aug. 16, 2016 /CNW/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $26.5 billion for the second quarter of fiscal 2016, a 6.6 percent increase from the second quarter of fiscal 2015. Comparable store sales for the second quarter of fiscal 2016 were positive 4.7 percent, and comp sales for U.S. stores were positive 5.4 percent.

Net earnings for the second quarter of fiscal 2016 were $2.4 billion, or $1.97 per diluted share, compared with net earnings of $2.2 billion, or $1.73 per diluted share, in the same period of fiscal 2015. For the second quarter of fiscal 2016, diluted earnings per share increased 13.9 percent from the same period in the prior year.

"We had a solid quarter, achieving the highest quarterly sales and net earnings results in company history as housing continues to be a tailwind for our business," said Craig Menear, chairman, CEO and president. "This was made possible by our hard working associates in their continued dedication to our customers."

Updated Fiscal 2016 Guidance

The Company reaffirmed its fiscal 2016 sales guidance and expects sales will be up approximately 6.3 percent and comp sales will be up approximately 4.9 percent. The Company raised its diluted earnings-per-share guidance for the year and now expects diluted earnings per share to grow approximately 15.6 percent from fiscal 2015 to $6.31.

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 2,275 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 AND SIX MONTHS ENDED JULY 31, 2016 AND AUGUST 2, 2015

(Unaudited)

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

 



Three Months Ended




Six Months Ended




July 31,
2016


August 2,
 2015


% Increase

(Decrease)


July 31,
2016


August 2,
 2015


% Increase
(Decrease)

NET SALES

$

26,472



$

24,829



6.6

%


$

49,234



$

45,720



7.7

%

Cost of Sales

17,545



16,464



6.6



32,516



30,176



7.8


GROSS PROFIT

8,927



8,365



6.7



16,718



15,544



7.6


 

Operating Expenses:












Selling, General and Administrative

4,388



4,299



2.1



8,669



8,462



2.4


Depreciation and Amortization

436



419



4.1



869



838



3.7


Total Operating Expenses

4,824



4,718



2.2



9,538



9,300



2.6


OPERATING INCOME

4,103



3,647



12.5



7,180



6,244



15.0


Interest and Other (Income) Expense:












Interest and Investment Income

(8)



(149)



(94.6)



(15)



(153)



(90.2)


Interest Expense

236



233



1.3



480



430



11.6


Interest and Other, net

228



84



N/M


465



277



67.9


 

EARNINGS BEFORE PROVISION FOR

INCOME TAXES

3,875



3,563



8.8



6,715



5,967



12.5


Provision for Income Taxes

1,434



1,329



7.9



2,471



2,154



14.7














NET EARNINGS

$

2,441



$

2,234



9.3

%


$

4,244



$

3,813



11.3

%













Weighted Average Common Shares

1,235



1,283



(3.7)

%


1,242



1,291



(3.8)

%

BASIC EARNINGS PER SHARE

$

1.98



$

1.74



13.8



$

3.42



$

2.95



15.9














Diluted Weighted Average Common Shares

1,240



1,289



(3.8)

%


1,247



1,298



(3.9)

%

DILUTED EARNINGS PER SHARE

$

1.97



$

1.73



13.9



$

3.40



$

2.94



15.6















Three Months Ended




Six Months Ended



SELECTED SALES DATA(1)

July 31,
2016


August 2,
 2015


% Increase

(Decrease)


July 31, 2016


August 2, 2015


% Increase

(Decrease)

Number of Customer Transactions

430.0



420.4



2.3

%


804.8



780.6



3.1

%

Average Ticket (actual)

$

60.87



$

59.42



2.4



$

60.48



$

59.04



2.4


Sales per Square Foot (actual)

$

438.61



$

420.37



4.3



$

407.64



$

387.04



5.3


 

 —————

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

 

N/M – Not Meaningful

 

 

 


 

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JULY 31, 2016, AUGUST 2, 2015 AND JANUARY 31, 2016

(Unaudited)

(Amounts in Millions)

 



July 31,
2016


August 2,

2015 (1)


January 31,

2016 (1)

ASSETS






Cash and Cash Equivalents

$

4,018



$

4,936



$

2,216


Receivables, net

1,995



1,696



1,890


Merchandise Inventories

12,323



11,859



11,809


Other Current Assets

605



586



569


Total Current Assets

18,941



19,077



16,484


 

Property and Equipment, net

21,975



22,302



22,191


Goodwill

2,106



1,340



2,102


Other Assets

1,225



557



1,196


TOTAL ASSETS

$

44,247



$

43,276



$

41,973








LIABILITIES AND STOCKHOLDERS' EQUITY






Short-Term Debt

$



$



$

350


Accounts Payable

8,273



7,495



6,565


Accrued Salaries and Related Expenses

1,453



1,384



1,515


Current Installments of Long-Term Debt

43



3,056



77


Other Current Liabilities

4,756



4,462



4,017


Total Current Liabilities

14,525



16,397



12,524


 

Long-Term Debt, excluding current installments

20,900



16,221



20,789


Other Long-Term Liabilities

2,165



2,021



2,344


Total Liabilities

37,590



34,639



35,657


 

Total Stockholders' Equity

6,657



8,637



6,316


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

44,247



$

43,276



$

41,973



 —————

(1)     The Consolidated Balance Sheets as of August 2, 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 SIX MONTHS ENDED JULY 31, 2016 AND AUGUST 2, 2015

(Unaudited)

(Amounts in Millions)

 



Six Months Ended


July 31,
2016


August 2,
 2015

CASH FLOWS FROM OPERATING ACTIVITIES:




Net Earnings

$

4,244



$

3,813


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




Depreciation and Amortization

978



915


Stock-Based Compensation Expense

133



122


Gain on Sales of Investments



(144)


Changes in Working Capital and Other

1,522



1,228


Net Cash Provided by Operating Activities

6,877



5,934


 

CASH FLOWS FROM INVESTING ACTIVITIES:




Capital Expenditures

(697)



(705)


Proceeds from Sales of Investments



144


Proceeds from Sales of Property and Equipment

23



8


Net Cash Used in Investing Activities

(674)



(553)


 

CASH FLOWS FROM FINANCING ACTIVITIES:




Repayments of Short-Term Borrowings, net

(350)



(290)


Proceeds from Long-Term Borrowings, net of discounts

2,989



2,492


Repayments of Long-Term Debt

(3,023)



(19)


Repurchases of Common Stock

(2,441)



(3,085)


Proceeds from Sales of Common Stock

121



134


Cash Dividends Paid to Stockholders

(1,718)



(1,533)


Other Financing Activities

1



161


Net Cash Used in Financing Activities

(4,421)



(2,140)


Change in Cash and Cash Equivalents

1,782



3,241


Effect of Exchange Rate Changes on Cash and Cash Equivalents

20



(28)


Cash and Cash Equivalents at Beginning of Period

2,216



1,723


Cash and Cash Equivalents at End of Period

$

4,018



$

4,936


 

 

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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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