The Home Depot Announces Third Quarter Results; Updates Fiscal Year 2012 Guidance

The Home Depot Announces Third Quarter Results; Updates Fiscal Year 2012 Guidance

ATLANTA, Nov. 13, 2012 /CNW/ - The Home Depot(®), the world's largest home improvement retailer, today reported sales of $18.1 billion for the third quarter of fiscal 2012, a 4.6 percent increase from the third quarter of fiscal 2011. Comparable store sales for the third quarter of fiscal 2012 were positive 4.2 percent, and comp sales for U.S. stores were positive 4.3 percent.

(Logo: http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO)

Net earnings for the third quarter were $947 million, or $0.63 per diluted share, compared with net earnings of $934 million, or $0.60 per diluted share, in the same period of fiscal 2011. These results reflect a nonrecurring charge of approximately $165 million, net of tax, or $0.11 per diluted share due to the previously announced closing of seven stores in China. On an adjusted basis, the Company reported net earnings of $1.1 billion, or $0.74 per diluted share, a 23.3 percent increase from the same period in the prior year.

"Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market," said Frank Blake, chairman & CEO. "I particularly want to thank all of our associates who are helping the communities impacted by Hurricane Sandy. They are working under difficult circumstances, often with their own lives and homes disrupted by the storm, and their efforts exemplify our core values."

Updated Fiscal 2012 Guidance

Based on its performance through the third quarter, the Company updated its fiscal 2012 guidance and raised its sales growth guidance to be up approximately 5.2 percent for the year on a 53-week basis. The Company expects fiscal 2012 diluted earnings per share to be up approximately 18 percent to $2.92 for the year.

On an adjusted basis, the Company raised its diluted earnings per share growth guidance to be up approximately 23 percent to $3.03 excluding the $0.11 per diluted share impact related to the closing of seven stores in China.

This earnings-per-share guidance includes the benefit of the Company's year-to-date share repurchases and the Company's intent to repurchase $700 million in additional shares in the fourth quarter of fiscal 2012, which will bring the total dollar amount of shares repurchased to $4 billion for the year.

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 third quarter, the Company operated a total of 2,250 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 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.

To provide clarity, internally and externally, about the Company's operating performance for recently completed fiscal periods, the Company has supplemented its reporting with non-GAAP financial measures to reflect the impact of the charges related to the closing of seven stores in China. The Company believes that these non-GAAP financial measures better enable management and investors to understand and analyze the Company's performance by providing them with meaningful information relevant to events of unusual nature or frequency that impact the comparability of underlying business results from period to period. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. A reconciliation of the non-GAAP financial measures to the comparable GAAP measures can be found attached to this press release and at http://earnings.homedepot.com.

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, 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, inventory and in-stock positions, commodity price inflation and deflation, implementation of store and supply chain initiatives, continuation of share repurchase programs, net earnings performance, earnings per share, capital allocation and expenditures, liquidity, return on invested capital, management of relationships with our suppliers and vendors, stock-based compensation expense, the effect of accounting charges, the effect of adopting certain accounting standards, the ability to issue debt on terms and at rates acceptable to us, store openings and closures, expense leverage, guidance for fiscal 2012 and beyond and financial outlook. 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 29, 2012 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 AND NINE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011

(Unaudited)

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

               Three Months Ended                Nine Months Ended
               October    October    % Increase  October    October    % Increase
               28,        30,                    28, 2012   30, 2011   (Decrease)
               2012       2011       (Decrease)

NET SALES      $ 18,130   $ 17,326   4.6     %   $ 56,508   $ 54,381   3.9     %

Cost of Sales  11,863     11,365     4.4         37,032     35,716     3.7

GROSS PROFIT   6,267      5,961      5.1         19,476     18,665     4.3



Operating
Expenses:

Selling,
General and    4,139      3,956      4.6         12,291     12,151     1.2
Administrative

Depreciation
and            395        390        1.3         1,169      1,183      (1.2)
Amortization

Total
Operating      4,534      4,346      4.3         13,460     13,334     0.9
Expenses



OPERATING      1,733      1,615      7.3         6,016      5,331      12.8
INCOME



Interest and
Other (Income)
Expense:

Interest and
Investment     (5)        (4)        25.0        (14)       (9)        55.6
Income

Interest       155        162        (4.3)       466        452        3.1
Expense

Other          —    —    —     (67)       —    N/A

Interest and   150        158        (5.1)       385        443        (13.1)
Other, net



EARNINGS
BEFORE
PROVISION FOR  1,583      1,457      8.6         5,631      4,888      15.2

INCOME TAXES



Provision for  636        523        21.6        2,117      1,779      19.0
Income Taxes



NET EARNINGS   $ 947      $ 934      1.4     %   $ 3,514    $ 3,109    13.0    %



Weighted
Average Common 1,487      1,540      (3.4)   %   1,505      1,572      (4.3)   %
Shares

BASIC EARNINGS $ 0.64     $ 0.61     4.9         $ 2.33     $ 1.98     17.7
PER SHARE



Diluted
Weighted       1,498      1,548      (3.2)   %   1,517      1,581      (4.0)   %
Average Common
Shares

DILUTED
EARNINGS PER   $ 0.63     $ 0.60     5.0         $ 2.32     $ 1.97     17.8
SHARE
               Three Months Ended                Nine Months Ended

SELECTED       October    October    % Increase  October    October    % Increase
HIGHLIGHTS     28,        30,                    28, 2012   30, 2011
               2012       2011       (Decrease)                        (Decrease)

Number of
Customer       331.0      325.3      1.7     %   1,034.8    1,014.5    2.0     %
Transactions

Average Ticket $ 54.55    $ 53.03    2.9         $ 54.71    $ 53.50    2.3
(actual)

Weighted
Average Weekly
Sales per

$ 616 $ 590 4.4 $ 644 $ 620 3.9 Operating Store (in thousands)

Square Footage at End of 235 235 — 235 235 — Period

Capital $ 336 $ 351 (4.3) $ 887 $ 820 8.2 Expenditures

Depreciation and $ 424 $ 416 1.9 % $ 1,257 $ 1,265 (0.6) % Amortization ( (1))

__________________________________________________________________ |__________ || |_________________________________________________________________|| | || |_________________________________________________________________|| |(1)|Includes depreciation of distribution centers and tool rental| | |equipment included in Cost of Sales and amortization of | |___|_____________________________________________________________| | |deferred financing costs included in Interest Expense. | |___|_____________________________________________________________| |N/A - Not Applicable || |_________________________________________________________________||

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS ITEMS EXCLUDING CERTAIN ADJUSTMENTS (NON-GAAP)

FOR THE THREE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011

(Unaudited)

(Amounts in Millions Except Per Share Data)

                           Three Months Ended October 28, 2012
                                                        As Adjusted
                           Actuals    Adjustments((1))
                                                        (Non-GAAP)

Cost of Sales              $ 11,863   $ 10              $ 11,853

Gross Profit               $ 6,267    $ (10)            $ 6,277

Total Operating Expenses   $ 4,534    $ 155             $ 4,379

Operating Income           $ 1,733    $ (165)           $ 1,898

Net Earnings               $ 947      $ (165)           $ 1,112

Diluted Earnings Per Share $ 0.63     $ (0.11)          $ 0.74
                           Three Months Ended October 30, 2011
                                                        As Adjusted
                           Actuals    Adjustments
                                                        (Non-GAAP)

Cost of Sales              $ 11,365   $ —         $ 11,365

Gross Profit               $ 5,961    $ —         $ 5,961

Total Operating Expenses   $ 4,346    $ —         $ 4,346

Operating Income           $ 1,615    $ —         $ 1,615

Net Earnings               $ 934      $ —         $ 934

Diluted Earnings Per Share $ 0.60     $ —         $ 0.60

 __________________________________________________________________
|__________                                                        |
|__________________________________________________________________|
|   |                                                              |
|___|______________________________________________________________|
|(1)|Adjustments are comprised of charges related to the closing of|
|   |seven stores in China.                                        |
|___|______________________________________________________________|

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF OCTOBER 28, 2012, OCTOBER 30, 2011 AND JANUARY 29, 2012

(Unaudited)

(Amounts in Millions)
                              October 28,   October 30,   January 29,
                              2012          2011          2012

ASSETS

Cash and Cash Equivalents     $ 2,554       $ 2,234       $ 1,987

Receivables, net              1,645         1,384         1,245

Merchandise Inventories       10,960        10,717        10,325

Other Current Assets          796           1,143         963

Total Current Assets          15,955        15,478        14,520

Property and Equipment, net   24,124        24,532        24,448

Goodwill                      1,141         1,072         1,120

Other Assets                  441           417           430

TOTAL ASSETS                  $ 41,661      $ 41,499      $ 40,518



LIABILITIES AND STOCKHOLDERS'
EQUITY

Accounts Payable              $ 6,010       $ 5,669       $ 4,856

Accrued Salaries and Related  1,311         1,227         1,372
Expenses

Current Installments of       34            44            30
Long-Term Debt

Other Current Liabilities     3,311         3,646         3,118

Total Current Liabilities     10,666        10,586        9,376

Long-Term Debt                10,779        10,739        10,758

Other Long-Term Liabilities   2,478         2,405         2,486

Total Liabilities             23,923        23,730        22,620

Total Stockholders' Equity    17,738        17,769        17,898

TOTAL LIABILITIES AND         $ 41,661      $ 41,499      $ 40,518
STOCKHOLDERS' EQUITY

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011

(Unaudited)

(Amounts in Millions)
                                            Nine Months Ended
                                            October 28,   October 30,
                                            2012          2011

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Earnings                                $ 3,514       $ 3,109

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

Depreciation and Amortization               1,257         1,265

Stock-Based Compensation Expense            158           157

Changes in Working Capital and Other        455           1,160

Net Cash Provided by Operating Activities   5,384         5,691

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital Expenditures                        (887)         (820)

Payments for Businesses Acquired, net       (121)         —

Proceeds from Sale of Business, net         —       101

Proceeds from Sales of Property and         21            36
Equipment

Net Cash Used in Investing Activities       (987)         (683)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from Long-Term Borrowings, net of  —       1,994
discount

Repayments of Long-Term Debt                (23)          (1,021)

Repurchases of Common Stock                 (3,330)       (3,056)

Proceeds from Sales of Common Stock         697           91

Cash Dividends Paid to Stockholders         (1,312)       (1,187)

Other                                       133           (118)

Net Cash Used in Financing Activities       (3,835)       (3,297)

Change in Cash and Cash Equivalents         562           1,711

Effect of Exchange Rate Changes on Cash and 5             (22)
Cash Equivalents

Cash and Cash Equivalents at the Beginning  1,987         545
of the Period

Cash and Cash Equivalents at the End of the $ 2,554       $ 2,234
Period

Financial Community,Diane Dayhoff, Vice President of Investor Relations, 
+1-770-384-2666, diane_dayhoff@homedepot.com; News Media, Paula Drake, 
Director of Corporate Communications, +1-770-384-3439 paula_drake@homedepot.com

http://www.homedepot.com

http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO

PRN Photo Desk, photodesk@prnewswire.com

SOURCE: The Home Depot

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CO: The Home Depot
ST: Georgia
NI: RET ERN 

-0- Nov/13/2012 11:05 GMT