The Home Depot Announces Fourth Quarter and Fiscal 2012 Results; Announces $17 Billion Share Repurchase Authorization; Increases
The Home Depot Announces Fourth Quarter and Fiscal 2012 Results; Announces $17 Billion Share Repurchase Authorization; Increases Quarterly Dividend by 34 Percent and Provides Fiscal Year 2013 Guidance
ATLANTA, Feb. 26, 2013 /CNW/ - The Home Depot(®), the world's largest home improvement retailer, today reported sales of $18.2 billion for the fourth quarter of fiscal 2012, a 13.9 percent increase from the fourth quarter of fiscal 2011. Comparable store sales for the fourth quarter of fiscal 2012 increased 7.0 percent, and comp sales for U.S. stores were 7.1 percent.
(Logo: http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO )
The fourth quarter of fiscal 2012 consisted of 14 weeks compared with 13 weeks for the prior year. The 14th week added approximately $1.2 billion in sales for the quarter and the year. Excluding the 14th week, fourth quarter sales increased by 6.3 percent compared to the fourth quarter of fiscal 2011. The additional week is not included in comparable store sales results for the quarter or the year.
Net earnings for the fourth quarter were $1.0 billion, or $0.68 per diluted share, compared with net earnings of $774 million, or $0.50 per diluted share, in the same period of fiscal 2011. These results reflect a favorable adjustment to a previously announced China store closing charge of approximately $20 million, net of tax, or $0.01 per diluted share. The 14th week increased earnings per diluted share by approximately $0.07 for the quarter and the year.
Fiscal 2012
Sales for fiscal 2012 were $74.8 billion, an increase of 6.2 percent from fiscal 2011. Total company comparable store sales for the year increased 4.6 percent, and comp sales for U.S. stores were 4.9 percent for the year. Excluding the 53rd week, sales for fiscal 2012 increased by 4.5 percent from fiscal 2011.
Earnings per diluted share in fiscal 2012 were $3.00, compared to $2.47 per diluted share in fiscal 2011, an increase of 21.5 percent. These results reflect a nonrecurring charge of approximately $145 million, net of tax, or $0.10 per diluted share, associated with the China store closings. On an adjusted basis, earnings per diluted share in fiscal 2012 were $3.10, compared to $2.47 per diluted share in fiscal 2011, an increase of 25.5 percent.
"We ended the year with a strong performance as our business benefited from a continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy," said Frank Blake, chairman & CEO. "I'd like to thank our associates for their hard work and dedication."
Capital Allocation Strategy
The Company today announced that its board of directors declared a 34 percent increase in its quarterly dividend to $0.39 cents per share. "The board increased the dividend for the fourth time in as many years. In line with our targeted dividend payout of 50 percent, the dividend increase is a testament to our commitment to create value for our shareholders," said Blake. The dividend is payable on March 28, 2013, to shareholders of record on the close of business on March 14, 2013. This is the 104th consecutive quarter the Company has paid a cash dividend.
The board of directors also authorized a $17.0 billion share repurchase program replacing its previous authorization. Since 2002 and through February 3, 2013, the Company has returned more than $37.5 billion of cash to shareholders through repurchases, repurchasing approximately 1 billion shares.
Combined with today's announcements, the Company reiterated its capital allocation principles:
-- Dividend Principle: Targeting a dividend payout ratio of
approximately 50 percent.
-- Share Repurchase Principle: After meeting the needs of the
business, will use excess cash to repurchase shares, with the
intent of completing $17.0 billion of share repurchases by the
end of fiscal 2015.
-- Return on Invested Capital Principle: Maintain a high return on
invested capital, with a goal of reaching 24 percent by the end
of fiscal 2015.
Fiscal 2013 Guidance
The Company provided the following guidance for fiscal 2013, a 52-week year
compared to fiscal 2012, a 53-week year:
-- Sales growth of approximately 2 percent
-- Comparable store sales growth of approximately 3 percent
-- Nine new stores
-- Moderate gross margin expansion
-- Operating margin expansion of approximately 65 basis points
-- Tax rate of approximately 37 percent
-- Share repurchases of approximately $4.5 billion
-- Diluted earnings-per-share growth after anticipated share
repurchases of approximately 12 percent to $3.37
-- Capital spending of approximately $1.5 billion
-- Depreciation and amortization expense of approximately $1.7
billion
-- Cash flow from the business of approximately $7.2 billion
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 fourth quarter, the Company operated a total of 2,256 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 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 2013 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 FISCAL YEARS ENDED FEBRUARY 3, 2013 AND JANUARY 29, 2012
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
Three Months Ended( Fiscal Year Ended((2))
(1)) % Increase % Increase
February January February 3, January (Decrease)
3, 2013 29, 2012 2013 29, 2012
NET SALES $ 18,246 $ 16,014 13.9 % $ 74,754 $ 70,395 6.2 %
Cost of Sales 11,880 10,417 14.0 48,912 46,133 6.0
GROSS PROFIT 6,366 5,597 13.7 25,842 24,262 6.5
Operating
Expenses:
Selling,
General and 4,217 3,877 8.8 16,508 16,028 3.0
Administrative
Depreciation
and 399 390 2.3 1,568 1,573 (0.3)
Amortization
Total
Operating 4,616 4,267 8.2 18,076 17,601 2.7
Expenses
OPERATING 1,750 1,330 31.6 7,766 6,661 16.6
INCOME
Interest and
Other (Income)
Expense:
Interest and
Investment (6) (4) 50.0 (20) (13) 53.8
Income
Interest 166 154 7.8 632 606 4.3
Expense
Other — — — (67) — N/A
Interest and 160 150 6.7 545 593 (8.1)
Other, net
EARNINGS
BEFORE 1,590 1,180 34.7 7,221 6,068 19.0
PROVISION FOR
INCOME TAXES
Provision for 569 406 40.1 2,686 2,185 22.9
Income Taxes
NET EARNINGS $ 1,021 $ 774 31.9 % $ 4,535 $ 3,883 16.8 %
Weighted
Average Common 1,479 1,525 (3.0) % 1,499 1,562 (4.0) %
Shares
BASIC EARNINGS $ 0.69 $ 0.51 35.3 $ 3.03 $ 2.49 21.7
PER SHARE
Diluted
Weighted 1,491 1,535 (2.9) % 1,511 1,570 (3.8) %
Average Common
Shares
DILUTED
EARNINGS PER $ 0.68 $ 0.50 36.0 $ 3.00 $ 2.47 21.5
SHARE
Three Months Ended( Fiscal Year Ended((2))
(1)) % Increase % Increase
SELECTED February January (DecreasFebruary January (Decrease)
HIGHLIGHTS 3, 2013 29, 2012 3, 2013 29,
2012
Number of
Customer 329.1 303.0 8.6 % 1,364.0 1,317.5 3.5 %
Transactions
Average Ticket $ 55.46 $ 52.54 5.6 $ 54.89 $ 53.28 3.0
(actual)
Weighted
Average Weekly
Sales
$ 580 $ 544 6.6 $ 627 $ 601 4.3 per Operating Store (in thousands)
Square Footage at End of 235 235 — 235 235 — Period
Capital $ 425 $ 401 6.0 $ 1,312 $ 1,221 7.5 Expenditures
Depreciation and $ 427 $ 417 2.4 % $ 1,684 $ 1,682 0.1 % Amortization( (3))
(1) Three months ended February 3, 2013 includes 14 weeks. Three months ended January 29, 2012 includes 13 weeks.
(2) Fiscal year ended February 3, 2013 includes 53 weeks. Fiscal year ended January 29, 2012 includes 52 weeks.
(3) 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 AND FISCAL YEAR ENDED FEBRUARY 3, 2013
(Unaudited)
(Amounts in Millions Except Per Share Data)
Three Months Ended February 3, 2013((1))
China Store As Adjusted
Actuals Closings((3))
(Non-GAAP)
Gross Profit $ 6,366 $ — $ 6,366
Total Operating Expenses 4,616 (20) 4,636
Operating Income 1,750 20 1,730
Net Earnings 1,021 20 1,001
Diluted Earnings Per Share $ 0.68 $ 0.01 $ 0.67
Fiscal Year Ended February 3, 2013((2))
China Store As Adjusted
Actuals Closings((3))
(Non-GAAP)
Gross Profit $ 25,842 $ (10) $ 25,852
Total Operating Expenses 18,076 135 17,941
Operating Income 7,766 (145) 7,911
Net Earnings 4,535 (145) 4,680
Diluted Earnings Per Share $ 3.00 $ (0.10) $ 3.10
(1) Three months ended February 3, 2013 includes 14 weeks.
(2) Fiscal year ended February 3, 2013 includes 53 weeks.
(3) Adjustments are related to the closing of seven stores in
China.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF FEBRUARY 3, 2013 AND JANUARY 29, 2012
(Unaudited)
(Amounts in Millions)
February 3, January 29,
2013 2012
ASSETS
Cash and Cash Equivalents $ 2,494 $ 1,987
Receivables, net 1,395 1,245
Merchandise Inventories 10,710 10,325
Other Current Assets 773 963
Total Current Assets 15,372 14,520
Property and Equipment, net 24,069 24,448
Goodwill 1,170 1,120
Other Assets 473 430
TOTAL ASSETS $ 41,084 $ 40,518
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable $ 5,376 $ 4,856
Accrued Salaries and Related Expenses 1,414 1,372
Current Installments of Long-Term Debt 1,321 30
Other Current Liabilities 3,351 3,118
Total Current Liabilities 11,462 9,376
Long-Term Debt 9,475 10,758
Other Long-Term Liabilities 2,370 2,486
Total Liabilities 23,307 22,620
Total Stockholders' Equity 17,777 17,898
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 41,084 $ 40,518
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR FISCAL YEARS ENDED FEBRUARY 3, 2013 AND JANUARY 29, 2012
(Unaudited)
(Amounts in Millions)
Fiscal Year Ended((1))
February 3, January 29,
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings $ 4,535 $ 3,883
Reconciliation of Net Earnings to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 1,684 1,682
Stock-Based Compensation Expense 218 215
Changes in Working Capital and Other 538 871
Net Cash Provided by Operating Activities 6,975 6,651
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (1,312) (1,221)
Payments for Businesses Acquired, net (170) (65)
Proceeds from Sale of Business, net — 101
Proceeds from Sales of Property and Equipment 50 56
Net Cash Used in Investing Activities (1,432) (1,129)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Long-Term Borrowings, net of — 1,994
discount
Repayments of Long-Term Debt (32) (1,028)
Repurchases of Common Stock (3,984) (3,470)
Proceeds from Sales of Common Stock 784 306
Cash Dividends Paid to Stockholders (1,743) (1,632)
Other (59) (218)
Net Cash Used in Financing Activities (5,034) (4,048)
Change in Cash and Cash Equivalents 509 1,474
Effect of Exchange Rate Changes on Cash and (2) (32)
Cash Equivalents
Cash and Cash Equivalents at the Beginning of 1,987 545
the Period
Cash and Cash Equivalents at the End of the $ 2,494 $ 1,987
Period
(1) Fiscal year ended February 3, 2013 includes 53 weeks. Fiscal year
ended January 29, 2012 includes 52 weeks.
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
SOURCE: The Home Depot
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CO: The Home Depot
ST: Georgia
NI: RET CST ERN CONF DIV
-0- Feb/26/2013 11:27 GMT
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