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

ATLANTA, May 15, 2012 /PRNewswire via COMTEX/ --The Home Depot®, the world's largest home improvement retailer, today reported sales of $17.8 billion for the first quarter of fiscal 2012, a 5.9 percent increase from the first quarter of fiscal 2011. Comparable store sales for the first quarter of fiscal 2012 were positive 5.8 percent, and comp sales for U.S. stores were positive 6.1 percent.

Net earnings for the first quarter were $1.0 billion, or $0.68 per diluted share, compared with net earnings of $812 million, or $0.50 per diluted share, in the same period of fiscal 2011. For the first quarter of fiscal 2012, diluted earnings per share increased 36.0 percent from the same period in the prior year.

First quarter of fiscal 2012 results reflect a benefit to earnings, net of tax, of $43 million, or $0.03 per diluted share, related to the termination of the Company's guarantee of a senior secured loan.

"We saw a stronger-than-expected start to the year, driven by record warm weather and continued demand for core products," said Frank Blake, chairman & CEO. "I would like to thank our associates for their hard work and dedication."

Updated Fiscal 2012 Guidance

Based on its year-to-date performance, the Company updated its fiscal 2012 guidance and now expects sales to be up approximately 4.6 percent for the year on a 53-week basis. The Company raised its fiscal 2012 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 17 percent to $2.90 for the year. This earnings-per-share guidance includes the $0.03 per diluted share benefit related to the termination of the Company's guarantee of a senior secured loan, the benefit of the Company's year-to-date share repurchases and the Company's intent to repurchase $2.4 billion in additional shares over the remainder of the year.

On June 6 at 9 a.m. ET, the Company will hold its Investor and Analyst Conference to update the investment community on the long range outlook of the business. All presentations will be webcast live at ir.homedepot.com in the Events & Presentations section.

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 first quarter, the Company operated a total of 2,254 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, Mexico and China. 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 supplemented its reporting with non-GAAP financial measures to reflect the impact of the benefit related to the termination of the Company's guarantee of a third-party senior secured loan. 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 reinvestment plans, net earnings performance, earnings per share, stock-based compensation expense, capital allocation and expenditures, liquidity, the effect of adopting certain accounting standards, return on invested capital, management of our purchasing or customer credit policies, the effect of accounting charges, the ability to issue debt on terms and at rates acceptable to us, store openings and closures, expense leverage, guidance for fiscal 2012 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.

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 ENDED APRIL 29, 2012 AND MAY 1, 2011

(Unaudited)

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






Three Months Ended




April 29,
2012


May 1,
2011


% Increase

(Decrease)

NET SALES

$

17,808


$

16,823


5.9%

Cost of Sales

11,625


10,995


5.7

GROSS PROFIT

6,183


5,828


6.1

Operating Expenses:






Selling, General and Administrative

4,086


4,009


1.9

Depreciation and Amortization

383


397


(3.5)

Total Operating Expenses

4,469


4,406


1.4

OPERATING INCOME

1,714


1,422


20.5

Interest and Other (Income) Expense:






Interest and Investment Income

(5)


(2)


150.0

Interest Expense

156


141


10.6

Other

(67)


--


N/A

Interest and Other, net

84


139


(39.6)

EARNINGS BEFORE PROVISION FOR INCOME TAXES

1,630


1,283


27.0

Provision for Income Taxes

595


471


26.3







NET EARNINGS

$

1,035


$

812


27.5%







Weighted Average Common Shares

1,522


1,599


(4.8)%

BASIC EARNINGS PER SHARE

$

0.68


$

0.51


33.3







Diluted Weighted Average Common Shares

1,531


1,611


(5.0)%

DILUTED EARNINGS PER SHARE

$

0.68


$

0.50


36.0








Three Months Ended



SELECTED HIGHLIGHTS

April 29,
2012


May 1,
2011


% Increase

(Decrease)

Number of Customer Transactions

328.9


316.5


3.9%

Average Ticket (actual)

$

54.51


$

53.35


2.2

Weighted Average Weekly Sales per Operating Store (in thousands)

$

612


$

578


5.9

Square Footage at End of Period

236


235


0.4

Capital Expenditures

$

228


$

199


14.6

Depreciation and Amortization (1)

$

410


$

424


(3.3)%









----------

(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 APRIL 29, 2012 AND MAY 1, 2011

(Unaudited)

(Amounts in Millions Except Per Share Data)




Three Months Ended April 29, 2012


Actuals


Adjustment(1)


As Adjusted

(Non-GAAP)

Operating Income

$

1,714


$

--


$

1,714

Interest and Other, net

84


(67)


151

Net Earnings

$

1,035


$

43


$

992

Diluted Earnings Per Share

$

0.68


$

0.03


$

0.65








Three Months Ended May 1, 2011


Actuals


Adjustment


As Adjusted

(Non-GAAP)

Operating Income

$

1,422


$

--


$

1,422

Interest and Other, net

139


--


139

Net Earnings

$

812


$

--


$

812

Diluted Earnings Per Share

$

0.50


$

--


$

0.50










----------
(1) The Company recognized a benefit in the first quarter of fiscal 2012 resulting from the termination of its guarantee of the HD Supply senior secured loan.

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF APRIL 29, 2012, MAY 1, 2011 AND JANUARY 29, 2012

(Unaudited)

(Amounts in Millions)








April 29,
2012


May 1,
2011


January 29,
2012

ASSETS






Cash and Cash Equivalents

$

3,191



$

1,806



$

1,987


Receivables, net

1,519



1,456



1,245


Merchandise Inventories

11,582



11,694



10,325


Other Current Assets

1,060



1,205



963


Total Current Assets

17,352



16,161



14,520


Property and Equipment, net

24,371



24,993



24,448


Goodwill

1,139



1,209



1,120


Other Assets

438



434



430


TOTAL ASSETS

$

43,300



$

42,797



$

40,518








LIABILITIES AND STOCKHOLDERS' EQUITY






Accounts Payable

$

7,135



$

6,543



$

4,856


Accrued Salaries and Related Expenses

1,263



1,195



1,372


Current Installments of Long-Term Debt

33



43



30


Other Current Liabilities

3,668



3,677



3,118


Total Current Liabilities

12,099



11,458



9,376


Long-Term Debt

10,792



10,720



10,758


Other Long-Term Liabilities

2,434



2,421



2,486


Total Liabilities

25,325



24,599



22,620


Total Stockholders' Equity

17,975



18,198



17,898


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

43,300



$

42,797



$

40,518


THE HOME DEPOT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED APRIL 29, 2012 AND MAY 1, 2011

(Unaudited)

(Amounts in Millions)





Three Months Ended


April 29,
2012


May 1,
2011

CASH FLOWS FROM OPERATING ACTIVITIES:




Net Earnings

$

1,035


$

812

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




Depreciation and Amortization

410


424

Stock-Based Compensation Expense

58


60

Changes in Working Capital and Other

987


802

Net Cash Provided by Operating Activities

2,490


2,098

CASH FLOWS FROM INVESTING ACTIVITIES:




Capital Expenditures

(228)


(199)

Other

7


15

Net Cash Used in Investing Activities

(221)


(184)

CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from Long-Term Borrowings, net of discount

--


1,994

Repayments of Long-Term Debt

(7)


(1,007)

Repurchases of Common Stock

(1,131)


(1,301)

Proceeds from Sales of Common Stock

412


34

Cash Dividends Paid to Stockholders

(444)


(403)

Other

87


19

Net Cash Used in Financing Activities

(1,083)


(664)

Change in Cash and Cash Equivalents

1,186


1,250

Effect of Exchange Rate Changes on Cash and Cash Equivalents

18


11

Cash and Cash Equivalents at the Beginning of the Period

1,987


545

Cash and Cash Equivalents at the End of the Period

$

3,191


$

1,806

SOURCE The Home Depot