ATLANTA, Feb. 25, 2020 /PRNewswire/ -- The
Home Depot®, the world's largest home improvement
retailer, today reported fourth quarter and fiscal 2019
results.
Fourth Quarter 2019
Comparable sales for the fourth quarter of fiscal 2019 increased
5.2 percent, and comparable sales in the U.S. increased 5.3
percent.
Sales for the fourth quarter of fiscal 2019 were $25.8 billion compared to sales of $26.5 billion in the fourth quarter of fiscal
2018. Fiscal 2018 included an extra week of operations compared to
fiscal 2019. The extra week of operations added approximately
$1.7 billion of sales to the fourth
quarter of fiscal 2018.
Net earnings for the fourth quarter of fiscal 2019 were
$2.5 billion, or $2.28 per diluted share, compared to net earnings
of $2.3 billion, or $2.09 per diluted share, in the fourth quarter of
fiscal 2018. The extra week of operations added approximately
$0.21 per diluted share to the fourth
quarter of fiscal 2018.
Fiscal 2019
Comparable sales for fiscal 2019 increased 3.5 percent, and
comparable sales in the U.S. increased 3.8 percent.
Sales for fiscal 2019 were $110.2
billion compared to sales of $108.2
billion in fiscal 2018.
Net earnings for fiscal 2019 were $11.2
billion, or $10.25 per diluted
share, compared to net earnings of $11.1
billion, or $9.73 per diluted
share in fiscal 2018.
"Fiscal 2019 was a record year for our business and one marked
by significant progress as we invest to transform ourselves into
The Home Depot of the future. We had a strong finish to the year as
our fourth quarter results reflect strength in our core business,
solid execution around our holiday events and the overall health of
the consumer," said Craig Menear,
chairman, CEO and president.
"We are now two years into our multi-year investment program and
have more conviction than ever that our strategic initiatives are
creating a value proposition that is unique to the marketplace and
will extend our leadership position for years to come. Through the
second year of our One Home Depot investment program, we have grown
sales by over $9 billion dollars – a
level of growth unmatched in our market. I am proud of the way our
associates continue to focus on our customers, and I want to thank
them for their hard work and dedication in the fourth quarter and
throughout the year."
Dividend Declaration
The Company today announced that its board of directors approved
a 10 percent increase in its quarterly dividend to $1.50 per share, which equates to an annual
dividend of $6.00 per share.
"As a testament to our commitment to create value for our
shareholders and a demonstration of confidence in the business
going forward, the board has increased the dividend for the
eleventh consecutive year," said Richard
McPhail, CFO and executive vice president. The dividend is
payable on March 26, 2020, to
shareholders of record on the close of business on March 12, 2020. This is the 132nd
consecutive quarter the Company has paid a cash dividend.
Fiscal 2020 Guidance
The Company provided the following guidance for fiscal 2020:
- Total sales growth of approximately 3.5 percent to 4.0
percent
- Comparable sales growth of approximately 3.5 percent to 4.0
percent
- Six new stores
- Operating margin of approximately 14.0 percent
- Net interest expense of approximately $1.2 billion
- Effective tax rate assumption of approximately 24.0
percent
- Share repurchases of at least $5.0
billion
- Diluted earnings-per-share growth of approximately 2.0 percent
to $10.45
- Capital spending of approximately $2.8
billion
- Depreciation and amortization expense of approximately
$2.4 billion
- Cash flow from operations of approximately $13.5 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 ir.homedepot.com/events-and-presentations.
At the end of the fourth quarter, the Company operated a total
of 2,291 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs more than 400,000
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 sales; effects of
competition; implementation of store, interconnected retail, supply
chain and technology initiatives; inventory and in-stock positions;
state of the economy; state of the housing and home improvement
markets; state of the credit markets, including mortgages, home
equity loans and consumer credit; impact of tariffs; issues related
to the payment methods we accept; demand for credit offerings;
management of relationships with our associates, suppliers and
vendors; international trade disputes, natural disasters, public
health issues, and other business interruptions that could disrupt
supply or delivery of, or demand for, the Company's products;
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 impact and expected outcome of
investigations, inquiries, claims and litigation; the effect of
accounting charges; the effect of adopting certain accounting
standards; the impact of the Tax Cuts and Jobs Act of 2017 and
other regulatory changes; store openings and closures; guidance for
fiscal 2020 and beyond; financial outlook; and the integration of
acquired companies into our organization and the ability to
recognize the anticipated synergies and benefits of those
acquisitions. 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, dependent on
the actions of third parties, 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 February 3, 2019 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. CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS (Unaudited)
|
|
|
Three Months
Ended (1)
|
|
|
|
Fiscal Year
Ended (1)
|
|
|
|
in millions,
except per share data
|
February 2,
2020
|
|
February 3,
2019
|
|
% Change
|
|
February 2,
2020
|
|
February 3,
2019
|
|
% Change
|
Net sales
|
$
|
25,782
|
|
$
|
26,491
|
|
(2.7)%
|
|
$
|
110,225
|
|
$
|
108,203
|
|
1.9%
|
Cost of
sales
|
17,046
|
|
17,464
|
|
(2.4)
|
|
72,653
|
|
71,043
|
|
2.3
|
Gross
profit
|
8,736
|
|
9,027
|
|
(3.2)
|
|
37,572
|
|
37,160
|
|
1.1
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
4,814
|
|
4,922
|
|
(2.2)
|
|
19,740
|
|
19,513
|
|
1.2
|
Depreciation and
amortization
|
519
|
|
480
|
|
8.1
|
|
1,989
|
|
1,870
|
|
6.4
|
Impairment
loss
|
—
|
|
247
|
|
N/M
|
|
—
|
|
247
|
|
N/M
|
Total operating
expenses
|
5,333
|
|
5,649
|
|
(5.6)
|
|
21,729
|
|
21,630
|
|
0.5
|
Operating
income
|
3,403
|
|
3,378
|
|
0.7
|
|
15,843
|
|
15,530
|
|
2.0
|
Interest and other
(income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
investment income
|
(17)
|
|
(20)
|
|
(15.0)
|
|
(73)
|
|
(93)
|
|
(21.5)
|
Interest
expense
|
309
|
|
269
|
|
14.9
|
|
1,201
|
|
1,051
|
|
14.3
|
Other
|
—
|
|
16
|
|
N/M
|
|
—
|
|
16
|
|
N/M
|
Interest and other,
net
|
292
|
|
265
|
|
10.2
|
|
1,128
|
|
974
|
|
15.8
|
Earnings before
provision for income taxes
|
3,111
|
|
3,113
|
|
(0.1)
|
|
14,715
|
|
14,556
|
|
1.1
|
Provision for income
taxes
|
630
|
|
769
|
|
(18.1)
|
|
3,473
|
|
3,435
|
|
1.1
|
Net
earnings
|
$
|
2,481
|
|
$
|
2,344
|
|
5.8%
|
|
$
|
11,242
|
|
$
|
11,121
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average common shares
|
1,083
|
|
1,116
|
|
(3.0)%
|
|
1,093
|
|
1,137
|
|
(3.9)%
|
Basic earnings per
share
|
$
|
2.29
|
|
$
|
2.10
|
|
9.0
|
|
$
|
10.29
|
|
$
|
9.78
|
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares
|
1,088
|
|
1,121
|
|
(2.9)%
|
|
1,097
|
|
1,143
|
|
(4.0)%
|
Diluted earnings per
share
|
$
|
2.28
|
|
$
|
2.09
|
|
9.1
|
|
$
|
10.25
|
|
$
|
9.73
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
Selected Sales
Data (2) (3)
|
February 2,
2020
|
|
February 3,
2019
|
|
% Change
|
|
February 2,
2020
|
|
February 3,
2019
|
|
% Change
|
Customer transactions
(in millions)
|
369.6
|
|
394.8
|
|
(6.4)%
|
|
1,616.0
|
|
1,620.8
|
|
(0.3)%
|
Average
ticket
|
$
|
68.29
|
|
$
|
65.59
|
|
4.1
|
|
$
|
67.30
|
|
$
|
65.74
|
|
2.4
|
Sales per retail
square foot
|
$
|
425.70
|
|
$
|
414.17
|
|
2.8
|
|
$
|
454.82
|
|
$
|
446.86
|
|
1.8
|
|
—————
|
(1)
|
The three months
ended February 2, 2020 include 13 weeks and the three months ended
February 3, 2019 include 14 weeks. The fiscal
year ended February 2, 2020 includes 52 weeks and the fiscal year
ended February 3, 2019 includes 53 weeks. The additional week
included in three months and fiscal year ended February 3, 2019
added approximately $1.7 billion in net sales and $0.21 in diluted
earnings per share.
|
(2)
|
Selected Sales
Data does not include results for the legacy Interline Brands
business, now operating as a part of The Home Depot
Pro.
|
(3)
|
The additional
week included in the three months and fiscal year ended February 3,
2019 increased customer transactions by 24.5 million,
added $0.01 to average ticket, and increased sales per retail
square foot by $6.87.
|
THE HOME DEPOT,
INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
|
|
in
millions
|
February 2,
2020
|
|
February 3,
2019
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
2,133
|
|
|
$
|
1,778
|
|
Receivables,
net
|
2,106
|
|
|
1,936
|
|
Merchandise
inventories
|
14,531
|
|
|
13,925
|
|
Other current
assets
|
1,040
|
|
|
890
|
|
Total current
assets
|
19,810
|
|
|
18,529
|
|
Net property and
equipment
|
22,770
|
|
|
22,375
|
|
Operating lease
right-of-use assets
|
5,595
|
|
|
—
|
|
Goodwill
|
2,254
|
|
|
2,252
|
|
Other
assets
|
807
|
|
|
847
|
|
Total
assets
|
$
|
51,236
|
|
|
$
|
44,003
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
|
974
|
|
|
$
|
1,339
|
|
Accounts
payable
|
7,787
|
|
|
7,755
|
|
Accrued salaries and
related expenses
|
1,494
|
|
|
1,506
|
|
Current installments
of long-term debt
|
1,839
|
|
|
1,056
|
|
Current operating
lease liabilities
|
828
|
|
|
—
|
|
Other current
liabilities
|
5,453
|
|
|
5,060
|
|
Total current
liabilities
|
18,375
|
|
|
16,716
|
|
Long-term debt,
excluding current installments
|
28,670
|
|
|
26,807
|
|
Long-term operating
lease liabilities
|
5,066
|
|
|
—
|
|
Other
liabilities
|
2,241
|
|
|
2,358
|
|
Total
liabilities
|
54,352
|
|
|
45,881
|
|
Total stockholders'
(deficit) equity
|
(3,116)
|
|
|
(1,878)
|
|
Total liabilities and
stockholders' equity
|
$
|
51,236
|
|
|
$
|
44,003
|
|
THE HOME DEPOT,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited)
|
|
|
Fiscal Year
Ended (1)
|
in
millions
|
February 2,
2020
|
|
February 3,
2019
|
Cash Flows from
Operating Activities:
|
|
|
|
Net
earnings
|
$
|
11,242
|
|
|
$
|
11,121
|
|
Reconciliation of net
earnings to net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
2,296
|
|
|
2,152
|
|
Stock-based
compensation expense
|
251
|
|
|
282
|
|
Impairment
loss
|
—
|
|
|
247
|
|
Changes in working
capital
|
(452)
|
|
|
(687)
|
|
Changes in deferred
income taxes
|
202
|
|
|
26
|
|
Other operating
activities
|
184
|
|
|
(103)
|
|
Net cash provided by
operating activities
|
13,723
|
|
|
13,038
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital expenditures,
net of non-cash capital expenditures
|
(2,678)
|
|
|
(2,442)
|
|
Payments for business
acquired, net
|
—
|
|
|
(21)
|
|
Proceeds from sales
of property and equipment
|
37
|
|
|
33
|
|
Other investing
activities
|
(12)
|
|
|
14
|
|
Net cash used in
investing activities
|
(2,653)
|
|
|
(2,416)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Repayments of
short-term debt, net
|
(365)
|
|
|
(220)
|
|
Proceeds from
long-term debt, net of discounts and premiums
|
3,420
|
|
|
3,466
|
|
Repayments of
long-term debt
|
(1,070)
|
|
|
(1,209)
|
|
Repurchases of common
stock
|
(6,965)
|
|
|
(9,963)
|
|
Proceeds from sales
of common stock
|
280
|
|
|
236
|
|
Cash
dividends
|
(5,958)
|
|
|
(4,704)
|
|
Other financing
activities
|
(176)
|
|
|
(26)
|
|
Net cash used in
financing activities
|
(10,834)
|
|
|
(12,420)
|
|
Change in cash and
cash equivalents
|
236
|
|
|
(1,798)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
119
|
|
|
(19)
|
|
Cash and cash
equivalents at beginning of year
|
1,778
|
|
|
3,595
|
|
Cash and cash
equivalents at end of year
|
$
|
2,133
|
|
|
$
|
1,778
|
|
|
—————
|
(1)
Fiscal year ended February 2, 2020 includes 52 weeks. Fiscal
year ended February 3, 2019 includes 53 weeks.
|
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SOURCE The Home Depot