ATLANTA, Feb. 20, 2018 /CNW/ -- The Home
Depot®, the world's largest home improvement retailer,
today reported sales of $23.9 billion
for the fourth quarter of fiscal 2017, a 7.5 percent increase from
the fourth quarter of fiscal 2016. Comparable store sales for the
fourth quarter of fiscal 2017 were positive 7.5 percent, and comp
sales for U.S. stores were positive 7.2 percent.
Net earnings for the fourth quarter of fiscal 2017 were
$1.8 billion, or $1.52 per diluted share, compared with net
earnings of $1.7 billion, or
$1.44 per diluted share, in the same
period of fiscal 2016. For the fourth quarter of fiscal 2017,
diluted earnings per share increased 5.6 percent from the same
period in the prior year.
On January 25, 2018, the Company
announced that it expected the impact of the Tax Cuts and Jobs Act
of 2017 to result in an additional net tax expense of approximately
$150 million. The provisional amount
recorded in the fourth quarter was $127
million. This charge, coupled with the one-time bonus
payment to hourly associates that was also announced on
January 25, 2018, negatively impacted
fourth quarter and fiscal 2017 diluted earnings per share by
approximately $0.17.
Fiscal 2017
Sales for fiscal 2017 were $100.9
billion, an increase of 6.7 percent from fiscal 2016. Total
company comparable store sales for fiscal 2017 increased 6.8
percent, and comp sales for U.S. stores were positive 6.9 percent
for the year.
Earnings per diluted share in fiscal 2017 were $7.29, compared to $6.45 per diluted share in fiscal 2016, an
increase of 13.0 percent.
"Our ongoing commitment to enhance the interconnected retail
experience for our customers, provide localized and innovative
product, and deliver best in class productivity resulted in record
sales and net earnings for 2017," said Craig Menear, chairman, CEO and president. "I
would like to thank our associates for their solid execution and
exceptional work in service to our customers."
Dividend Declaration
The Company today announced that its board of directors declared
a 15.7 percent increase in its quarterly dividend to $1.03 per share. "As a testament to our
commitment to create value for our shareholders and our positive
outlook for the business, the board has increased the dividend for
the ninth consecutive year," said Menear. The dividend is payable
on March 22, 2018, to shareholders of
record on the close of business on March 8,
2018. This is the 124th consecutive quarter the
Company has paid a cash dividend.
Fiscal 2018 Guidance
The Company will have 53 weeks of operating results in fiscal
2018 and provides the following guidance for fiscal 2018:
- Sales growth of approximately 6.5 percent including the
53rd week
- Comparable store sales growth of approximately 5.0 percent for
the 52-week period
- 53rd week projected to add approximately
$1.6 billion to total sales
- Three new stores
- Gross margin of approximately 34.0 percent
- Operating margin of approximately 14.5 percent
- Tax rate of approximately 26.0 percent
- Share repurchases of approximately $4.0
billion
- 53-week diluted earnings-per-share growth, after anticipated
share repurchases, of approximately 28.0 percent to $9.31
-
- 53rd week expected to contribute approximately
$0.19 of diluted earnings per
share
- Capital spending of approximately $2.5
billion
- Depreciation and amortization expense of approximately
$2.1 billion
- Cash flow from the business of approximately $14.1 billion
The Company plans to adopt ASU No. 2014-09, which pertains to
revenue recognition, in the first quarter of fiscal 2018. The
Company will update its fiscal 2018 guidance to reflect the impact
of this accounting change during its first quarter earnings call in
May. The Company does not expect the accounting change to have a
material impact on its fiscal 2018 sales or operating margin
guidance.
Long-Term Financial Targets
Today the Company reaffirms and updates its fiscal 2020
financial targets as follows:
Reaffirms:
- Total sales ranging from approximately $115 billion to approximately $120 billion
- Compounded annual sales growth rate ranging from approximately
4.5 percent to approximately 6.0 percent
- Operating margin ranging from approximately 14.4 percent to
approximately 15.0 percent
- Annual average capital spending of approximately 2.5 percent of
sales
Updates:
- Return on invested capital target of more than 40 percent. Note
that the return on invested capital target has been updated to
reflect the impact of the Tax Cuts and Jobs Act of 2017
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 2,284 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 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, supply
chain and technology 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; the impact of the
Tax Cuts and Jobs Act of 2017; store openings and closures;
guidance for fiscal 2018 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 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,
2017 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
|
|
|
|
Fiscal Year
Ended
|
|
|
in millions,
except per share data and as noted
|
January 28,
2018
|
|
January 29,
2017
|
|
% Change
|
|
January 28,
2018
|
|
January 29,
2017
|
|
% Change
|
Net sales
|
$
|
23,883
|
|
|
$
|
22,207
|
|
|
7.5
|
%
|
|
$
|
100,904
|
|
|
$
|
94,595
|
|
|
6.7
|
%
|
Cost of
sales
|
15,790
|
|
|
14,654
|
|
|
7.8
|
|
|
66,548
|
|
|
62,282
|
|
|
6.8
|
|
Gross
profit
|
8,093
|
|
|
7,553
|
|
|
7.1
|
|
|
34,356
|
|
|
32,313
|
|
|
6.3
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
4,440
|
|
|
4,183
|
|
|
6.1
|
|
|
17,864
|
|
|
17,132
|
|
|
4.3
|
|
Depreciation and
amortization
|
464
|
|
|
443
|
|
|
4.7
|
|
|
1,811
|
|
|
1,754
|
|
|
3.2
|
|
Total
operating expenses
|
4,904
|
|
|
4,626
|
|
|
6.0
|
|
|
19,675
|
|
|
18,886
|
|
|
4.2
|
|
Operating
income
|
3,189
|
|
|
2,927
|
|
|
9.0
|
|
|
14,681
|
|
|
13,427
|
|
|
9.3
|
|
Interest and other
(income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
investment income
|
(23)
|
|
|
(11)
|
|
|
N/M
|
|
|
(74)
|
|
|
(36)
|
|
|
N/M
|
|
Interest
expense
|
269
|
|
|
246
|
|
|
9.3
|
|
|
1,057
|
|
|
972
|
|
|
8.7
|
|
Interest
and other, net
|
246
|
|
|
235
|
|
|
4.7
|
|
|
983
|
|
|
936
|
|
|
5.0
|
|
Earnings before
provision for income taxes
|
2,943
|
|
|
2,692
|
|
|
9.3
|
|
|
13,698
|
|
|
12,491
|
|
|
9.7
|
|
Provision for income
taxes
|
1,164
|
|
|
948
|
|
|
22.8
|
|
|
5,068
|
|
|
4,534
|
|
|
11.8
|
|
Net
earnings
|
$
|
1,779
|
|
|
$
|
1,744
|
|
|
2.0
|
%
|
|
$
|
8,630
|
|
|
$
|
7,957
|
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average common shares
|
1,160
|
|
|
1,206
|
|
|
(3.8)
|
%
|
|
1,178
|
|
|
1,229
|
|
|
(4.1)
|
%
|
Basic earnings per
share
|
$
|
1.53
|
|
|
$
|
1.45
|
|
|
5.5
|
|
|
$
|
7.33
|
|
|
$
|
6.47
|
|
|
13.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares
|
1,167
|
|
|
1,211
|
|
|
(3.6)
|
%
|
|
1,184
|
|
|
1,234
|
|
|
(4.1)
|
%
|
Diluted earnings per
share
|
$
|
1.52
|
|
|
$
|
1.44
|
|
|
5.6
|
|
|
$
|
7.29
|
|
|
$
|
6.45
|
|
|
13.0
|
|
|
|
|
|
|
|
|
|
Selected Sales
Data (1)
|
|
|
|
|
|
|
|
|
|
|
|
Customer
transactions
|
366.5
|
|
|
359.2
|
|
|
2.0
|
%
|
|
1,578.6
|
|
|
1,544.0
|
|
|
2.2
|
%
|
Average ticket
(actual)
|
$
|
64.00
|
|
|
$
|
60.65
|
|
|
5.5
|
|
|
$
|
63.06
|
|
|
$
|
60.35
|
|
|
4.5
|
|
Sales per square foot
(actual)
|
394.87
|
|
|
366.25
|
|
|
7.8
|
|
|
417.02
|
|
|
390.78
|
|
|
6.7
|
|
|
|
(1) Selected Sales Data does not
include results for Interline Brands, Inc., which was acquired in
fiscal 2015.
|
N/M - Not
Meaningful
|
THE HOME DEPOT,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
in
millions
|
January 28,
2018
|
|
January 29,
2017
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
3,595
|
|
|
$
|
2,538
|
|
Receivables,
net
|
1,952
|
|
|
2,029
|
|
Merchandise
inventories
|
12,748
|
|
|
12,549
|
|
Other current
assets
|
638
|
|
|
608
|
|
Total current
assets
|
18,933
|
|
|
17,724
|
|
Net property and
equipment
|
22,075
|
|
|
21,914
|
|
Goodwill
|
2,275
|
|
|
2,093
|
|
Other
assets
|
1,246
|
|
|
1,235
|
|
Total
assets
|
$
|
44,529
|
|
|
$
|
42,966
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Short-term
debt
|
$
|
1,559
|
|
|
$
|
710
|
|
Accounts
payable
|
7,244
|
|
|
7,000
|
|
Accrued salaries and
related expenses
|
1,640
|
|
|
1,484
|
|
Current installments
of long-term debt
|
1,202
|
|
|
542
|
|
Other current
liabilities
|
4,549
|
|
|
4,397
|
|
Total current
liabilities
|
16,194
|
|
|
14,133
|
|
Long-term debt,
excluding current installments
|
24,267
|
|
|
22,349
|
|
Other
liabilities
|
2,614
|
|
|
2,151
|
|
Total
liabilities
|
43,075
|
|
|
38,633
|
|
Total stockholders'
equity
|
1,454
|
|
|
4,333
|
|
Total liabilities and
stockholders' equity
|
$
|
44,529
|
|
|
$
|
42,966
|
|
THE HOME DEPOT,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Fiscal Year
Ended
|
in
millions
|
January 28,
2018
|
|
January 29,
2017
|
Cash Flows From
Operating Activities:
|
|
|
|
Net
earnings
|
$
|
8,630
|
|
|
$
|
7,957
|
|
Reconciliation of net
earnings to net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
2,062
|
|
|
1,973
|
|
Stock-based
compensation expense
|
273
|
|
|
267
|
|
Changes in working
capital and other, net of acquisition effects
|
1,066
|
|
|
(414)
|
|
Net cash
provided by operating activities
|
12,031
|
|
|
9,783
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Capital expenditures,
net of non-cash capital expenditures
|
(1,897)
|
|
|
(1,621)
|
|
Payments for business
acquired, net
|
(374)
|
|
|
—
|
|
Proceeds from sales
of property and equipment
|
47
|
|
|
38
|
|
Other investing
activities
|
(4)
|
|
|
—
|
|
Net cash used
in investing activities
|
(2,228)
|
|
|
(1,583)
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Proceeds from
short-term debt, net
|
850
|
|
|
360
|
|
Proceeds from
long-term debt, net of discounts
|
2,991
|
|
|
4,959
|
|
Repayments of
long-term debt
|
(543)
|
|
|
(3,045)
|
|
Repurchases of common
stock
|
(8,000)
|
|
|
(6,880)
|
|
Proceeds from sales
of common stock
|
255
|
|
|
218
|
|
Cash
dividends
|
(4,212)
|
|
|
(3,404)
|
|
Other financing
activities
|
(211)
|
|
|
(78)
|
|
Net cash used
in financing activities
|
(8,870)
|
|
|
(7,870)
|
|
Change in cash and
cash equivalents
|
933
|
|
|
330
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
124
|
|
|
(8)
|
|
Cash and cash
equivalents at beginning of year
|
2,538
|
|
|
2,216
|
|
Cash and cash
equivalents at end of year
|
$
|
3,595
|
|
|
$
|
2,538
|
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/the-home-depot-announces-fourth-quarter-and-fiscal-2017-results-increases-quarterly-dividend-by-157-percent-provides-fiscal-2018-guidance-reaffirms-fiscal-2020-sales-and-operating-margin-targets-updates-fiscal-2020-return-on--300600874.html
SOURCE The Home Depot