01—Abstract
Summary
Summary of the 10-K filed April 3, 2008. Cited figures are marked; the original filing is the authoritative source.
Home Depot, Inc. (HD) filed its 2008 10-K report, reflecting performance through the fiscal year ended February 2, 2008.
The company, the world's largest home improvement retailer, reported a decrease in Net Sales to $77.3 billiona from $79.0 billion in the prior year, attributed to a challenging housing and home improvement market. Net earnings for the year were $4.4 billion, a decline from $5.8 billion in fiscal 2007. This period was marked by strategic shifts, including the sale of HD Supply for $8.3 billion and significant share repurchases as part of a $22.5 billion recapitalization plan.
Management highlighted investments in five key operating priorities: associate engagement, product excitement, shopping environment, product availability, and serving the professional customer. The company's outlook for fiscal 2008 projected further declines in Net Sales and Diluted Earnings Per Share, signaling continued market softness.
Despite these headwinds, Home Depot continued to invest in store modernization and technology initiatives to enhance customer experience and operational efficiency. The report details substantial share repurchases funded by operating cash flow and the proceeds from the HD Supply sale, underscoring a commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Home Depot reported a net sales decrease of 2.1% to $77.3 billion for fiscal year 2007, primarily due to a downturn in the housing and home improvement markets.
- Net earnings declined to $4.4 billion in fiscal 2007 from $5.8 billion in fiscal 2006.
- The company completed the sale of HD Supply for $8.3 billion in net proceeds on August 30, 2007.
- Home Depot engaged in significant share repurchases, totaling $10.8 billion in fiscal 2007, as part of a $22.5 billion recapitalization plan.
- Comparable store sales decreased by 6.7% in fiscal 2007, driven by lower customer transactions and a decrease in average ticket size.
- The company opened 110 new stores in fiscal 2007, bringing the total store count to 2,234.
- Management expressed concern about continued market softness in fiscal 2008, projecting a 4-5% decline in net sales and a 19-24% decrease in diluted earnings per share from continuing operations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, Home Depot, Inc. kept $0.06.
- Revenue$77.35B100.0%
- Cost of revenue−$51.35B66.4%
- Gross profit$26.00B33.6%
- Operating costs−$18.75B24.2%
- Operating income$7.24B9.4%
- Interest, other & tax−$2.85B3.7%
- Net income$4.39B5.7%
Where FY2008 revenue went
$77.35B- Cost of revenue: $51.35B, 66% of revenue
- SG&A: $17.05B, 22% of revenue
- Net income: $4.39B, 5.7% of revenue
- Other operating costs: $1.70B, 2.2% of revenue
- Interest, other & tax: $2.85B, 3.7% of revenue
Kept 5.7% as net incomeNet income $4.39B · 5.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2008filed April 3, 2008Financial Statements
| Revenue | $77.35B |
| Cost of Revenue | $51.35B |
| Gross Profit | $26.00B |
| SG&A Expenses | $17.05B |
| Operating Expenses | $18.75B |
| Operating Income | $7.24B |
| Interest Expense | $696.00M |
| Net Income | $4.39B |
| EPS (Basic) | $2.38 |
| EPS (Diluted) | $2.37 |
| Shares Outstanding (Basic) | 1.85B |
| Shares Outstanding (Diluted) | 1.86B |
05—Questions
Frequently Asked Questions
What was Home Depot's financial performance in fiscal year 2007?
In fiscal year 2007, Home Depot experienced a decrease in Net Sales to $77.3 billion and a decline in Net Earnings to $4.4 billion, compared to $79.0 billion and $5.8 billion in the prior year, respectively. This performance was impacted by a soft housing and home improvement market.
What significant strategic actions did Home Depot take in fiscal year 2007?
The most significant strategic action was the sale of HD Supply for $8.3 billion in net proceeds on August 30, 2007. Additionally, the company continued its aggressive share repurchase program, repurchasing approximately $10.8 billion of its common stock.
What is Home Depot's outlook for fiscal year 2008?
Management anticipates continued market softness in fiscal 2008, projecting a decline in Net Sales of 4% to 5% and a decrease in Diluted Earnings Per Share from Continuing Operations of approximately 19% to 24%.
How did the sale of HD Supply impact Home Depot's financial statements?
The sale of HD Supply resulted in $8.3 billion in net proceeds and is reported as a discontinued operation in the Consolidated Statements of Earnings for all periods presented. This also led to a significant reduction in receivables and goodwill on the balance sheet.
06—Continue