10-KPeriod: FY2011

HOME DEPOT, INC. Annual Report, Year Ended Jan 30, 2011

Filed March 24, 2011For Securities:HD

Summary

The Home Depot, Inc. (HD) reported solid performance in its fiscal year ending January 30, 2011, demonstrating resilience following a challenging prior year. Net sales increased by 2.8% to $68.0 billion, and comparable store sales saw a positive uptick of 2.9%. This growth was driven by an increase in customer transactions and a slight rise in average ticket price, indicating a recovery in consumer spending for home improvement. The company's strategic initiatives, including enhanced customer service, improved product authority, supply chain efficiencies, and an interconnected retail strategy, appear to be yielding positive results. Earnings from continuing operations increased significantly, and the company continued its commitment to returning value to shareholders through share repurchases and dividend payments. Despite ongoing economic uncertainties, Home Depot's diversified customer base and focus on value positions it well for future performance.

Financial Highlights

28 data points
Beta

Revenue

$68.00B

34.3% Gross Margin

Net Income

$3.34B

4.9% Net Margin

EPS (Diluted)

$2.01

Free Cash Flow

$4.58B

Financial Statements
Beta
Revenue$68.00B
Cost of Revenue$44.69B
Gross Profit$23.30B
SG&A Expenses$15.85B
Operating Expenses$17.46B
Operating Income$5.84B
Interest Expense$530.00M
Net Income$3.34B
EPS (Basic)$2.03
EPS (Diluted)$2.01
Shares Outstanding (Basic)1.65B
Shares Outstanding (Diluted)1.66B

Key Highlights

  • 1Net sales grew 2.8% to $68.0 billion in fiscal year 2010.
  • 2Comparable store sales increased by 2.9%, indicating a recovery in demand.
  • 3Diluted Earnings per Share from Continuing Operations rose to $2.01 from $1.55 in the prior year.
  • 4The company returned $2.6 billion to shareholders through share repurchases and $1.6 billion in dividends.
  • 5Key initiatives focused on customer service, product authority, productivity, and interconnected retail are showing positive impacts.
  • 6The company ended fiscal 2010 with 2,248 stores globally.
  • 7A $51 million charge was recorded related to the extension of a guarantee for HD Supply, Inc.

Frequently Asked Questions

Home Depot reported a net sales increase of 2.8% to $68.0 billion and comparable store sales growth of 2.9%. Diluted Earnings per Share from Continuing Operations improved to $2.01 from $1.55 in the prior fiscal year. The company also generated $4.6 billion in cash flow from operations.

The company repurchased approximately $2.6 billion worth of its common stock and paid $1.6 billion in dividends to shareholders. As of January 30, 2011, there was $9.9 billion remaining under its share repurchase authorization.

Home Depot focused on four key initiatives: enhancing customer service through associate training and new handheld devices (FIRST Phones), improving product authority via merchandising transformation and exclusive brands, driving productivity and efficiency through supply chain optimization (like Rapid Deployment Centers) and disciplined capital allocation, and developing an interconnected retail experience with a focus on a best-in-class website and a planned 'buy online, pick up in store' feature.

Key risks include sustained economic uncertainty impacting demand for products and services, intense competition affecting prices and market share, the ability to adapt to evolving consumer needs and trends, challenges in attracting and retaining qualified employees, volatility in commodity prices, reliance on third-party suppliers, potential disruptions in the supply chain, and increasing regulatory costs. The company also noted risks associated with international operations and managing its installation service business.