01—Abstract
Summary
Summary of the 10-K filed March 24, 2011. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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.
02—Key points
Key Highlights
- Net sales grew 2.8% to $68.0 billion in fiscal year 2010.
- Comparable store sales increased by 2.9%, indicating a recovery in demand.
- Diluted Earnings per Share from Continuing Operations rose to $2.01 from $1.55 in the prior year.
- The company returned $2.6 billion to shareholders through share repurchases and $1.6 billion in dividends.
- Key initiatives focused on customer service, product authority, productivity, and interconnected retail are showing positive impacts.
- The company ended fiscal 2010 with 2,248 stores globally.
- A $51 million charge was recorded related to the extension of a guarantee for HD Supply, Inc.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Home Depot, Inc. kept $0.05.
- Revenue$68.00B100.0%
- Cost of revenue−$44.69B65.7%
- Gross profit$23.30B34.3%
- Operating costs−$17.46B25.7%
- Operating income$5.84B8.6%
- Interest, other & tax−$2.50B3.7%
- Net income$3.34B4.9%
Where FY2011 revenue went
$68.00B- Cost of revenue: $44.69B, 66% of revenue
- SG&A: $15.85B, 23% of revenue
- Net income: $3.34B, 4.9% of revenue
- Other operating costs: $1.62B, 2.4% of revenue
- Interest, other & tax: $2.50B, 3.7% of revenue
Kept 4.9% as net incomeNet income $3.34B · 4.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed March 24, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $68.00B$66.18B | +2.8% |
| Cost of Revenue | $44.69B$43.76B | +2.1% |
| Gross Profit | $23.30B$22.41B | +4.0% |
| SG&A Expenses | $15.85B$15.90B | −0.3% |
| Operating Expenses | $17.46B$17.61B | −0.8% |
| Operating Income | $5.84B$4.80B | +21.6% |
| Interest Expense | $530.00M$676.00M | −21.6% |
| Net Income | $3.34B$2.66B | +25.4% |
| EPS (Basic) | $2.03$1.58 | +28.5% |
| EPS (Diluted) | $2.01$1.57 | +28.0% |
| Shares Outstanding (Basic) | 1.65B1.68B | −2.1% |
| Shares Outstanding (Diluted) | 1.66B1.69B | −2.0% |
05—Questions
Frequently Asked Questions
What was the overall financial performance of Home Depot in fiscal year 2010?
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.
How did Home Depot return value to shareholders during fiscal year 2010?
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.
What are the key strategic initiatives that Home Depot focused on in fiscal year 2010?
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.
What are the main risks facing Home Depot according to the filing?
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.
06—Continue