10-KPeriod: FY2020

HOME DEPOT, INC. Annual Report, Year Ended Feb 2, 2020

Filed March 25, 2020For Securities:HD

Summary

The Home Depot, Inc.'s 2020 10-K filing highlights a year of robust sales and earnings, demonstrating resilience in the home improvement sector. The company continued its "One Home Depot" strategic initiative, investing significantly in interconnected customer experiences, supply chain enhancements, and associate development. This multi-year investment program aims to create a seamless blend of physical and digital retail channels, catering to both DIY and professional customers. The company also emphasized its commitment to shareholder returns through dividends and share repurchases, underscoring a focus on creating value for its investors. Despite a dynamic retail landscape, The Home Depot maintained its market leadership. The filing also touches upon the early stages of the COVID-19 pandemic, noting its potential impact on supply chains and operations, though the full extent was yet to be determined at the time of filing. The company's strong financial position, operational efficiency, and strategic investments position it to navigate future challenges and capitalize on growth opportunities.

Financial Highlights

50 data points
Beta

Revenue

$110.22B

34.1% Gross Margin

Net Income

$11.24B

10.2% Net Margin

EPS (Diluted)

$10.25

Total Assets

$51.24B

Cash & Equivalents

$2.13B

Free Cash Flow

$13.69B

Financial Statements
Beta
Revenue$110.22B
Cost of Revenue$72.65B
Gross Profit$37.57B
SG&A Expenses$19.74B
Operating Expenses$21.73B
Operating Income$15.84B
Interest Expense$1.20B
Net Income$11.24B
EPS (Basic)$10.29
EPS (Diluted)$10.25
Shares Outstanding (Basic)1.09B
Shares Outstanding (Diluted)1.10B

Key Highlights

  • 1The company is executing an $11 billion multi-year investment program focused on creating a "One Home Depot" interconnected customer experience, blending digital and physical retail.
  • 2Net sales reached $110.2 billion in fiscal 2019, with net earnings of $11.2 billion, or $10.25 per diluted share.
  • 3Online sales represented 9.3% of net sales and grew by 19.4% in fiscal 2019, indicating strong e-commerce performance.
  • 4The Home Depot continues to invest in its supply chain, with approximately $1.2 billion allocated to its "One Supply Chain" network for faster and more efficient delivery capabilities.
  • 5The company returned significant value to shareholders, with $7.0 billion in share repurchases and $6.0 billion in cash dividends during fiscal 2019.
  • 6The filing acknowledges the emerging impact of COVID-19, noting potential disruptions to supply chains and operations, and the company's initial mitigation efforts such as reduced store hours.
  • 7Return on Invested Capital (ROIC) was a strong 45.4% for fiscal 2019, reflecting efficient capital deployment.

Frequently Asked Questions

The Home Depot's primary strategy is the "One Home Depot" initiative, a multi-year, approximately $11 billion investment program aimed at creating an interconnected, frictionless shopping experience. This involves seamlessly blending digital and physical channels, investing in stores, associates, supply chain, and product innovation to cater to evolving customer expectations for both DIY and professional customers.

In fiscal year 2019, The Home Depot reported net sales of $110.2 billion and net earnings of $11.2 billion, or $10.25 per diluted share. The company also demonstrated strong operational efficiency with a Return on Invested Capital (ROIC) of 45.4%.

The Home Depot is committed to returning capital to shareholders through both dividends and share repurchases. In fiscal year 2019, the company returned $7.0 billion through share repurchases and $6.0 billion in cash dividends. The company also announced a 10% increase in its quarterly cash dividend in February 2020.

At the time of filing, The Home Depot was actively monitoring the COVID-19 pandemic. Initial actions included reducing store operating hours, expanding paid time off for associates, and shifting support operations to remote or virtual setups. The company also increased its financial flexibility by expanding credit facilities and suspending share repurchases. The full impact was uncertain and being continuously assessed.