01—Abstract
Summary
Summary of the 10-K filed March 24, 2021. Cited figures are marked; the original filing is the authoritative source.
The Home Depot, Inc. (HD) reported strong financial performance for the fiscal year ending January 30, 2021, with net sales increasing by 19.9% to $132.1 billiona, reflecting robust growth in both comparable customer transactions and average ticket size.
This surge in demand was largely driven by increased consumer focus on home improvement projects, accelerated by the COVID-19 pandemic. The company effectively managed this growth by leveraging its "One Home Depot" strategy, which emphasizes an interconnected, frictionless shopping experience across physical and digital channels. The company demonstrated resilience and adaptability amidst the pandemic, implementing enhanced safety measures for associates and customers and providing significant additional compensation to its workforce, totaling approximately $2.0 billionb in fiscal year 2020.
Strategic investments in supply chain and digital capabilities, initiated prior to the pandemic, proved instrumental in navigating the operational challenges and meeting evolving customer demands. The acquisition of HD Supply in December 2020 for $7.8 billionc is expected to accelerate sales growth by expanding its reach in the MRO (Maintenance, Repair, and Operations) market, further strengthening its position in serving professional customers.
02—Key points
Key Highlights
- Achieved record net sales of $132.1 billion, a 19.9% increase year-over-year, driven by strong comparable sales growth (19.7%).
- Online sales experienced significant growth, increasing by approximately 86% in fiscal 2020, highlighting the effectiveness of digital investments.
- Successfully navigated the COVID-19 pandemic by prioritizing associate and customer safety, implementing enhanced compensation, and adapting operations.
- Completed the strategic acquisition of HD Supply for $7.8 billion, expanding its offerings in the MRO market.
- Returned significant value to shareholders through $6.5 billion in cash dividends and resumed share repurchases in Q1 2021 after a temporary suspension.
- Maintained a strong financial position with $7.9 billion in cash and cash equivalents at fiscal year-end, supported by robust operating cash flow.
- Demonstrated strong operational execution with a 10.5% increase in comparable average ticket and an 8.6% increase in comparable customer transactions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Home Depot, Inc. kept $0.10.
- Revenue$132.11B100.0%
- Cost of revenue−$87.26B66.0%
- Gross profit$44.85B34.0%
- Operating costs−$26.57B20.1%
- Operating income$18.28B13.8%
- Interest, other & tax−$5.41B4.1%
- Net income$12.87B9.7%
Where FY2021 revenue went
$132.11B- Cost of revenue: $87.26B, 66% of revenue
- SG&A: $24.45B, 19% of revenue
- Net income: $12.87B, 9.7% of revenue
- Other operating costs: $2.13B, 1.6% of revenue
- Interest, other & tax: $5.41B, 4.1% of revenue
Kept 9.7% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 24, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $132.11B$110.22B | +19.9% |
| Cost of Revenue | $87.26B$72.65B | +20.1% |
| Gross Profit | $44.85B$37.57B | +19.4% |
| SG&A Expenses | $24.45B$19.74B | +23.8% |
| Operating Expenses | $26.57B$21.73B | +22.3% |
| Operating Income | $18.28B$15.84B | +15.4% |
| Interest Expense | $1.35B$1.20B | +12.2% |
| Net Income | $12.87B$11.24B | +14.4% |
| EPS (Basic) | $11.98$10.29 | +16.4% |
| EPS (Diluted) | $11.94$10.25 | +16.5% |
| Shares Outstanding (Basic) | 1.07B1.09B | −1.7% |
| Shares Outstanding (Diluted) | 1.08B1.10B | −1.7% |
05—Questions
Frequently Asked Questions
How did the COVID-19 pandemic impact Home Depot's business?
The COVID-19 pandemic significantly boosted demand for home improvement products and services, leading to a substantial increase in sales. Home Depot adapted by prioritizing safety, implementing enhanced associate pay and benefits (incurring approximately $2.0 billion in additional expense for fiscal 2020), and leveraging its digital and supply chain investments to meet heightened customer demand across both online and physical channels.
What was the significance of the HD Supply acquisition?
The acquisition of HD Supply, completed in December 2020 for $7.8 billion, is a strategic move to accelerate sales growth, particularly by better serving the Maintenance, Repair, and Operations (MRO) market and expanding its reach within the professional customer segment.
How did Home Depot return value to shareholders during this period?
The company continued its commitment to shareholder returns by paying $6.5 billion in cash dividends during fiscal 2020. While share repurchases were temporarily suspended in March 2020 due to the pandemic, they resumed in the first quarter of fiscal 2021. Management also announced a 10% increase in its quarterly cash dividend in February 2021.
What are Home Depot's key competitive advantages mentioned in the report?
Home Depot identifies its primary competitive advantages as its culture and associates, premium real estate footprint, world-class merchandising organization, flexible supply chain, and strong digital experience. These advantages support its 'One Home Depot' strategy aimed at providing an interconnected and frictionless customer experience.
06—Continue