01—Abstract
Summary
Summary of the 10-K filed March 13, 2024. Cited figures are marked; the original filing is the authoritative source.
Home Depot Inc. (HD) reported a decrease in net sales for fiscal year 2023, reaching $152.7 billiona, down from $157.4 billion in fiscal year 2022.
This decline was primarily attributed to a challenging macroeconomic environment, including a shift in consumer spending from goods to services and the impact of rising interest rates, which led to fewer customer transactions and a decrease in the average ticket size. Despite the sales dip, the company demonstrated strong profitability with net earnings of $15.1 billionb, or $15.11 per diluted share, and a robust return on invested capital (ROIC) of 36.7%. The company continued its commitment to shareholder returns by paying over $16 billion in cash dividends and share repurchases in fiscal 2023.
Home Depot also strategically invested $3.2 billionc in capital expenditures to support business growth and enhance the customer experience through its interconnected retail strategy, focusing on digital improvements, store enhancements, and supply chain optimization. The company plans further capital investments of $3.0 billion to $3.5 billion in fiscal 2024, with a focus on new stores and improving customer experience.
02—Key points
Key Highlights
- Net sales decreased by 3.0% to $152.7 billion in fiscal 2023, driven by lower comparable sales (-3.2%) and a decrease in customer transactions.
- Net earnings were $15.1 billion, or $15.11 per diluted share, a decrease from the prior year, reflecting the challenging economic conditions.
- The company returned over $16 billion to shareholders through cash dividends and share repurchases in fiscal 2023.
- Capital expenditures totaled $3.2 billion in fiscal 2023, with plans for $3.0 billion to $3.5 billion in fiscal 2024, focused on new stores and customer experience enhancements.
- The company's strategy focuses on delivering the best customer experience, being the low-cost provider, and being the most efficient investor of capital.
- Online sales represented 14.8% of net sales and increased by 1.1% year-over-year, indicating continued digital channel growth.
- Return on Invested Capital (ROIC) stood at 36.7% for fiscal 2023, reflecting strong capital efficiency despite a decrease from the prior year's 44.6%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Home Depot, Inc. kept $0.10.
- Revenue$152.67B100.0%
- Cost of revenue−$101.71B66.6%
- Gross profit$50.96B33.4%
- Operating costs−$29.27B19.2%
- Operating income$21.69B14.2%
- Interest, other & tax−$6.55B4.3%
- Net income$15.14B9.9%
Where FY2024 revenue went
$152.67B- Cost of revenue: $101.71B, 67% of revenue
- SG&A: $26.60B, 17% of revenue
- Net income: $15.14B, 9.9% of revenue
- Other operating costs: $2.67B, 1.8% of revenue
- Interest, other & tax: $6.55B, 4.3% of revenue
Kept 9.9% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed March 13, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $152.67B$157.40B | −3.0% |
| Cost of Revenue | $101.71B$104.63B | −2.8% |
| Gross Profit | $50.96B$52.78B | −3.4% |
| SG&A Expenses | $26.60B$26.28B | +1.2% |
| Operating Expenses | $29.27B$28.74B | +1.9% |
| Operating Income | $21.69B$24.04B | −9.8% |
| Interest Expense | $1.94B$1.62B | +20.2% |
| Net Income | $15.14B$17.11B | −11.5% |
| EPS (Basic) | $15.16$16.74 | −9.4% |
| EPS (Diluted) | $15.11$16.69 | −9.5% |
| Shares Outstanding (Basic) | 999.00M1.02B | −2.3% |
| Shares Outstanding (Diluted) | 1.00B1.02B | −2.2% |
05—Questions
Frequently Asked Questions
What were Home Depot's key financial performance indicators for fiscal 2023?
Home Depot reported net sales of $152.7 billion, a decrease of 3.0% from fiscal 2022. Net earnings were $15.1 billion, or $15.11 per diluted share. The company generated $21.2 billion in cash flow from operations and maintained a Return on Invested Capital (ROIC) of 36.7%.
How is Home Depot returning capital to shareholders?
In fiscal 2023, Home Depot returned over $16 billion to shareholders through a combination of cash dividends and share repurchases. The company also announced a 7.7% increase in its quarterly cash dividend in February 2024.
What are Home Depot's strategic priorities and investment plans for the future?
Home Depot's core strategies focus on providing the best customer experience, being the low-cost provider, and efficiently investing capital. For fiscal 2024, the company plans to invest $3.0 billion to $3.5 billion in capital expenditures, primarily directed towards opening new stores and enhancing the overall customer experience through technology and new capabilities.
What factors impacted Home Depot's sales performance in fiscal 2023?
The decrease in net sales was primarily due to a challenging macroeconomic environment. This included a shift in consumer spending from goods to services, the impact of rising interest rates, and lumber price deflation, which collectively led to a decrease in comparable customer transactions and average ticket size.
06—Continue