10-QPeriod: Q3 FY2002

HOME DEPOT, INC. Quarterly Report for Q3 Ended Oct 28, 2001

Filed November 28, 2001For Securities:HD

Summary

Home Depot, Inc. reported strong financial performance for the third quarter and the first nine months of fiscal year 2001, reflecting significant net sales growth and improved profitability. Net sales increased by 15.1% to $13.3 billion for the quarter and 13.6% to $40.1 billion for the nine-month period, driven by new store openings. While comparable store sales were flat for the quarter due to a challenging economic environment, the company saw strength in specific product categories like paint, lumber, and building materials. The company's profitability also saw an uptick, with diluted earnings per share rising to $0.33 for the quarter and $0.99 for the nine months, compared to $0.28 and $0.90 respectively in the prior year. This improvement was supported by a higher gross profit margin, partly due to the expansion of tool rental centers, and effective expense management. Liquidity remains robust, with a substantial increase in cash from operations and a healthy cash balance, enabling continued investment in growth initiatives and capital expenditures.

Key Highlights

  • 1Net sales increased by 15.1% to $13.3 billion for the third quarter and 13.6% to $40.1 billion for the first nine months of fiscal 2001.
  • 2Diluted earnings per share (EPS) rose to $0.33 for the third quarter and $0.99 for the nine months, up from $0.28 and $0.90 in the prior year, respectively.
  • 3Comparable store-for-store sales were flat for the third quarter, indicating a challenging economic environment, but increased in key categories like paint and lumber.
  • 4Gross profit margin improved to 30.2% for the quarter and 29.9% for the nine months, boosted by tool rental centers and merchandising efficiencies.
  • 5Operating income grew by 19.3% for the third quarter and 10.1% for the nine-month period.
  • 6Cash provided by operations increased significantly to $4.3 billion for the first nine months of fiscal 2001, up from $2.8 billion in the prior year.
  • 7The company announced strategic divestitures of its international operations in Chile and Argentina, alongside the acquisition of a U.S.-based plumbing product distributor.

Frequently Asked Questions

Home Depot experienced a strong sales performance in the third quarter of fiscal 2001, with net sales increasing by 15.1% to $13.3 billion compared to the same period in fiscal 2000. This growth was primarily driven by the opening of new stores.

Comparable store-for-store sales were flat for the third quarter of fiscal 2001. This indicates that while the company is growing overall through new store openings, existing stores did not see sales growth on a like-for-like basis, likely due to the challenging economic conditions prevalent at the time. However, specific categories like paint, lumber, and building materials showed strength.

Home Depot generated a substantial $4.3 billion in cash from operations during the first nine months of fiscal 2001. The company plans significant capital expenditures, estimated at approximately $3.6 billion for fiscal 2001, primarily for new store development. Management believes its current cash position, internally generated funds, and available credit facilities are sufficient to meet these capital needs.

Yes, Home Depot is actively managing its portfolio. During the third quarter, the company completed the sale of its stores in Chile and reached an agreement to sell its stores in Argentina. Concurrently, it acquired Your 'other' Warehouse, a plumbing product distributor in the U.S., indicating a strategic focus on domestic operations and specific product segments.