HOME DEPOT, INC. Quarterly Report for Q3 Ended Oct 30, 2011

Summary

The Home Depot, Inc. reported a strong third quarter for fiscal year 2011, with net sales increasing by 4.4% to $17.3 billion and diluted earnings per share rising to $0.60 from $0.51 in the prior year. This performance was driven by a 4.2% increase in comparable store sales, benefiting from storm-related demand and strength in core departments, with average ticket prices also showing a healthy increase. Operationally, the company demonstrated improved profitability. Gross profit as a percentage of net sales saw a modest increase, benefiting from supply chain efficiencies, while selling, general, and administrative expenses as a percentage of net sales decreased due to expense leverage. The company also continued its commitment to returning capital to shareholders, with significant share repurchases and an announced 16% increase in its quarterly dividend. Cash flow from operations remained robust, providing ample liquidity to fund capital expenditures and shareholder returns.

Key Highlights

• 1Net sales increased 4.4% to $17.3 billion for the third quarter of fiscal 2011.
• 2Diluted Earnings Per Share (EPS) grew to $0.60 from $0.51 in the prior year's third quarter.
• 3Comparable store sales increased by 4.2% in the third quarter, indicating improved customer traffic and spending.
• 4Gross profit margin improved slightly to 34.4% from 34.3% year-over-year, driven by supply chain efficiencies.
• 5SG&A expenses as a percentage of net sales decreased to 22.8% from 23.1%, showing effective cost management.
• 6The company repurchased approximately $3.1 billion of its common stock during the first nine months of fiscal 2011.
• 7A 16% increase in the quarterly cash dividend to $0.29 per share was announced in November 2011.

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