10-QPeriod: Q3 FY2012

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

Filed November 29, 2011For Securities:HD

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.

Financial Highlights

50 data points
Beta

Revenue

$17.33B

34.4% Gross Margin

Net Income

$934.00M

5.4% Net Margin

EPS (Diluted)

$0.60

Total Assets

$41.50B

Cash & Equivalents

$2.23B

Free Cash Flow

$1.20B

Financial Statements
Beta
Revenue$17.33B
Cost of Revenue$11.37B
Gross Profit$5.96B
SG&A Expenses$3.96B
Operating Expenses$4.35B
Operating Income$1.61B
Interest Expense$162.00M
Net Income$934.00M
EPS (Basic)$0.61
EPS (Diluted)$0.60
Shares Outstanding (Basic)1.54B
Shares Outstanding (Diluted)1.55B

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.

Frequently Asked Questions

Home Depot's net sales increased by 4.4% to $17.3 billion in the third quarter of fiscal 2011, up from $16.6 billion in the same period of fiscal 2010. This growth was primarily driven by a 4.2% increase in comparable store sales.

Profitability improved year-over-year. Gross profit as a percentage of net sales increased slightly, and selling, general, and administrative expenses as a percentage of net sales decreased, leading to a significant increase in operating income and net earnings.

Home Depot is actively returning value to shareholders through share repurchases and dividends. In the first nine months of fiscal 2011, the company repurchased approximately $3.1 billion of its stock and announced a 16% increase in its quarterly dividend to $0.29 per share.

The company generated $5.7 billion in cash flow from operations for the first nine months of fiscal 2011, a significant increase from the prior year. With $2.2 billion in cash and cash equivalents and access to credit facilities, Home Depot appears to have sufficient liquidity to fund its operations, capital expenditures, and shareholder returns.