10-QPeriod: Q1 FY2014

HOME DEPOT, INC. Quarterly Report for Q1 Ended May 5, 2013

Filed May 29, 2013For Securities:HD

Summary

The Home Depot, Inc. (HD) reported a strong first quarter for fiscal year 2013, with net sales increasing by 7.4% to $19.1 billion compared to the prior year. This growth was driven by a solid 4.3% increase in comparable store sales, a 4.2% rise in average ticket price, and a 0.1% increase in customer transactions. The company also benefited from a seasonal timing shift due to the 53rd week in fiscal 2012, which contributed approximately $574 million to net sales. Diluted Earnings Per Share (EPS) rose to $0.83 from $0.68 in the prior year's first quarter, reflecting improved profitability and effective expense management. Financially, The Home Depot demonstrated robust operating cash flow of $2.7 billion, which, along with $2.0 billion in new long-term debt, was strategically utilized to fund significant share repurchases totaling $2.2 billion and dividend payments of $577 million. The company also continued its investment in capital expenditures ($278 million) and expanded its interconnected retail capabilities, including the rollout of 'Buy Online, Ship To Store'. The balance sheet remains strong, with cash and cash equivalents increasing to $4.3 billion.

Financial Highlights

49 data points
Beta

Revenue

$19.12B

34.9% Gross Margin

Net Income

$1.23B

6.4% Net Margin

EPS (Diluted)

$0.83

Total Assets

$44.20B

Cash & Equivalents

$4.34B

Free Cash Flow

$2.70B

Financial Statements
Beta
Revenue$19.12B
Cost of Revenue$12.45B
Gross Profit$6.68B
SG&A Expenses$4.18B
Operating Expenses$4.58B
Operating Income$2.09B
Interest Expense$164.00M
Net Income$1.23B
EPS (Basic)$0.84
EPS (Diluted)$0.83
Shares Outstanding (Basic)1.47B
Shares Outstanding (Diluted)1.48B

Key Highlights

  • 1Net sales increased 7.4% year-over-year to $19.1 billion.
  • 2Comparable store sales grew by 4.3%, with US stores showing a 4.8% increase.
  • 3Diluted Earnings Per Share (EPS) rose significantly to $0.83 from $0.68 in the prior year.
  • 4Operating cash flow was strong at $2.7 billion, supporting significant capital allocation activities.
  • 5The company repurchased $2.2 billion of its common stock and paid $577 million in dividends.
  • 6Introduced 'Buy Online, Ship To Store' (BOSS) to enhance interconnected retail capabilities.
  • 7Increased long-term debt by $2.0 billion, primarily to fund share repurchases.

Frequently Asked Questions

The increase in Net Sales was driven by positive comparable store sales growth of 4.3%, a 4.2% increase in the average ticket price, and a seasonal timing change due to the 53rd week in fiscal 2012, which added approximately $574 million in Net Sales. An improved U.S. housing market also contributed to the positive sales environment.

The company generated strong operating cash flow and issued new long-term debt. These funds were primarily used for significant share repurchases ($2.2 billion) and dividend payments ($577 million). Capital expenditures were also made ($278 million) to support operations and strategic initiatives like interconnected retail.

The company's total liabilities increased due to new long-term debt issuance ($2.0 billion), bringing total liabilities to $27.8 billion. However, cash and cash equivalents also saw a substantial increase to $4.3 billion from $2.5 billion at the end of the previous quarter. The company believes its current cash position and access to debt markets are sufficient for its operational and capital needs.

The Home Depot is focusing on four key initiatives: enhancing Customer Service, strengthening Product Authority through merchandising and portfolio strategy, disciplined Capital Allocation and productivity improvements, and expanding Interconnected Retail capabilities across all channels, including the recent rollout of Buy Online, Ship To Store (BOSS).