HD
$170.50
Home Depot
$.46
.27%
Earnings Details
3rd Quarter October 2018
Tuesday, November 13, 2018 6:00:00 AM
Tweet Share Watch
Summary

Home Depot Beats

Home Depot (HD) reported 3rd Quarter October 2018 earnings of $2.51 per share on revenue of $26.3 billion. The consensus earnings estimate was $2.27 per share on revenue of $26.3 billion. The Earnings Whisper number was $2.31 per share. Revenue grew 5.1% on a year-over-year basis.

Home Depot, Inc., is a home improvement retailer. Its stores sell an assortment of building materials, home improvement and lawn and garden products and provide a number of services.

Results
Reported Earnings
$2.51
Earnings Whisper
$2.31
Consensus Estimate
$2.27
Reported Revenue
$26.30 Bil
Revenue Estimate
$26.25 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

The Home Depot Announces Third Quarter Results; Updates Fiscal Year 2018 Guidance

ATLANTA, Nov. 13, 2018 /CNW/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $26.3 billion for the third quarter of fiscal 2018, a 5.1 percent increase from the third quarter of fiscal 2017. Comparable sales for the third quarter of fiscal 2018 were positive 4.8 percent, and comp sales in the U.S. were positive 5.4 percent.

The Home Depot logo. (PRNewsFoto/The Home Depot) (PRNewsFoto/)

Net earnings for the third quarter of fiscal 2018 were $2.9 billion, or $2.51 per diluted share, compared with net earnings of $2.2 billion, or $1.84 per diluted share, in the same period of fiscal 2017. For the third quarter of fiscal 2018, diluted earnings per share increased 36.4 percent from the same period in the prior year.

"We are pleased with our third quarter results and the growth that we saw from both our professional and do-it-yourself customers. Our customers continue to respond to our expansive assortment and enhancements we are making to drive an interconnected shopping experience. We saw continued strength across the store, as well as healthy growth in our digital business," said Craig Menear, chairman, CEO and president. "We believe this is a testament to the overall strength of demand in the home improvement market."

Updated Fiscal 2018 Guidance

Based on its year-to-date performance, the Company updated its fiscal 2018 guidance. The Company will have 53 weeks of operating results in fiscal 2018 and now expects:

  • Sales growth of approximately 7.2 percent;
  • Comp sales growth of approximately 5.5 percent for the comparable 52-week period;
  • Operating margin of approximately 14.5 percent;
  • Tax rate of approximately 24 percent;
  • Fiscal 2018 share repurchases of approximately $8 billion;
  • Diluted earnings-per-share growth of approximately 33.8 percent from fiscal 2017 to $9.75.

The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at http://ir.homedepot.com/events-and-presentations.

Recent Accounting Pronouncement – Revenue Recognition

During the first quarter of fiscal 2018, the Company adopted ASU No. 2014-09, which pertains to revenue recognition. The adoption of this standard will not materially impact the Company's consolidated financial statements or related disclosures.

The Company has adopted this standard on a modified retrospective basis. In accordance therewith, financial information prior to fiscal 2018 will not be recast. The consolidated statements of earnings and balance sheet for periods and dates subsequent to fiscal 2017 reflect the effect of this accounting policy adoption.

Additional information about the impact of the adoption of ASU No. 2014-09 is available at http://ir.homedepot.com/financial-reports/quarterly-earnings/2018

At the end of the third quarter, the Company operated a total of 2,286 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs more than 400,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index.

Certain statements contained herein constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the demand for our products and services; net sales growth; comparable sales; effects of competition; implementation of store, interconnected retail, supply chain and technology initiatives; issues related to the payment methods we accept; state of the economy; state of the residential construction, housing and home improvement markets; state of the credit markets, including mortgages, home equity loans and consumer credit; demand for credit offerings; inventory and in-stock positions; management of relationships with our suppliers and vendors; continuation of share repurchase programs; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims and litigation; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of the Tax Cuts and Jobs Act of 2017; store openings and closures; guidance for fiscal 2018 and beyond; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and benefits of those acquisitions.  Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events.  You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control or are currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended January 28, 2018 and in our subsequent Quarterly Reports on Form 10-Q.

Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the Securities and Exchange Commission.

 

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)










Three Months Ended




Nine Months Ended



in millions, except per share data

October 28,
2018


October 29,
 2017


% Change


October 28,
2018


October 29,
 2017


% Change

Net sales

$

26,302



$

25,026



5.1

%


$

81,712



$

77,021



6.1

%

Cost of sales

17,151



16,378



4.7



53,579



50,758



5.6


Gross profit

9,151



8,648



5.8



28,133



26,263



7.1


Operating expenses:












Selling, general and administrative

4,808



4,514



6.5



14,591



13,424



8.7


Depreciation and amortization

473



454



4.2



1,390



1,347



3.2


Total operating expenses

5,281



4,968



6.3



15,981



14,771



8.2


Operating income

3,870



3,680



5.2



12,152



11,492



5.7


Interest and other (income) expense:












Interest and investment income

(25)



(22)



13.6



(73)



(51)



43.1


Interest expense

249



269



(7.4)



782



788



(0.8)


Interest and other, net

224



247



(9.3)



709



737



(3.8)


Earnings before provision for income taxes

3,646



3,433



6.2



11,443



10,755



6.4


Provision for income taxes

779



1,268



(38.6)



2,666



3,904



(31.7)


Net earnings

$

2,867



$

2,165



32.4

%


$

8,777



$

6,851



28.1

%













Basic weighted average common shares

1,135



1,168



(2.8)

%


1,144



1,184



(3.4)

%

Basic earnings per share

$

2.53



$

1.85



36.8



$

7.67



$

5.79



32.5














Diluted weighted average common shares

1,141



1,174



(2.8)

%


1,150



1,190



(3.4)

%

Diluted earnings per share

$

2.51



$

1.84



36.4



$

7.63



$

5.76



32.5















Three Months Ended




Nine Months Ended



Selected Sales Data(1)

October 28,
2018


October 29,
 2017


% Change


October 28,
2018


October 29,
 
2017


% Change

Customer transactions (in millions)

394.8



389.5



1.4

%


1,226.0



1,212.0



1.2

%

Average ticket

$

65.11



$

62.84



3.6



$

65.79



$

62.78



4.8


Sales per square foot

433.99



412.49



5.2



449.94



423.60



6.2


_____________





















(1)

Selected Sales Data does not include results for Interline Brands, Inc., which was acquired in fiscal 2015.

 

 

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)







in millions

October 28,
2018


October 29,
 2017


January 28,
 2018

Assets






Cash and cash equivalents

$

1,764



$

3,549



$

3,595


Receivables, net

2,171



2,166



1,952


Merchandise inventories

14,754



13,419



12,748


Other current assets

1,120



548



638


Total current assets

19,809



19,682



18,933


Net property and equipment

22,054



21,960



22,075


Goodwill

2,258



2,217



2,275


Other assets

1,079



1,164



1,246


Total assets

$

45,200



$

45,023



$

44,529








Liabilities and Stockholders' Equity






Short-term debt

$

1,398



$

125



$

1,559


Accounts payable

9,054



8,570



7,244


Accrued salaries and related expenses

1,495



1,488



1,640


Current installments of long-term debt

1,054



1,198



1,202


Other current liabilities

5,195



4,621



4,549


Total current liabilities

18,196



16,002



16,194


Long-term debt, excluding current installments

23,332



24,266



24,267


Other liabilities

2,352



2,212



2,614


Total liabilities

43,880



42,480



43,075


Total stockholders' equity

1,320



2,543



1,454


Total liabilities and stockholders' equity

$

45,200



$

45,023



$

44,529


 

 

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Nine Months Ended

in millions

October 28,
2018


October 29,
 2017

Cash Flows from Operating Activities:




Net earnings

$

8,777



$

6,851


Reconciliation of net earnings to net cash provided by operating activities:




Depreciation and amortization

1,603



1,533


Stock-based compensation expense

204



214


Changes in working capital and other, net of acquisition effects

(548)



1,143


Net cash provided by operating activities

10,036



9,741






Cash Flows from Investing Activities:




Capital expenditures, net of non-cash capital expenditures

(1,711)



(1,354)


Payments for business acquired, net



(260)


Proceeds from sales of property and equipment

21



38


Other investing activities

(3)




Net cash used in investing activities

(1,693)



(1,576)






Cash Flows from Financing Activities:




Repayments of short-term debt, net

(161)



(585)


Proceeds from long-term debt, net of discounts



2,991


Repayments of long-term debt

(1,192)



(534)


Repurchases of common stock

(5,518)



(6,067)


Proceeds from sales of common stock

140



157


Cash dividends

(3,548)



(3,174)


Other financing activities

99



(41)


Net cash used in financing activities

(10,180)



(7,253)


Change in cash and cash equivalents

(1,837)



912


Effect of exchange rate changes on cash and cash equivalents

6



99


Cash and cash equivalents at beginning of period

3,595



2,538


Cash and cash equivalents at end of period

$

1,764



$

3,549


 

 

THE HOME DEPOT, INC.

ASU NO. 2014-09 IMPACT OF ADOPTION

(Unaudited)


The Company adopted ASU No. 2014-09, which pertains to revenue recognition, in the first quarter of fiscal 2018. The following table shows the impact of adopting ASU No. 2014-09 on the consolidated statement of earnings for the three and nine month periods ended October 28, 2018. The implementation of this accounting standard resulted in an increase in net sales, gross profit, selling, general and administrative, and total operating expenses and a decrease in cost of sales. There was no impact on operating income, net earnings, or earnings per share.




Three Months Ended October 28, 2018

in millions

As
Reported


% of
Net Sales


ASU No. 2014-
09
Impact


Excluding
ASU No. 2014-
09 Impact


% of
Net Sales

Net sales

$

26,302



100.0

%


$

64



$

26,238



100.0

%

Cost of sales

17,151



65.2



(83)



17,234



65.7


Gross profit

9,151



34.8



147



9,004



34.3


Selling, general and administrative

4,808



18.3



147



4,661



17.8


Total operating expenses

5,281



20.1



147



5,134



19.6


















Nine Months Ended October 28, 2018

in millions

As
Reported


% of
Net Sales


ASU No. 2014-
09
Impact


Excluding
ASU No. 2014-
09 Impact


% of
Net Sales

Net sales

$

81,712



100.0

%


$

130



$

81,582



100.0

%

Cost of sales

53,579



65.6



(300)



53,879



66.0


Gross profit

28,133



34.4



430



27,703



34.0


Selling, general and administrative

14,591



17.9



430



14,161



17.4


Total operating expenses

15,981



19.6



430



15,551



19.1


 

 

THE HOME DEPOT, INC.

ASU NO. 2014-09 IMPACT OF ADOPTION

(Unaudited)


The Company adopted ASU No. 2014-09, which pertains to revenue recognition, in the first quarter of fiscal 2018. The following table shows the impact of adopting ASU No. 2014-09 on the consolidated balance sheet as of October 28, 2018.




October 28, 2018

in millions

As
Reported


ASU 
No. 2014-09
Impact


Excluding
ASU No. 2014-09
Impact

Assets






Receivables, net

$

2,171



$

(44)



$

2,215


Other current assets

1,120



268



852


Total current assets

19,809



224



19,585


Total assets

45,200



224



44,976








Liabilities and Stockholders' Equity






Other current liabilities

$

5,195



$

125



$

5,070


Total current liabilities

18,196



125



18,071


Other liabilities

2,352



24



2,328


Total liabilities

43,880



149



43,731


Total stockholders' equity

1,320



75



1,245


Total liabilities and stockholders' equity

45,200



224



44,976


 

 

THE HOME DEPOT, INC.

PRO FORMA EFFECT OF ASU NO. 2014-09

(Unaudited)


The Company adopted ASU No. 2014-09, which pertains to revenue recognition, in the first quarter of fiscal 2018 using the modified retrospective method. In accordance therewith, financial information prior to fiscal 2018 will not be recast as the modified retrospective method does not permit recasting pre-adoption financial information. The following tables present selected as-reported financial results and the pro forma effect of ASU No. 2014-09 as if the recognition and presentation guidance in the accounting standard had been applied in fiscal 2017. There was no impact on operating income, net earnings, or earnings per share. The fiscal 2017 pro forma financial information included in the tables below is presented for informational purposes only.




Three Months Ended April 30, 2017

in millions

As
Reported


% of
Net Sales


ASU No. 2014-
09
Effect


Including
ASU No.
2014-09 Effect


% of
Net Sales

Net sales

$

23,887



100.0

%


$

48



$

23,935



100.0

%

Cost of sales

15,733



65.9



(90)



15,643



65.4


Gross profit

8,154



34.1



138



8,292



34.6


Selling, general and administrative

4,361



18.3



138



4,499



18.8


Total operating expenses

4,805



20.1



138



4,943



20.7


















Three Months Ended July 30, 2017

in millions

As
Reported


% of
Net Sales


ASU No. 2014-
09
Effect


Including
ASU No.
2014-09 Effect


% of
Net Sales

Net sales

$

28,108



100.0

%


$

33



$

28,141



100.0

%

Cost of sales

18,647



66.3



(114)



18,533



65.9


Gross profit

9,461



33.7



147



9,608



34.1


Selling, general and administrative

4,549



16.2



147



4,696



16.7


Total operating expenses

4,998



17.8



147



5,145



18.3


















Three Months Ended October 29, 2017

in millions

As
Reported


% of
Net Sales


ASU No. 2014-
09
Effect


Including
ASU No. 2014-
09 Effect


% of
Net Sales

Net sales

$

25,026



100.0

%


$

44



$

25,070



100.0

%

Cost of sales

16,378



65.4



(85)



16,293



65.0


Gross profit

8,648



34.6



129



8,777



35.0


Selling, general and administrative

4,514



18.0



129



4,643



18.5


Total operating expenses

4,968



19.9



129



5,097



20.3


















Three Months Ended January 28, 2018

in millions

As
Reported


% of
Net Sales


ASU No. 2014-
09
Effect


Including
ASU No. 2014-
09 Effect


% of
Net Sales

Net sales

$

23,883



100.0

%


$

41



$

23,924



100.0

%

Cost of sales

15,790



66.1



(85)



15,705



65.6


Gross profit

8,093



33.9



126



8,219



34.4


Selling, general and administrative

4,440



18.6



126



4,566



19.1


Total operating expenses

4,904



20.5



126



5,030



21.0


















Fiscal Year Ended January 28, 2018

in millions

As
Reported


% of
Net Sales


ASU No. 2014-
09
Effect


Including
ASU No. 2014-
09 Effect


% of
Net Sales

Net sales

$

100,904



100.0

%


$

166



$

101,070



100.0

%

Cost of sales

66,548



66.0



(374)



66,174



65.5


Gross profit

34,356



34.0



540



34,896



34.5


Selling, general and administrative

17,864



17.7



540



18,404



18.2


Total operating expenses

19,675



19.5



540



20,215



20.0


 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/the-home-depot-announces-third-quarter-results-updates-fiscal-year-2018-guidance-300748730.html

SOURCE The Home Depot