HOME DEPOT, INC. - FORM 8-K - EX-99.1 - EX 99.1 - August 19, 2014

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Exhibit 99.1
The Home Depot Announces Second Quarter Results;
Updates Fiscal Year 2014 Guidance

ATLANTA, August 19, 2014 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $23.8 billion for the second quarter of fiscal 2014, a 5.7 percent increase from the second quarter of fiscal 2013. Comparable store sales for the second quarter of fiscal 2014 were positive 5.8 percent, and comp sales for U.S. stores were positive 6.4 percent.

Net earnings for the second quarter were $2.1 billion, or $1.52 per diluted share, compared with net earnings of $1.8 billion, or $1.24 per diluted share, in the same period of fiscal 2013. For the second quarter of fiscal 2014, diluted earnings per share increased 22.6 percent from the same period in the prior year.

“In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies,” said Frank Blake, chairman and CEO. “I would like to thank our associates for their hard work and dedication, especially at this time of increased demand.”

Updated Fiscal 2014 Guidance

The Company confirmed that it expects fiscal 2014 sales will be up approximately 4.8 percent from fiscal 2013. Based on its second quarter performance and its outlook for the year, the Company raised its fiscal 2014 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 20.2 percent to $4.52 for the year. This earnings-per-share guidance includes the benefit of the Company’s year-to-date share repurchases of $3.5 billion and the Company’s intent to repurchase an additional $3.5 billion of shares over the remainder of the year.

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 earnings.homedepot.com.

At the end of the second quarter, the Company operated a total of 2,264 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 300,000 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 store sales; effects of competition; 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; inventory and in-stock positions; implementation of store, interconnected retail and supply chain initiatives; 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 effect of accounting charges; the effect of adopting certain accounting standards; store openings and closures; guidance for fiscal 2014 and beyond; and financial outlook. 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 February 2, 2014 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.


For more information, contact:
 
 
Financial Community
 
News Media
Diane Dayhoff
 
Stephen Holmes
Vice President of Investor Relations
 
Director of Corporate Communications
770-384-2666
 
770-384-5075
diane_dayhoff@homedepot.com
 
stephen_holmes@homedepot.com
 
 
 




THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND SIX MONTHS ENDED AUGUST 3, 2014 AND AUGUST 4, 2013
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
 
 
Three Months Ended



Six Months Ended


 
August 3,
2014

August 4,
2013

% Increase
(Decrease)

August 3, 2014

August 4, 2013

% Increase
(Decrease)
NET SALES
$
23,811


$
22,522


5.7
 %

$
43,498


$
41,646


4.4
 %
Cost of Sales
15,650


14,801


5.7


28,452


27,246


4.4

GROSS PROFIT
8,161


7,721


5.7


15,046


14,400


4.5


Operating Expenses:











Selling, General and Administrative
4,298


4,294


0.1


8,492


8,477


0.2

Depreciation and Amortization
415


409


1.5


829


811


2.2

Total Operating Expenses
4,713


4,703


0.2


9,321


9,288


0.4

OPERATING INCOME
3,448


3,018


14.2


5,725


5,112


12.0

Interest and Other (Income) Expense:











Interest and Investment Income
(17
)

(2
)

N/M

(117
)

(5
)

N/M
Interest Expense
208


174


19.5


399


338


18.0

Interest and Other, net
191


172


11.0


282


333


(15.3
)

EARNINGS BEFORE PROVISION FOR
INCOME TAXES
3,257


2,846


14.4


5,443


4,779


13.9

Provision for Income Taxes
1,207


1,051


14.8


2,014


1,758


14.6



















NET EARNINGS
$
2,050


$
1,795


14.2
 %

$
3,429


$
3,021


13.5
 %


















Weighted Average Common Shares
1,346


1,434


(6.1
)%

1,358


1,452


(6.5
)%
BASIC EARNINGS PER SHARE
$
1.52


$
1.25


21.6


$
2.53


$
2.08


21.6



















Diluted Weighted Average Common Shares
1,353


1,443


(6.2
)%

1,365


1,462


(6.6
)%
DILUTED EARNINGS PER SHARE
$
1.52


$
1.24


22.6


$
2.51


$
2.07


21.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
Six Months Ended
 
 
SELECTED HIGHLIGHTS
August 3,
2014
 
August 4,
2013
 
% Increase
(Decrease)
 
August 3, 2014
 
August 4, 2013
 
% Increase
(Decrease)
Number of Customer Transactions
409.7

 
393.2

 
4.2
 %
 
754.2

 
730.3

 
3.3
 %
Average Ticket (actual)
$
58.43

 
$
57.39

 
1.8

 
$
58.05

 
$
57.32

 
1.3

Sales per Square Foot (actual)
$
403.90

 
$
382.99

 
5.5

 
$
368.92

 
$
355.56

 
3.8

N/M – Not Meaningful
 







THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF AUGUST 3, 2014, AUGUST 4, 2013 AND FEBRUARY 2, 2014
(Unaudited)
(Amounts in Millions)


August 3,
2014

August 4,
2013

February 2,
2014
ASSETS





Cash and Cash Equivalents
$
4,216


$
3,419


$
1,929

Receivables, net
1,637


1,542


1,398

Merchandise Inventories
11,665


11,086


11,057

Other Current Assets
973


848


895

Total Current Assets
18,491


16,895


15,279


Property and Equipment, net
23,126


23,650


23,348

Goodwill
1,295


1,170


1,289

Other Assets
567


477


602

TOTAL ASSETS
$
43,479


$
42,192


$
40,518







LIABILITIES AND STOCKHOLDERS' EQUITY





Accounts Payable
$
7,165


$
6,585


$
5,797

Accrued Salaries and Related Expenses
1,325


1,423


1,428

Current Installments of Long-Term Debt
34


1,308


33

Other Current Liabilities
4,315


3,679


3,491

Total Current Liabilities
12,839


12,995


10,749


Long-Term Debt, excluding current installments
16,702


11,450


14,691

Other Long-Term Liabilities
2,481


2,269


2,556

Total Liabilities
32,022


26,714


27,996


Total Stockholders' Equity
11,457


15,478


12,522

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
43,479


$
42,192


$
40,518





THE HOME DEPOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED AUGUST 3, 2014 AND AUGUST 4, 2013
(Unaudited)
(Amounts in Millions)
 
 
Six Months Ended
 
August 3,
2014

August 4,
2013
CASH FLOWS FROM OPERATING ACTIVITIES:



Net Earnings
$
3,429


$
3,021

Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:



Depreciation and Amortization
896


877

Stock-Based Compensation Expense
119


116

Changes in Working Capital and Other
953


704

Net Cash Provided by Operating Activities
5,397


4,718


CASH FLOWS FROM INVESTING ACTIVITIES:



Capital Expenditures
(631
)

(599
)
Payments for Business Acquired, net
—


(13
)
Proceeds from Sales of Property and Equipment
16


16

Net Cash Used in Investing Activities
(615
)

(596
)

CASH FLOWS FROM FINANCING ACTIVITIES:



Proceeds from Long-Term Borrowings, net of discount
1,981


1,994

Repayments of Long-Term Debt
(21
)

(17
)
Repurchases of Common Stock
(3,500
)

(4,346
)
Proceeds from Sales of Common Stock
148


150

Cash Dividends Paid to Stockholders
(1,285
)

(1,143
)
Other Financing Activities
181


154

Net Cash Used in Financing Activities
(2,496
)

(3,208
)

Change in Cash and Cash Equivalents

2,286


914

Effect of Exchange Rate Changes on Cash and Cash Equivalents
1


11

Cash and Cash Equivalents at Beginning of Period
1,929


2,494


Cash and Cash Equivalents at End of Period
$
4,216


$
3,419




HOME DEPOT, INC. Reports