EX-99.1 2 hd_exx991x05012016.htm EX-99.1 SEC Exhibit


Exhibit 99.1
The Home Depot Announces Record First Quarter Results;
Raises Fiscal 2016 Guidance

ATLANTA, May 17, 2016 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $22.8 billion for the first quarter of fiscal 2016, a 9.0 percent increase from the first quarter of fiscal 2015. Comparable store sales for the first quarter of fiscal 2016 were positive 6.5 percent, and comp sales for U.S. stores were positive 7.4 percent.

Net earnings for the first quarter of fiscal 2016 were $1.8 billion, or $1.44 per diluted share, compared with net earnings of $1.6 billion, or $1.21 per diluted share, in the same period of fiscal 2015. For the first quarter of fiscal 2016, diluted earnings per share increased 19.0 percent from the same period in the prior year.

“We were pleased with our stronger than expected start to the year, driven by solid execution and broad-based growth across the store,” said Craig Menear, chairman, CEO and president. “This was made possible by our hard working associates and their continued dedication to our customers in a quarter marked by week-to-week demand spikes caused by weather variability.”

Updated Fiscal 2016 Guidance

The Company raised its fiscal 2016 sales guidance and now expects sales will be up approximately 6.3 percent and comp sales will be up approximately 4.9 percent. The Company also raised its diluted earnings-per-share guidance for the year and now expects diluted earnings per share to grow approximately 14.8 percent from fiscal 2015 to $6.27.

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 first quarter, the Company operated a total of 2,275 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 385,000 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; demand for credit offerings; inventory and in-stock positions; implementation of

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store, interconnected retail and supply chain initiatives; management of relationships with our suppliers and vendors; the impact and expected outcome of investigations, inquiries, claims and litigation, including those related to the 2014 data breach; issues related to the payment methods we accept; 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 2016 and beyond; financial outlook; and the integration of Interline Brands, Inc. into our organization and the ability to recognize the anticipated synergies and benefits of the acquisition. 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 31, 2016 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 MONTHS ENDED MAY 1, 2016 AND MAY 3, 2015
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
 
 
Three Months Ended


 
May 1,
2016

May 3,
2015

% Increase
(Decrease)
NET SALES
$
22,762


$
20,891


9.0
 %
Cost of Sales
14,971


13,712


9.2

GROSS PROFIT
7,791


7,179


8.5


Operating Expenses:





Selling, General and Administrative
4,281


4,163


2.8

Depreciation and Amortization
433


419


3.3

Total Operating Expenses
4,714


4,582


2.9

OPERATING INCOME
3,077


2,597


18.5

Interest and Other (Income) Expense:





Interest and Investment Income
(7
)

(4
)

75.0

Interest Expense
244


197


23.9

Interest and Other, net
237


193


22.8


EARNINGS BEFORE PROVISION FOR
INCOME TAXES
2,840


2,404


18.1

Provision for Income Taxes
1,037


825


25.7










NET EARNINGS
$
1,803


$
1,579


14.2
 %









Weighted Average Common Shares
1,247


1,298


(3.9
)%
BASIC EARNINGS PER SHARE
$
1.45


$
1.22


18.9










Diluted Weighted Average Common Shares
1,252


1,305


(4.1
)%
DILUTED EARNINGS PER SHARE
$
1.44


$
1.21


19.0

 
 
 
 
 
 
 
Three Months Ended
 
 
SELECTED SALES DATA(1)
May 1,
2016
 
May 3,
2015
 
% Increase
(Decrease)
Number of Customer Transactions
374.8

 
360.2

 
4.1
 %
Average Ticket (actual)
$
60.03

 
$
58.60

 
2.4

Sales per Square Foot (actual)
$
376.73

 
$
353.70

 
6.5

 
 —————
(1)
Selected Sales Data does not include results for the Interline acquisition that was completed in the third quarter of fiscal 2015.

 






THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MAY 1, 2016, MAY 3, 2015 AND JANUARY 31, 2016
(Unaudited)
(Amounts in Millions)


May 1,
2016
 
May 3,
2015(1)
 
January 31,
2016 (1)
ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
3,257

 
$
2,827

 
$
2,216

Receivables, net
1,989

 
1,839

 
1,890

Merchandise Inventories
13,219

 
12,306

 
11,809

Other Current Assets
545

 
520

 
569

Total Current Assets
19,010

 
17,492

 
16,484


Property and Equipment, net
22,243

 
22,562

 
22,191

Goodwill
2,123

 
1,359

 
2,102

Other Assets
1,200

 
544

 
1,196

TOTAL ASSETS
$
44,576

 
$
41,957

 
$
41,973

 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
Short-Term Debt
$
—

 
$
—

 
$
350

Accounts Payable
8,711

 
8,070

 
6,565

Accrued Salaries and Related Expenses
1,339

 
1,283

 
1,515

Current Installments of Long-Term Debt
44

 
3,052

 
77

Other Current Liabilities
5,055

 
4,597

 
4,017

Total Current Liabilities
15,149

 
17,002

 
12,524


Long-Term Debt, excluding current installments
20,904

 
13,738

 
20,789

Other Long-Term Liabilities
2,188

 
2,013

 
2,344

Total Liabilities
38,241

 
32,753

 
35,657


Total Stockholders' Equity
6,335

 
9,204

 
6,316

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
44,576

 
$
41,957

 
$
41,973


 —————
(1)
The Consolidated Balance Sheets as of May 3, 2015 and January 31, 2016 were retrospectively adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” and ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” in the first quarter of fiscal 2016.




THE HOME DEPOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MAY 1, 2016 AND MAY 3, 2015
(Unaudited)
(Amounts in Millions)
 
 
Three Months Ended
 
May 1,
2016

May 3,
2015
CASH FLOWS FROM OPERATING ACTIVITIES:



Net Earnings
$
1,803


$
1,579

Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:
 
 
 
Depreciation and Amortization
486


454

Stock-Based Compensation Expense
72


69

Changes in Working Capital and Other
1,275


1,302

Net Cash Provided by Operating Activities
3,636


3,404


CASH FLOWS FROM INVESTING ACTIVITIES:



Capital Expenditures
(325
)

(322
)
Proceeds from Sales of Property and Equipment
4


5

Net Cash Used in Investing Activities
(321
)

(317
)

CASH FLOWS FROM FINANCING ACTIVITIES:



Repayments of Short-Term Borrowings, net
(350
)

(290
)
Proceeds from Long-Term Borrowings, net of discounts
2,989

 
—

Repayments of Long-Term Debt
(3,012
)

(10
)
Repurchases of Common Stock
(1,157
)

(1,125
)
Proceeds from Sales of Common Stock
29


47

Cash Dividends Paid to Stockholders
(862
)

(769
)
Other Financing Activities
25


146

Net Cash Used in Financing Activities
(2,338
)

(2,001
)
Change in Cash and Cash Equivalents
977


1,086

Effect of Exchange Rate Changes on Cash and Cash Equivalents
64


18

Cash and Cash Equivalents at Beginning of Period
2,216


1,723

Cash and Cash Equivalents at End of Period
$
3,257


$
2,827