EX-99.1 2 hd_exhibit991x05212019.htm EX 99.1 Exhibit


Exhibit 99.1
hdlogoa02a01a01a01a01a13.jpg

The Home Depot Announces First Quarter Results;
Reaffirms Fiscal Year 2019 Guidance

ATLANTA, May 21, 2019 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $26.4 billion for the first quarter of fiscal 2019, a 5.7 percent increase from the first quarter of fiscal 2018. Comparable sales for the first quarter of fiscal 2019 were positive 2.5 percent, and comparable sales in the U.S. were positive 3.0 percent. In the first quarter, the difference between the Company’s sales growth and comparable sales performance reflects a shift in the calendar base due to 53 weeks of sales in fiscal 2018.

Net earnings for the first quarter of fiscal 2019 were $2.5 billion, or $2.27 per diluted share, compared with net earnings of $2.4 billion, or $2.08 per diluted share, in the same period of fiscal 2018. For the first quarter of fiscal 2019, diluted earnings per share increased 9.1 percent from the same period in the prior year.

“We were pleased with the underlying performance of the core business despite unfavorable weather in February and significant deflation in lumber prices compared to a year ago,” said Craig Menear, chairman, CEO and president.

“Looking ahead, we remain excited about the momentum we are seeing with our strategic investments. As a result of these initiatives, and the current macroeconomic and housing backdrop, today we are reaffirming our sales and earnings guidance for fiscal 2019. I would like to thank our associates for their hard work and continued dedication to our customers.”

Fiscal 2019 Guidance

The Company reaffirmed its guidance for fiscal 2019, a 52-week year compared to fiscal 2018, a 53-week year. The Company expects its fiscal 2019 sales to grow by approximately 3.3 percent and comp sales for the comparable 52-week period to be up approximately 5.0 percent. The Company also reaffirmed its diluted earnings-per-share growth guidance for the year and expects diluted earnings-per-share growth of approximately 3.1 percent from fiscal 2018 to $10.03.

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 ir.homedepot.com/events-and-presentations.

At the end of the first quarter, the Company operated a total of 2,289 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; inventory and in-stock positions; state of the economy; state of the housing and home improvement markets; state of the credit markets, including mortgages, home equity loans and consumer credit; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, 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 and other regulatory changes; store openings and closures; guidance for fiscal 2019 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, dependent on the actions of third parties, 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 3, 2019 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
Isabel Janci
 
Stephen Holmes
Vice President of Investor Relations and Treasurer
 
Vice President of Corporate Communications
770-384-2666
 
770-384-5075
isabel_janci@homedepot.com
 
stephen_holmes@homedepot.com
 
 
 



THE HOME DEPOT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
 
Three Months Ended
 
 
in millions, except per share data
May 5,
2019
 
April 29,
2018
 
% Change
Net sales
$
26,381

 
$
24,947

 
5.7
 %
Cost of sales
17,364

 
16,330

 
6.3

Gross profit
9,017

 
8,617

 
4.6

Operating expenses:
 
 
 
 
 
Selling, general and administrative
4,940

 
4,779

 
3.4

Depreciation and amortization
480

 
457

 
5.0

Total operating expenses
5,420

 
5,236

 
3.5

Operating income
3,597

 
3,381

 
6.4

Interest and other (income) expense:
 
 
 
 
 
Interest and investment income
(15
)
 
(22
)
 
(31.8
)
Interest expense
288

 
261

 
10.3

Interest and other, net
273

 
239

 
14.2

Earnings before provision for income taxes
3,324

 
3,142

 
5.8

Provision for income taxes
811

 
738

 
9.9

Net earnings
$
2,513

 
$
2,404

 
4.5
 %

 
 
 
 
 
Basic weighted average common shares
1,101

 
1,152

 
(4.4
)%
Basic earnings per share
$
2.28

 
$
2.09

 
9.1


 
 
 
 
 
Diluted weighted average common shares
1,106

 
1,158

 
(4.5
)%
Diluted earnings per share
$
2.27

 
$
2.08

 
9.1

 
 
 
 
 
 
 
Three Months Ended
 
 
Selected Sales Data (1)
May 5,
2019
 
April 29,
2018
 
% Change
Customer transactions (in millions)
390.0

 
375.9

 
3.8
 %
Average ticket
$
67.31

 
$
66.02

 
2.0

Sales per square foot
$
435.18

 
$
412.03

 
5.6

 —————
(1)
Selected Sales Data does not include results for the legacy Interline Brands business, now operating as a part of The Home Depot Pro.



 






THE HOME DEPOT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
in millions
May 5,
2019
 
April 29,
2018
 
February 3,
2019
Assets
 
 
 
 
 
Cash and cash equivalents
$
1,882

 
$
3,599

 
$
1,778

Receivables, net
2,317

 
2,296

 
1,936

Merchandise inventories
15,495

 
14,432

 
13,925

Other current assets
859

 
887

 
890

Total current assets
20,553

 
21,214

 
18,529

Net property and equipment
22,270

 
21,928

 
22,375

Operating lease right-of-use assets
5,629

 
—

 
—

Goodwill
2,250

 
2,281

 
2,252

Other assets
813

 
1,227

 
847

Total assets
$
51,515

 
$
46,650

 
$
44,003

 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
Short-term debt
$
372

 
$
350

 
$
1,339

Accounts payable
10,311

 
9,726

 
7,755

Accrued salaries and related expenses
1,418

 
1,413

 
1,506

Current installments of long-term debt
1,084

 
1,199

 
1,056

Current operating lease liabilities
793

 
—

 
—

Other current liabilities
5,695

 
5,445

 
5,060

Total current liabilities
19,673

 
18,133

 
16,716

Long-term debt, excluding current installments
26,804

 
24,244

 
26,807

Long-term operating lease liabilities
5,145

 
—

 
—

Other liabilities
2,036

 
2,586

 
2,358

Total liabilities
53,658

 
44,963

 
45,881

Total stockholders’ (deficit) equity
(2,143
)
 
1,687

 
(1,878
)
Total liabilities and stockholders’ equity
$
51,515

 
$
46,650

 
$
44,003





THE HOME DEPOT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended
in millions
May 5,
2019

April 29,
2018
Cash Flows from Operating Activities:



Net earnings
$
2,513


$
2,404

Reconciliation of net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
547

 
532

Stock-based compensation expense
86

 
84

Changes in working capital
1,333

 
1,031

Changes in deferred income taxes
5

 
(9
)
Other operating activities
91

 
(61
)
Net cash provided by operating activities
4,575

 
3,981

 
 
 
 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures, net of non-cash capital expenditures
(681
)
 
(556
)
Proceeds from sales of property and equipment
6

 
8

Other investing activities
(13
)
 
—

Net cash used in investing activities
(688
)
 
(548
)
 
 
 
 
Cash Flows from Financing Activities:
 
 
 
Repayments of short-term debt, net
(967
)
 
(1,209
)
Repayments of long-term debt
(15
)
 
(10
)
Repurchases of common stock
(1,368
)
 
(1,121
)
Proceeds from sales of common stock
34

 
14

Cash dividends
(1,499
)
 
(1,189
)
Other financing activities
40

 
115

Net cash used in financing activities
(3,775
)
 
(3,400
)
Change in cash and cash equivalents
112

 
33

Effect of exchange rate changes on cash and cash equivalents
(8
)
 
(29
)
Cash and cash equivalents at beginning of period
1,778

 
3,595

Cash and cash equivalents at end of period
$
1,882

 
$
3,599