The Home Depot Announces First Quarter Results; Updates Fiscal Year 2014 Guidance

ATLANTA, May 20, 2014 /CNW/ - The Home Depot^®, the world's largest home improvement retailer, today reported first quarter of fiscal 2014 net earnings of $1.4 billion, or $1.00 per diluted share, compared with net earnings of $1.2 billion, or $0.83 per diluted share, in the same period of fiscal 2013. For the first quarter of fiscal 2014, diluted earnings per share increased 20.5 percent from the same period in the prior year.

First quarter of fiscal 2014 results reflect a benefit to earnings, net of tax, of $61 million, or $0.04 per diluted share, related to the sale of a portion of the company's equity ownership in HD Supply Holdings, Inc.

Total sales for the first quarter of fiscal 2014 were $19.7 billion, a 2.9 percent increase from the first quarter of fiscal 2013. Comparable store sales for the first quarter of fiscal 2014 were positive 2.6 percent, and comp sales for the U.S. stores were positive 3.3 percent.

"The first quarter was impacted by a slow start to the spring selling season. But we had solid results in non-weather impacted markets and expect our sales for the year to grow in line with the guidance we previously provided," said Frank Blake, chairman and CEO. "I would like to thank our associates for their hard work and dedication."

Updated Fiscal 2014 Guidance

The Company reaffirmed that it expects fiscal 2014 sales will be up approximately 4.8 percent from fiscal 2013. The Company raised its fiscal 2014 diluted earnings-per-share guidance and now expects diluted earnings-per-share to be up approximately 17.6 percent to $4.42 for the year. This earnings-per-share guidance includes the $0.04 per diluted share benefit related to the sale of HD Supply common stock, the benefit of the Company's year-to-date share repurchases and the Company's intent to repurchase $3.75 billion in additional 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 first quarter, the Company operated a total of 2,263 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.

THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MAY 4, 2014 AND MAY 5, 2013
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
	Three Months Ended
	May 4, 2014				May 5, 2013				% Increase (Decrease)
NET SALES	$	19,687			$	19,124			2.9	%
Cost of Sales	12,802				12,445				2.9
GROSS PROFIT	6,885				6,679				3.1
Operating Expenses:
Selling, General and Administrative	4,194				4,183				0.3
Depreciation and Amortization	414				402				3.0
Total Operating Expenses	4,608				4,585				0.5
OPERATING INCOME	2,277				2,094				8.7
Interest and Other (Income) Expense:
Interest and Investment Income	(100)				(3)				N/M
Interest Expense	191				164				16.5
Interest and Other, net	91				161				(43.5)
EARNINGS BEFORE PROVISION FOR INCOME TAXES	2,186				1,933				13.1
Provision for Income Taxes	807				707				14.1
NET EARNINGS	$	1,379			$	1,226			12.5	%
Weighted Average Common Shares	1,367				1,468				(6.9)	%
BASIC EARNINGS PER SHARE	$	1.01			$	0.84			20.2
Diluted Weighted Average Common Shares	1,376				1,478				(6.9)	%
DILUTED EARNINGS PER SHARE	$	1.00			$	0.83			20.5
	Three Months Ended
SELECTED HIGHLIGHTS	May 4, 2014				May 5, 2013				% Increase (Decrease)
Number of Customer Transactions	344.5				337.1				2.2	%
Average Ticket (actual)	$	57.59			$	57.24			0.6
Sales per Square Foot (actual)	$	334.01			$	328.17			1.8

N/M – Not Meaningful

THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MAY 4, 2014, MAY 5, 2013 AND FEBRUARY 2, 2014
(Unaudited)
(Amounts in Millions)
	May 4, 2014				May 5, 2013				February 2, 2014
ASSETS
Cash and Cash Equivalents	$	2,511			$	4,337			$	1,929
Receivables, net	1,831				1,658				1,398
Merchandise Inventories	12,343				11,825				11,057
Other Current Assets	830				800				895
Total Current Assets	17,515				18,620				15,279
Property and Equipment, net	23,238				23,906				23,348
Goodwill	1,293				1,187				1,289
Other Assets	583				482				602
TOTAL ASSETS	$	42,629			$	44,195			$	40,518
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable	$	7,739			$	7,384			$	5,797
Accrued Salaries and Related Expenses	1,233				1,264				1,428
Current Installments of Long-Term Debt	34				1,332				33
Other Current Liabilities	4,259				4,038				3,491
Total Current Liabilities	13,265				14,018				10,749
Long-Term Debt, excluding current installments	14,707				11,460				14,691
Other Long-Term Liabilities	2,511				2,324				2,556
Total Liabilities	30,483				27,802				27,996
Total Stockholders' Equity	12,146				16,393				12,522
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	42,629			$	44,195			$	40,518

THE HOME DEPOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MAY 4, 2014 AND MAY 5, 2013
(Unaudited)
(Amounts in Millions)
	Three Months Ended
	May 4, 2014				May 5, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings	$	1,379			$	1,226
Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:
Depreciation and Amortization	447				435
Stock-Based Compensation Expense	67				65
Changes in Working Capital and Other	675				971
Net Cash Provided by Operating Activities	2,568				2,697
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures	(287)				(278)
Payments for Businesses Acquired, net	—				(13)
Proceeds from Sales of Property and Equipment	7				15
Net Cash Used in Investing Activities	(280)				(276)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Long-Term Borrowings, net of discount	—				1,994
Repayments of Long-Term Debt	(12)				(8)
Repurchases of Common Stock	(1,250)				(2,196)
Proceeds from Sales of Common Stock	69				64
Cash Dividends Paid to Stockholders	(646)				(577)
Other Financing Activities	133				134
Net Cash Used in Financing Activities	(1,706)				(589)
Change in Cash and Cash Equivalents	582				1,832
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—				11
Cash and Cash Equivalents at Beginning of Period	1,929				2,494
Cash and Cash Equivalents at End of Period	$	2,511			$	4,337

Logo- http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO

SOURCE: The Home Depot

Financial Community, Diane Dayhoff, Vice President of Investor Relations, 770-384-2666, [email protected]; News Media, Stephen Holmes, Director of Corporate Communications, 770-384-5075, [email protected]

http://www.homedepot.com

http://photos.prnewswire.com/prnh/20030502/HOMEDEPOTLOGO