ATLANTA, Feb 26, 2008 /PRNewswire-FirstCall via COMTEX News Network/ --
The Home Depot(R), the world's largest home improvement retailer, today reported fiscal 2007 fourth quarter consolidated net earnings of $671 million, or $0.40 per diluted share, compared with $925 million, or $0.46 per diluted share, in the same period in fiscal 2006. Sales for the fourth quarter totaled $17.7 billion, a 1.5 percent increase from the fourth quarter of fiscal 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO )
The fourth quarter of 2007 consisted of 14 weeks compared with 13 weeks for the prior year. The 14th week added approximately $1.1 billion in sales for the quarter and the year. Excluding the 14th week, fourth quarter sales declined by 4.7 percent compared to the fourth quarter of 2006. Comparable store sales for the quarter declined
8.3 percent. The additional week had no impact on comparable sales performance for the
quarter or the year.
Earnings per diluted share from continuing operations in the fourth quarter of fiscal 2007 were $0.40, compared to $0.42 per diluted share in the fourth quarter of fiscal 2006, a decrease of 4.8 percent. The 14th week increased earnings per diluted share for continuing operations by approximately $0.04 for the quarter and the year. Excluding the 14th week, earnings per diluted share from continuing operations declined by 14.3 percent.
Fiscal 2007
For fiscal 2007, consolidated earnings per diluted share decreased 15.1 percent to $2.37 on consolidated net earnings of $4.4 billion, compared to consolidated earnings per diluted share of $2.79 on net earnings of $5.8 billion in fiscal 2006. Excluding the 53rd week, consolidated earnings per share declined by 16.5 percent.
Earnings per diluted share from continuing operations in fiscal 2007
were $2.27, compared to $2.55 per diluted share in fiscal 2006, a decline of 11.0 percent. Excluding the 53rd week, earnings per share from continuing operations declined by 12.5 percent. Sales for fiscal 2007 were $77.3 billion, 2.1 percent below fiscal 2006. Excluding the 53rd week, sales for fiscal 2007 decreased by 3.5 percent from fiscal 2006. Comparable store sales for the year declined 6.7 percent.
"This was a difficult year financially, but I believe the progress we made on our key priorities set the foundation for the long term health of our company," said Frank Blake, chairman & CEO. "I want to personally thank our associates, who remain passionately dedicated to improving the shopping experience for our customers."
"We see the home improvement market in 2008 as challenging, but we are going to continue to focus on our five priorities and build on the
progress we made in 2007," Blake said.
2008 Financial Outlook
-- Total sales decline of 4 to 5 percent
-- Negative comps in the mid to high single digit range
-- Flat to slightly positive gross margin expansion
-- Operating margin decline of 170 to 210 basis points
-- Depreciation and amortization expense of approximately $1.9 billion
-- Income tax rate of 37.2 percent
-- Continuing operations earnings per share decline of 19 to 24 percent
-- Capital expenditures of $2.3 billion
-- 55 new store openings with 5 store relocations
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 homedepot.com in the Investor Relations section.
At the end of the fourth quarter, the Company operated a total of 2,234 retail stores, which included 1,950 The Home Depot stores in the United States (including the Commonwealth of Puerto Rico, the territory of the U.S. Virgin Islands and the territory of Guam), 165 stores in Canada, 66 stores in Mexico, 12 stores in China, as well as 2 THD Design Centers, 5 Yardbirds stores and 34 EXPO Design Center(R) locations. The Company employs approximately 350,000 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. HDE
To provide clarity about the Company's operating performance for the recently completed quarter and year, the Company supplemented the reporting of sales and earnings per share with a non-GAAP measurement to reflect a 14th week of operations which occurred during the fourth quarter of fiscal 2007. This supplemental information should not be considered in isolation or as a substitute for the GAAP measurement of sales and earnings per share.
Certain statements contained herein, including any statements related to the state of the home improvement market, the state of the construction and housing markets, reinvestment plans and our financial outlook for fiscal 2008, constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. While these statements are based on currently available information and
current expectations and projections about future events, such forward-looking statements may prove to be incorrect. Risks and uncertainties include but are not limited to: economic conditions in North America; changes in our cost structure; our ability to attract, train and retain highly qualified associates; conditions affecting customer transactions and average ticket, including, but not limited to, weather conditions, improving and streamlining operations, and customers' in-store experience. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. Additional information regarding these and other risks and uncertainties is contained in our periodic filings with the SEC, including our Annual
Report on Form 10-K for the fiscal year ended January 28, 2007.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS AND YEARS ENDED FEBRUARY 3, 2008 AND JANUARY 28, 2007
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
% In- % In-
Three Months crease Years crease
Ended(1) (De- Ended(2) (De-
2-3-08 1-28-07 crease) 2-3-08 1-28-07 crease)
NET SALES $17,659 $17,404 1.5% $77,349 $79,022 (2.1)%
Cost of Sales 11,605 11,554 0.4 51,352 52,476 (2.1)
GROSS PROFIT 6,054 5,850 3.5 25,997 26,546 (2.1)
Operating Expenses:
Selling, General
and Administrative 4,353 4,000 8.8 17,053 16,106 5.9
Depreciation and
Amortization 452 393 15.0 1,702 1,574 8.1
Total Operating
Expenses 4,805 4,393 9.4 18,755 17,680 6.1
OPERATING INCOME 1,249 1,457 (14.3) 7,242 8,866 (18.3)
Interest (Income)
Expense:
Interest and
Investment Income (7) (5) 40.0 (74) (27) 174.1
Interest Expense 199 128 55.5 696 391 78.0
Interest, net 192 123 56.1 622 364 70.9
EARNINGS FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES 1,057 1,334 (20.8) 6,620 8,502 (22.1)
Provision for Income
Taxes 386 493 (21.7) 2,410 3,236 (25.5)
EARNINGS FROM CONTINUING
OPERATIONS 671 841 (20.2) 4,210 5,266 (20.1)
EARNINGS FROM DISCONTINUED
OPERATIONS, NET OF TAX - 84 (100.0) 185 495 (62.6)
NET EARNINGS $671 $925 (27.5)% $4,395 $5,761 (23.7)%
Weighted Average Common
Shares 1,677 1,993 (15.9)% 1,849 2,054 (10.0)%
BASIC EARNINGS PER SHARE
FROM CONTINUING
OPERATIONS $0.40 $0.42 (4.8) $2.28 $2.56 (10.9)
BASIC EARNINGS PER SHARE
FROM DISCONTINUED
OPERATIONS $- $0.04 (100.0) $0.10 $0.24 (58.3)
BASIC EARNINGS PER SHARE $0.40 $0.46 (13.0) $2.38 $2.80 (15.0)
Diluted Weighted Average
Common Shares 1,680 2,004 (16.2)% 1,856 2,062 (10.0)%
DILUTED EARNINGS PER
SHARE FROM CONTINUING
OPERATIONS $0.40 $0.42 (4.8) $2.27 $2.55 (11.0)
DILUTED EARNINGS PER
SHARE FROM DISCONTINUED
OPERATIONS $- $0.04 (100.0) $0.10 $0.24 (58.3)
DILUTED EARNINGS PER
SHARE $0.40 $0.46 (13.0) $2.37 $2.79 (15.1)
SELECTED HIGHLIGHTS(3) % In- % In-
Three Months crease Years crease
Ended(1) (De- Ended(2) (De-
2-3-08 1-28-07 crease) 2-3-08 1-28-07 crease)
Number of Customer
Transactions 314 304 3.3% 1,336 1,330 0.5%
Average Ticket $54.96 $56.27 (2.3) $57.48 $58.90 (2.4)
Weighted Average Weekly
Sales per Operating
Store $553 $617 (10.4) $658 $723 (9.0)
Square Footage at End
of Period 235 224 4.9 235 224 4.9
Capital Expenditures $1,040 $974 6.8 $3,388 $3,321 2.0
Depreciation and
Amortization (4) $481 $415 15.9 $1,823 $1,682 8.4
(1) The three months ended 2-3-08 includes 14 weeks. The three months
ended 1-28-07 includes 13 weeks.
(2) The year ended 2-3-08 includes 53 weeks. The year ended 1-28-07
includes 52 weeks.
(3) Includes continuing operations only.
(4) Includes depreciation of distribution centers and tool rental
equipment included in Cost of Sales and amortization of deferred
financing costs included in Interest Expense.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF FEBRUARY 3, 2008 AND JANUARY 28, 2007
(Amounts in Millions)
2-3-08 1-28-07
(Unaudited) (Audited)
ASSETS
Cash and Short-Term Investments $457 $614
Receivables, net 1,259 3,223
Merchandise Inventories 11,731 12,822
Other Current Assets 1,227 1,341
Total Current Assets 14,674 18,000
Property and Equipment, net 27,476 26,605
Goodwill 1,209 6,314
Other Assets 965 1,344
TOTAL ASSETS $44,324 $52,263
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-Term Debt $1,747 $-
Accounts Payable 5,732 7,356
Accrued Salaries and Related Expenses 1,094 1,307
Current Installments of Long-Term Debt 300 18
Other Current Liabilities 3,833 4,250
Total Current Liabilities 12,706 12,931
Long-Term Debt 11,383 11,643
Other Long-Term Liabilities 2,521 2,659
Total Liabilities 26,610 27,233
Total Stockholders' Equity 17,714 25,030
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $44,324 $52,263
SOURCE The Home Depot
http://www.homedepot.com/
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