ATLANTA, Aug 19, 2008 /PRNewswire-FirstCall via COMTEX News Network/ --
The Home Depot(R), the world's largest home improvement retailer, today reported fiscal 2008 second quarter consolidated net earnings of $1.2 billion, or $0.71 per diluted share, compared with $1.6 billion, or $0.81 per diluted share, in the same period in fiscal 2007. Earnings per diluted share from continuing operations in the second quarter of fiscal 2008 were $0.71, compared to $0.77 per diluted share in the second quarter of fiscal 2007, a decrease of 7.8 percent.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO )
Sales for the second quarter totaled $21.0 billion, a 5.4 percent decrease from the second quarter of fiscal 2007, reflecting negative comparable store sales of 7.9 percent, offset in part by sales from new stores.
The Company's fiscal 2007
contained 53 weeks of operations. This shifted the Company's 2008 fiscal calendar. Because of
this shift, and given the seasonal nature of its business, second quarter sales, on a like for like calendar basis, were negatively impacted by approximately $160 million. Excluding the calendar shift, on a like for like basis, comparable store sales for the quarter were negative 7.2 percent.
"We continue to see pressure on our market and the consumer, generally," said Frank Blake, chairman & CEO. "Despite the macroeconomic conditions, we saw improved execution in our merchandising and operations initiatives during the past quarter. I am very proud of what our associates have accomplished in a difficult environment," said Blake.
Fiscal Year 2008 Financial Outlook
Given the continued softness in the housing and home improvement markets as well as the commitment to invest in its key retail priorities, the Company believes fiscal 2008 sales will decline by
approximately five percent and diluted earnings per share from continuing operations will decline by approximately 24 percent. This is consistent with its previous guidance. The Company's 2008 earnings per share guidance does not include its store rationalization charge from the closing of 15 stores and removal of 50 stores from its future growth pipeline.
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 second quarter, the Company operated a total of 2,257 retail stores, which included 1,965 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), 167 stores in Canada, 72 stores in Mexico, 12 stores in China, as well as 2 THD Design Centers, 5 Yardbirds stores and 34 EXPO Design Center locations. 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. HDE
Certain statements contained herein, including any statements related to the state of the home improvement market, the state of the construction and housing markets, our reinvestment plans and financial outlook, 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, 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 February 3, 2008. HDE
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS AND SIX MONTHS ENDED AUGUST 3, 2008 AND JULY 29, 2007
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
Three Months Six Months
Ended % Increase Ended % Increase
8-3-08 7-29-07 (Decrease) 8-3-08 7-29-07 (Decrease)
NET SALES $20,990 $22,184 (5.4)% $38,897 $40,729 (4.5)%
Cost of Sales 14,026 14,843 (5.5) 25,861 27,125 (4.7)
GROSS PROFIT 6,964 7,341 (5.1) 13,036 13,604 (4.2)
Operating
Expenses:
Selling, General
and Admini-
strative 4,470 4,370 2.3 9,370 8,556 9.5
Depreciation and
Amortization 452 414 9.2 896 819 9.4
Total Operating
Expenses 4,922 4,784 2.9 10,266 9,375 9.5
OPERATING INCOME 2,042 2,557 (20.1) 2,770 4,229 (34.5)
Interest (Income) Expense:
Interest and
Investment
Income (4) (27) (85.2) (7) (38) (81.6)
Interest Expense 161 172 (6.4) 328 343 (4.4)
Interest, net 157 145 8.3 321 305 5.2
EARNINGS FROM
CONTINUING OPERATIONS
BEFORE PROVISION
FOR INCOME TAXES 1,885 2,412 (21.8) 2,449 3,924 (37.6)
Provision for
Income Taxes 683 891 (23.3) 891 1,456 (38.8)
EARNINGS FROM
CONTINUING
OPERATIONS 1,202 1,521 (21.0) 1,558 2,468 (36.9)
EARNINGS FROM
DISCONTINUED
OPERATIONS,
NET OF TAX - 66 (100.0) - 165 (100.0)
NET EARNINGS $1,202 $1,587 (24.3)% $1,558 $2,633 (40.8)%
Weighted Average
Common Shares 1,680 1,960 (14.3)% 1,680 1,960 (14.3)%
BASIC EARNINGS
PER SHARE FROM
CONTINUING
OPERATIONS $0.72 $0.78 (7.7) $0.93 $1.26 (26.2)
BASIC EARNINGS
PER SHARE FROM
DISCONTINUED
OPERATIONS $- $0.03 (100.0) $- $0.08 (100.0)
BASIC EARNINGS
PER SHARE $0.72 $0.81 (11.1) $0.93 $1.34 (30.6)
Diluted Weighted
Average Common
Shares 1,685 1,969 (14.4)% 1,684 1,969 (14.5)%
DILUTED EARNINGS
PER SHARE FROM
CONTINUING
OPERATIONS $ 0.71 $0.77 (7.8) $0.93 $1.25 (25.6)
DILUTED EARNINGS
PER SHARE FROM
DISCONTINUED
OPERATIONS $- $0.03 (100.0) $- $0.08 (100.0)
DILUTED EARNINGS
PER SHARE $ 0.71 $0.81 (12.3) $0.93 $1.34 (30.6)
Note: The sum of Diluted Earnings per Share from Continuing Operations and
Diluted Earnings per Share from Discontinued Operations may not total
Diluted Earnings per Share due to rounding.
SELECTED HIGHLIGHTS (1)
Three Months Six Months
Ended % Increase Ended % Increase
8-3-08 7-29-07 (Decrease) 8-3-08 7-29-07 (Decrease)
Number of
Customer
Transactions 361 377 (4.2)% 675 695 (2.9)%
Average Ticket $57.58 $58.30 (1.2) $57.48 $58.63 (2.0)
Weighted Average
Weekly Sales per
Operating Store
(in thousands) $707 $ 772 (8.4) $662 $719 (7.9)
Square Footage at
End of Period 237 230 3.0 237 230 3.0
Capital
Expenditures $511 $ 794 (35.6) $960 $1,435 (33.1)
Depreciation and
Amortization (2) $482 $ 446 8.1% $956 $881 8.5%
(1) Includes continuing operations only.
(2) 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 AUGUST 3, 2008, JULY 29, 2007 AND FEBRUARY 3, 2008
(Amounts in Millions)
8-3-08 7-29-07 2-3-08
(Unaudited) (Unaudited) (Audited)
ASSETS
Cash and Short-Term Investments $1,062 $3,024 $457
Receivables, net 1,506 1,554 1,259
Merchandise Inventories 11,864 12,287 11,731
Other Current Assets 1,402 1,226 1,227
Current Assets of Discontinued
Operations - 3,781 -
Total Current Assets 15,834 21,872 14,674
Property and Equipment, net 27,077 26,649 27,476
Goodwill 1,218 1,189 1,209
Other Assets 970 623 965
Noncurrent Assets of Discontinued
Operations - 6,531 -
TOTAL ASSETS $45,099 $56,864 $44,324
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-Term Debt $- $- $1,747
Accounts Payable 7,122 7,686 5,732
Accrued Salaries and Related Expenses 1,062 1,077 1,094
Current Installments of Long-Term Debt 300 15 300
Other Current Liabilities 4,153 4,695 3,833
Current Liabilities of
Discontinued Operations - 1,714 -
Total Current Liabilities 12,637 15,187 12,706
Long-Term Debt 11,366 11,628 11,383
Other Long-Term Liabilities 2,447 2,459 2,521
Noncurrent Liabilities of
Discontinued Operations - 415 -
Total Liabilities 26,450 29,689 26,610
Total Stockholders' Equity 18,649 27,175 17,714
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $45,099 $56,864 $44,324
SOURCE The Home Depot
http://www.homedepot.com
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