ATLANTA, Feb 24, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- The Home Depot(R), the world's
largest home improvement retailer, today reported a fiscal 2008 fourth quarter
consolidated net loss of $54 million, or a loss of $0.03 per diluted share,
compared with net earnings of $671 million, or $0.40 per diluted share, in the
same period in fiscal 2007. These results reflect a pre-tax business
rationalization charge of $387 million, a pre-tax write-down of the Company's
investment in HD Supply of $163 million, as well as a loss from discontinued
operations of $52 million, net of tax.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO )
The business rationalization charge refers to the action the Company took
in the fourth quarter to exit its EXPO, THD Design Center, YardBIRDS and HD
Bath businesses and reduce support staff functions.
Earnings per diluted share from continuing operations in the fourth
quarter of fiscal 2008 were $0.00, compared to net earnings per diluted share
of $0.40 in the fourth quarter of fiscal 2007. Excluding the business
rationalization charge and the write-down of the Company's investment in HD
Supply, earnings per diluted share from continuing operations were $0.19 for
the fourth quarter, a decrease of 52.5 percent compared to fourth quarter
2007.
Sales for the fourth quarter totaled $14.6 billion, a 17.3 percent
decrease from the fourth quarter of fiscal 2007. The fourth quarter of 2008
consisted of 13 weeks compared with 14 weeks of sales in the fourth quarter of
fiscal 2007. Excluding the additional week in 2007, sales declined by 12.0
percent from the fourth quarter of fiscal 2007. Comparable store sales for
the fourth quarter were negative 13.0 percent and were negatively impacted by
the calendar shift in 2008. Excluding the calendar shift, comparable store
sales were negative 11.5 percent. Like-for-like comparable store sales for
U.S. stores were negative 9.2 percent.
Fiscal 2008
For fiscal 2008, consolidated earnings per diluted share decreased 43.5
percent to $1.34 on consolidated net earnings of $2.3 billion, compared to
consolidated earnings per diluted share of $2.37 on consolidated net earnings
of $4.4 billion in fiscal 2007. Fiscal 2008 results reflect a $1.1 billion
charge related to both the recently announced business rationalization charge
of $387 million and the write-down of the Company's investment in HD Supply of
$163 million in the fourth quarter, as well as a $564 million store
rationalization charge related to the closing of 15 stores and the removal of
50 stores from the Company's new store pipeline taken earlier in the year.
Fiscal 2008 results also include a loss from discontinued operations of $52
million, net of tax, or $0.03 per diluted share.
Earnings per diluted share from continuing operations in fiscal 2008 were
$1.37, compared to $2.27 per diluted share from continuing operations in
fiscal 2007, a decline of 39.6 percent. Excluding the store rationalization
charge, the business rationalization charge and the write-down of the
Company's investment in HD Supply, earnings per diluted share from continuing
operations were $1.78, down 21.6 percent.
Sales for fiscal 2008 were $71.3 billion, 7.8 percent below fiscal 2007.
Excluding last year's extra week, sales declined by 6.5 percent. Comparable
store sales for the year declined 8.7 percent and were not meaningfully
impacted by the calendar shift.
"Despite the difficult economic conditions, the Company made important
progress in key areas," said Frank Blake, chairman & CEO. "We improved
customer service ratings, as measured by customer surveys and third parties.
We maintained sound inventory control, reducing inventory by over $1 billion
while achieving the best in-stock rate we have had for several years. We
launched an effective new lower price campaign. And we made strategic
business decisions, exiting non-core businesses and significantly reducing
square footage growth, which will better position us for the future. The hard
work and dedication of our associates made these accomplishments possible.
"We expect the home improvement market in 2009 will remain just as
challenging as 2008, but we will continue to invest in our associates and
stores to set a strong foundation for the long term health of our company,"
said Blake.
2009 Financial Outlook (based on GAAP)
-- Total sales: decline of approximately 9 percent
-- Comparable store sales: high single digit negative
-- Gross margin: flat to slight expansion
-- Total expenses as a percent of sales: flat year over year
-- Includes approximately $132 million of expense in fiscal 2009
related to the fourth quarter fiscal 2008 business
rationalization charge
-- Operating Margin: flat to slightly up
-- Tax rate: 36 percent
-- EPS from continuing operations: decline of approximately 7 percent
-- Capital expenditures: approximately $1 billion
-- New stores: 12 net new
-- Depreciation and amortization expense: approximately $1.9 billion
Other Key Items Related to 2009 Financial Outlook
-- For fiscal 2008, the EXPO, THD Design Center, YardBIRDS and HD Bath
businesses had sales of $927 million and a net operating loss of
$43 million.
-- Assumes no further share repurchases in 2009.
-- Does not include potential sales lift due to the economic stimulus
package.
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 2,274
retail stores, which included 1,971 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), 176 stores in Canada, 74 stores in Mexico,
12 stores in China, as well as 2 THD Design Centers, 5 YardBIRDS stores and 34
EXPO Design Center(R) locations. On January 26, 2009, the Company announced
plans to close the EXPO, THD Design Center and YardBIRDS stores as part of the
Company's initiative to focus on its core business. 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
To provide clarity about the Company's operating performance for the
recently completed fiscal quarter and year, the Company supplemented its
reporting of earnings per share with non-GAAP measurements to reflect the
impact of the store rationalization charge, business rationalization charge
and investment write-down. The Company believes such non-GAAP measurements
provide management and investors with meaningful information to understand and
analyze the Company's performance. However, this supplemental information
should not be considered in isolation or as a substitute for the GAAP
measurements of earnings per share. A reconciliation of the supplemental
information to the comparable GAAP measurements can be found in the attached
schedule.
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, store openings and closures, state of the economy, state of the
construction, housing and home improvement markets, reinvestment plans, net
earnings performance, earnings per share, capital allocation and expenditures,
liquidity, the effect of charges and financial outlook. Such forward-looking
statements are based on currently available information and current
assumptions, expectations and projections about future events. You are
cautioned not to place undue reliance on our forward-looking statements. Such
statements 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. Such risks and
uncertainties include but are not limited to: economic conditions in North
America and in other countries where we operate; possible adverse impact of
such conditions on our customers, including, but not limited to, unemployment,
foreclosures and availability of consumer credit; changes in our cost
structure; and conditions affecting customer transactions and average ticket,
including, but not limited to, improving and streamlining operations and
customers' in-store experience. Material risks and uncertainties that could
cause actual results to differ materially from our expectations and
projections are described in our Annual Report on Form 10-K for our fiscal
year ended February 3, 2008 and our Quarterly Report on Form 10-Q for our
fiscal quarter ended November 2, 2008. There also may be other factors that
we cannot anticipate or that are not described herein because we do not
perceive them to be material. Such factors could cause results to differ
materially from our expectations. Forward-looking statements speak only as of
the date they are made, and we do not undertake to update such statements
other than as required by law.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS ITEMS EXCLUDING CERTAIN CHARGES
(NON-GAAP)
FOR THE THREE MONTHS AND YEARS ENDED FEBRUARY 1, 2009 AND FEBRUARY 3, 2008
(Unaudited)
(Amounts in Millions Except Per Share Data)
Three Months
Three Months Ended Ended
2-1-09(1) 2-3-08(1)
As
Adjusted
to
Exclude
Charges
Charges (Non-
Actuals (3) GAAP) Actuals
Gross Profit $4,960 $(20) $4,980 $6,054
Total Operating Expenses 4,694 367 4,327 4,805
Operating Income 266 (387) 653 1,249
Interest and Other, net 297 163 134 192
Earnings (Loss) from Continuing
Operations (2) (329) 327 671
Earnings (Loss) from Discontinuing
Operations, Net of Tax (52) - (52) -
Net Earnings (Loss) $(54) $(329) $275 $671
Diluted Earnings Per Share from
Continuing Operations $- $(0.20) $0.19 $0.40
Diluted Earnings (Loss) Per Share
from Discontinuing Operations $(0.03) $- $(0.03) $-
Diluted Earnings (Loss) Per Share $(0.03) $(0.20) $0.16 $0.40
Year Ended
Year Ended 2-1-09(2) 2-3-08(2)
As
Adjusted
to
Exclude
Charges
Charges (Non-
Actuals (3) GAAP) Actuals
Gross Profit $23,990 $(30) $24,020 $25,997
Total Operating Expenses 19,631 921 18,710 18,755
Operating Income 4,359 (951) 5,310 7,242
Interest and Other, net 769 163 606 622
Earnings from Continuing
Operations 2,312 (684) 2,996 4,210
Earnings (Loss) from
Discontinuing Operations, Net of Tax (52) - (52) 185
Net Earnings $2,260 $(684) $2,944 $4,395
Diluted Earnings Per Share from
Continuing Operations $1.37 $(0.41) $1.78 $2.27
Diluted Earnings (Loss) Per Share
from Discontinuing Operations $(0.03) $- $(0.03) $0.10
Diluted Earnings Per Share $1.34 $(0.41) $1.75 $2.37
Note: Certain amounts in Diluted Earnings (Loss) Per Share may not foot
due to rounding.
(1) The three months ended 2-1-09 includes 13 weeks. The three months
ended 2-3-08 includes 14 weeks.
(2) The year ended 2-1-09 includes 52 weeks. The year ended 2-3-08
includes 53 weeks.
(3) Charges are comprised of store rationalization charges, business
rationalization charges related to the exit of EXPO, THD Design
Center, YardBIRDS and HD Bath businesses, charges related to
restructuring of support functions and an investment impairment
charge.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS AND YEARS ENDED FEBRUARY 1, 2009
AND FEBRUARY 3, 2008
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
Three Months Ended (1) Years Ended (1)
% %
Increase Increase
2-1-09 2-3-08 (Decrease) 2-1-09 2-3-08 (Decrease)
NET SALES $14,607 $17,659 (17.3)% $71,288 $77,349 (7.8)%
Cost of Sales 9,647 11,605 (16.9) 47,298 51,352 (7.9)
GROSS PROFIT 4,960 6,054 (18.1) 23,990 25,997 (7.7)
Operating Expenses:
Selling, General
and
Administrative 4,251 4,353 (2.3) 17,846 17,053 4.7
Depreciation and
Amortization 443 452 (2.0) 1,785 1,702 4.9
Total Operating
Expenses 4,694 4,805 (2.3) 19,631 18,755 4.7
OPERATING INCOME 266 1,249 (78.7) 4,359 7,242 (39.8)
Interest and Other
(Income) Expense:
Interest and
Investment Income (5) (7) (28.6) (18) (74) (75.7)
Interest Expense 139 199 (30.2) 624 696 (10.3)
Other 163 - - 163 - -
Interest and Other,
net 297 192 54.7 769 622 23.6
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS
BEFORE PROVISION
(CREDIT) FOR INCOME
TAXES (31) 1,057 (102.9) 3,590 6,620 (45.8)
Provision (Credit)
for Income Taxes (29) 386 (107.5) 1,278 2,410 (47.0)
EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS (2) 671 (100.3) 2,312 4,210 (45.1)
EARNINGS (LOSS)
FROM DISCONTINUED
OPERATIONS, NET OF
TAX (52) - - (52) 185 (128.1)
NET EARNINGS
(LOSS) $(54) $671 (108.0)% $2,260 $4,395 (48.6)%
Weighted Average
Common Shares 1,681 1,677 0.2% 1,682 1,849 (9.0)%
BASIC EARNINGS PER
SHARE FROM CONTINUING
OPERATIONS $- $0.40 (100.0) $1.37 $2.28 (39.9)
BASIC EARNINGS (LOSS)
PER SHARE FROM
DISCONTINUED
OPERATIONS $(0.03) $- - $(0.03) $0.10 (130.0)
BASIC EARNINGS
(LOSS) PER SHARE $(0.03) $0.40 (107.5) $1.34 $2.38 (43.7)
Diluted Weighted
Average Common
Shares 1,686 1,680 0.4% 1,686 1,856 (9.2)%
DILUTED EARNINGS
PER SHARE FROM
CONTINUING
OPERATIONS $- $0.40 (100.0) $1.37 $2.27 (39.6)
DILUTED EARNINGS
(LOSS) PER SHARE
FROM DISCONTINUED
OPERATIONS $(0.03) $- - $(0.03) $0.10 (130.0)
DILUTED EARNINGS
(LOSS) PER SHARE $(0.03) $0.40 (107.5) $1.34 $2.37 (43.5)
Three Months Ended (1) Years Ended (1)
SELECTED % %
HIGHLIGHTS(2) Increase Increase
2-1-09 2-3-08 (Decrease) 2-1-09 2-3-08 (Decrease)
Number of Customer
Transactions 282 314 (10.2)% 1,272 1,336 (4.8)%
Average Ticket
(actual) $50.87 $54.96 (7.4) $55.61 $57.48 (3.3)
Weighted Average
Weekly Sales per
Operating Store
(in thousands) $485 $553 (12.3) $601 $658 (8.7)
Square Footage at End
of Period 238 235 1.3 238 235 1.3
Capital Expenditures $436 $1,040 (58.1) $1,847 $3,388 (45.5)
Depreciation and
Amortization (3) $470 $481 (2.3)% $1,902 $1,823 4.3 %
(1) The three months ended 2-1-09 includes 13 weeks and the three months
ended 2-3-08 includes 14 weeks. The year ended 2-1-09 includes 52
weeks and the year ended 2-3-08 includes 53 weeks. The additional
week included in the three months and year ended 2-3-08 added
$1.1 billion to Net Sales and $0.04 to Diluted Earnings per Share.
(2) Includes continuing operations only.
(3) 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 1, 2009 AND FEBRUARY 3, 2008
(Amounts in Millions)
2-1-09 2-3-08
(Unaudited) (Audited)
ASSETS
Cash and Short-Term Investments $525 $457
Receivables, net 972 1,259
Merchandise Inventories 10,673 11,731
Other Current Assets 1,192 1,227
Total Current Assets 13,362 14,674
Property and Equipment, net 26,234 27,476
Goodwill 1,134 1,209
Other Assets 434 965
TOTAL ASSETS $41,164 $44,324
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-Term Debt $- $1,747
Accounts Payable 4,822 5,732
Accrued Salaries and Related
Expenses 1,129 1,094
Current Installments of Long-Term
Debt 1,767 300
Other Current Liabilities 3,435 3,833
Total Current Liabilities 11,153 12,706
Long-Term Debt 9,667 11,383
Other Long-Term Liabilities 2,567 2,521
Total Liabilities 23,387 26,610
Total Stockholders' Equity 17,777 17,714
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $41,164 $44,324
SOURCE The Home Depot
http://www.homedepot.com
Copyright (C) 2009 PR Newswire. All rights reserved