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Form 8-K HOME DEPOT INC For: Aug 16

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August 16, 2016 6:07 AM EDT



 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 8-K
__________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 16, 2016
__________________
THE HOME DEPOT, INC.
(Exact Name of Registrant as Specified in Charter)
 __________________
Delaware
  
1-8207
  
95-3261426
(State or Other Jurisdiction
of Incorporation)
  
(Commission
File Number)
  
(IRS Employer
Identification No.)
2455 Paces Ferry Road, Atlanta, Georgia 30339
(Address of Principal Executive Offices) (Zip Code)
(770) 433-8211
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
  __________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






 
Item 2.02.     Results of Operations and Financial Condition.
On August 16, 2016, The Home Depot, Inc. (the "Company") issued a press release, attached as Exhibit 99.1 and incorporated herein by reference, announcing the Company’s financial results for the fiscal quarter ended July 31, 2016.
The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.

Item 9.01.     Financial Statements and Exhibits.
 
Exhibit
  
Description
99.1
  
Press Release of The Home Depot, Inc.

2


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
THE HOME DEPOT, INC.
 
 
 
 
By:
/s/ Carol B. Tomé
 
Name:
Carol B. Tomé
     
Title:
Chief Financial Officer and Executive Vice President – Corporate Services
Date: August 15, 2016

3


EXHIBIT INDEX
 
Exhibit
  
Description
99.1
  
Press Release of The Home Depot, Inc.



4


Exhibit 99.1
The Home Depot Announces Second Quarter Results

ATLANTA, August 16, 2016 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $26.5 billion for the second quarter of fiscal 2016, a 6.6 percent increase from the second quarter of fiscal 2015. Comparable store sales for the second quarter of fiscal 2016 were positive 4.7 percent, and comp sales for U.S. stores were positive 5.4 percent.

Net earnings for the second quarter of fiscal 2016 were $2.4 billion, or $1.97 per diluted share, compared with net earnings of $2.2 billion, or $1.73 per diluted share, in the same period of fiscal 2015. For the second quarter of fiscal 2016, diluted earnings per share increased 13.9 percent from the same period in the prior year.

“We had a solid quarter, achieving the highest quarterly sales and net earnings results in company history as housing continues to be a tailwind for our business,” said Craig Menear, chairman, CEO and president. “This was made possible by our hard working associates in their continued dedication to our customers.”

Updated Fiscal 2016 Guidance

The Company reaffirmed its fiscal 2016 sales guidance and expects sales will be up approximately 6.3 percent and comp sales will be up approximately 4.9 percent. The Company raised its diluted earnings-per-share guidance for the year and now expects diluted earnings per share to grow approximately 15.6 percent from fiscal 2015 to $6.31.

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 second quarter, the Company operated a total of 2,275 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 385,000 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; demand for credit offerings; inventory and in-stock positions; implementation of store, interconnected retail and supply chain initiatives; management of relationships with our

-more-




-2-

suppliers and vendors; the impact and expected outcome of investigations, inquiries, claims and litigation, including those related to the 2014 data breach; issues related to the payment methods we accept; 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 2016 and beyond; financial outlook; and the integration of Interline Brands, Inc. into our organization and the ability to recognize the anticipated synergies and benefits of the acquisition. 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 January 31, 2016 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
Diane Dayhoff
 
Stephen Holmes
Vice President of Investor Relations
 
Director of Corporate Communications
770-384-2666
 
770-384-5075
 
 
 
 



THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND SIX MONTHS ENDED JULY 31, 2016 AND AUGUST 2, 2015
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
 
 
Three Months Ended


 
Six Months Ended
 
 
 
July 31,
2016

August 2,
2015

% Increase
(Decrease)
 
July 31,
2016
 
August 2,
2015
 
% Increase
(Decrease)
NET SALES
$
26,472


$
24,829


6.6
 %
 
$
49,234

 
$
45,720

 
7.7
 %
Cost of Sales
17,545


16,464


6.6

 
32,516

 
30,176

 
7.8

GROSS PROFIT
8,927


8,365


6.7

 
16,718

 
15,544

 
7.6


Operating Expenses:




 
 
 
 
 
 
 
Selling, General and Administrative
4,388


4,299


2.1

 
8,669

 
8,462

 
2.4

Depreciation and Amortization
436


419


4.1

 
869

 
838

 
3.7

Total Operating Expenses
4,824


4,718


2.2

 
9,538

 
9,300

 
2.6

OPERATING INCOME
4,103


3,647


12.5

 
7,180

 
6,244

 
15.0

Interest and Other (Income) Expense:




 
 
 
 
 
 
 
Interest and Investment Income
(8
)

(149
)

(94.6
)
 
(15
)
 
(153
)
 
(90.2
)
Interest Expense
236


233


1.3

 
480

 
430

 
11.6

Interest and Other, net
228


84


N/M
 
465

 
277

 
67.9


EARNINGS BEFORE PROVISION FOR
INCOME TAXES
3,875


3,563


8.8

 
6,715

 
5,967

 
12.5

Provision for Income Taxes
1,434


1,329


7.9

 
2,471

 
2,154

 
14.7










 
 
 
 
 
 
NET EARNINGS
$
2,441


$
2,234


9.3
 %
 
$
4,244

 
$
3,813

 
11.3
 %









 
 
 
 
 
 
Weighted Average Common Shares
1,235


1,283


(3.7
)%
 
1,242

 
1,291

 
(3.8
)%
BASIC EARNINGS PER SHARE
$
1.98


$
1.74


13.8

 
$
3.42

 
$
2.95

 
15.9










 
 
 
 
 
 
Diluted Weighted Average Common Shares
1,240


1,289


(3.8
)%
 
1,247

 
1,298

 
(3.9
)%
DILUTED EARNINGS PER SHARE
$
1.97


$
1.73


13.9

 
$
3.40

 
$
2.94

 
15.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
Six Months Ended
 
 
SELECTED SALES DATA(1)
July 31,
2016
 
August 2,
2015
 
% Increase
(Decrease)
 
July 31, 2016
 
August 2, 2015
 
% Increase
(Decrease)
Number of Customer Transactions
430.0

 
420.4

 
2.3
 %
 
804.8

 
780.6

 
3.1
 %
Average Ticket (actual)
$
60.87

 
$
59.42

 
2.4

 
$
60.48

 
$
59.04

 
2.4

Sales per Square Foot (actual)
$
438.61

 
$
420.37

 
4.3

 
$
407.64

 
$
387.04

 
5.3

 
 —————
(1)
Selected Sales Data does not include results for the Interline acquisition that was completed in the third quarter of fiscal 2015.
N/M – Not Meaningful


 






THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JULY 31, 2016, AUGUST 2, 2015 AND JANUARY 31, 2016
(Unaudited)
(Amounts in Millions)


July 31,
2016
 
August 2,
2015 (1)
 
January 31,
2016 (1)
ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
4,018

 
$
4,936

 
$
2,216

Receivables, net
1,995

 
1,696

 
1,890

Merchandise Inventories
12,323

 
11,859

 
11,809

Other Current Assets
605

 
586

 
569

Total Current Assets
18,941

 
19,077

 
16,484


Property and Equipment, net
21,975

 
22,302

 
22,191

Goodwill
2,106

 
1,340

 
2,102

Other Assets
1,225

 
557

 
1,196

TOTAL ASSETS
$
44,247

 
$
43,276

 
$
41,973

 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
Short-Term Debt
$
—

 
$
—

 
$
350

Accounts Payable
8,273

 
7,495

 
6,565

Accrued Salaries and Related Expenses
1,453

 
1,384

 
1,515

Current Installments of Long-Term Debt
43

 
3,056

 
77

Other Current Liabilities
4,756

 
4,462

 
4,017

Total Current Liabilities
14,525

 
16,397

 
12,524


Long-Term Debt, excluding current installments
20,900

 
16,221

 
20,789

Other Long-Term Liabilities
2,165

 
2,021

 
2,344

Total Liabilities
37,590

 
34,639

 
35,657


Total Stockholders' Equity
6,657

 
8,637

 
6,316

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
44,247

 
$
43,276

 
$
41,973


 —————
(1)
The Consolidated Balance Sheets as of August 2, 2015 and January 31, 2016 were retrospectively adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” and ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” in the first quarter of fiscal 2016.




THE HOME DEPOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 31, 2016 AND AUGUST 2, 2015
(Unaudited)
(Amounts in Millions)
 
 
Six Months Ended
 
July 31,
2016

August 2,
2015
CASH FLOWS FROM OPERATING ACTIVITIES:



Net Earnings
$
4,244


$
3,813

Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:
 
 
 
Depreciation and Amortization
978


915

Stock-Based Compensation Expense
133


122

Gain on Sales of Investments
—

 
(144
)
Changes in Working Capital and Other
1,522


1,228

Net Cash Provided by Operating Activities
6,877


5,934


CASH FLOWS FROM INVESTING ACTIVITIES:



Capital Expenditures
(697
)

(705
)
Proceeds from Sales of Investments
—

 
144

Proceeds from Sales of Property and Equipment
23


8

Net Cash Used in Investing Activities
(674
)

(553
)

CASH FLOWS FROM FINANCING ACTIVITIES:



Repayments of Short-Term Borrowings, net
(350
)

(290
)
Proceeds from Long-Term Borrowings, net of discounts
2,989

 
2,492

Repayments of Long-Term Debt
(3,023
)

(19
)
Repurchases of Common Stock
(2,441
)

(3,085
)
Proceeds from Sales of Common Stock
121


134

Cash Dividends Paid to Stockholders
(1,718
)

(1,533
)
Other Financing Activities
1


161

Net Cash Used in Financing Activities
(4,421
)

(2,140
)
Change in Cash and Cash Equivalents
1,782


3,241

Effect of Exchange Rate Changes on Cash and Cash Equivalents
20


(28
)
Cash and Cash Equivalents at Beginning of Period
2,216


1,723

Cash and Cash Equivalents at End of Period
$
4,018


$
4,936




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