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Form 8-K HOME DEPOT INC For: Nov 15

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November 15, 2016 6:18 AM EST



 

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): November 15, 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 November 15, 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 October 30, 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: November 14, 2016

3


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



4


Exhibit 99.1
hdlogoa02a01a01a01a01a04.jpg
The Home Depot Announces Third Quarter Results

ATLANTA, November 15, 2016 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $23.2 billion for the third quarter of fiscal 2016, a 6.1 percent increase from the third quarter of fiscal 2015. Comparable store sales for the third quarter of fiscal 2016 were positive 5.5 percent, and comp sales for U.S. stores were positive 5.9 percent.

Net earnings for the third quarter of fiscal 2016 were $2.0 billion, or $1.60 per diluted share, compared with net earnings of $1.7 billion, or $1.35 per diluted share, in the same period of fiscal 2015. For the third quarter of fiscal 2016, diluted earnings per share increased 18.5 percent from the same period in the prior year.

“We experienced balanced sales growth in the quarter driven by an increase in both ticket and transactions, and our continued focus on productivity drove double-digit earnings-per-share growth,” said Craig Menear, chairman, CEO and president. “I would like to thank our associates and suppliers for their hard work and dedication to our customers throughout the quarter, and particularly in the face of Hurricane Matthew and the flooding in Louisiana.”

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 15.9 percent from fiscal 2015 to $6.33.

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 third quarter, the Company operated a total of 2,276 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

-more-




-2-

store, interconnected retail and supply chain initiatives; management of relationships with our 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 NINE MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015
(Unaudited)
(Amounts in Millions Except Per Share Data and as Otherwise Noted)
 
 
Three Months Ended


 
Nine Months Ended
 
 
 
October 30,
2016

November 1,
2015

% Increase
(Decrease)
 
October 30,
2016
 
November 1,
2015
 
% Increase
(Decrease)
NET SALES
$
23,154


$
21,819


6.1
 %
 
$
72,388

 
$
67,539

 
7.2
 %
Cost of Sales
15,112


14,254


6.0

 
47,628

 
44,430

 
7.2

GROSS PROFIT
8,042


7,565


6.3

 
24,760

 
23,109

 
7.1


Operating Expenses:




 
 
 
 
 
 
 
Selling, General and Administrative
4,280


4,161


2.9

 
12,949

 
12,623

 
2.6

Depreciation and Amortization
442


423


4.5

 
1,311

 
1,261

 
4.0

Total Operating Expenses
4,722


4,584


3.0

 
14,260

 
13,884

 
2.7

OPERATING INCOME
3,320


2,981


11.4

 
10,500

 
9,225

 
13.8

Interest and Other (Income) Expense:




 
 
 
 
 
 
 
Interest and Investment Income
(10
)

(7
)

42.9

 
(25
)
 
(160
)
 
(84.4
)
Interest Expense
246


247


(0.4
)
 
726

 
677

 
7.2

Interest and Other, net
236


240


(1.7
)
 
701

 
517

 
35.6


EARNINGS BEFORE PROVISION FOR
INCOME TAXES
3,084


2,741


12.5

 
9,799

 
8,708

 
12.5

Provision for Income Taxes
1,115


1,016


9.7

 
3,586

 
3,170

 
13.1










 
 
 
 
 
 
NET EARNINGS
$
1,969


$
1,725


14.1
 %
 
$
6,213

 
$
5,538

 
12.2
 %









 
 
 
 
 
 
Weighted Average Common Shares
1,224


1,268


(3.5
)%
 
1,236

 
1,284

 
(3.7
)%
BASIC EARNINGS PER SHARE
$
1.61


$
1.36


18.4

 
$
5.03

 
$
4.31

 
16.7










 
 
 
 
 
 
Diluted Weighted Average Common Shares
1,229


1,274


(3.5
)%
 
1,242

 
1,290

 
(3.7
)%
DILUTED EARNINGS PER SHARE
$
1.60


$
1.35


18.5

 
$
5.00

 
$
4.29

 
16.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
SELECTED SALES DATA(1)
October 30,
2016
 
November 1,
2015
 
% Increase
(Decrease)
 
October 30, 2016
 
November 1, 2015
 
% Increase
(Decrease)
Number of Customer Transactions
380.0

 
371.1

 
2.4
 %
 
1,184.8

 
1,151.7

 
2.9
 %
Average Ticket (actual)
$
59.78

 
$
58.03

 
3.0

 
$
60.26

 
$
58.72

 
2.6

Sales per Square Foot (actual)
$
382.18

 
$
366.37

 
4.3

 
$
399.12

 
$
380.12

 
5.0

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



 






THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF OCTOBER 30, 2016, NOVEMBER 1, 2015 AND JANUARY 31, 2016
(Unaudited)
(Amounts in Millions)


October 30,
2016
 
November 1,
2015 (1)
 
January 31,
2016 (1)
ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
3,589

 
$
3,040

 
$
2,216

Receivables, net
1,995

 
1,942

 
1,890

Merchandise Inventories
13,241

 
12,495

 
11,809

Other Current Assets
523

 
527

 
569

Total Current Assets
19,348

 
18,004

 
16,484


Property and Equipment, net
21,840

 
22,194

 
22,191

Goodwill
2,095

 
2,111

 
2,102

Other Assets
1,219

 
1,167

 
1,196

TOTAL ASSETS
$
44,502

 
$
43,476

 
$
41,973

 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
Short-Term Debt
$
—

 
$
—

 
$
350

Accounts Payable
8,054

 
7,236

 
6,565

Accrued Salaries and Related Expenses
1,398

 
1,354

 
1,515

Current Installments of Long-Term Debt
543

 
3,047

 
77

Other Current Liabilities
4,436

 
4,338

 
4,017

Total Current Liabilities
14,431

 
15,975

 
12,524


Long-Term Debt, excluding current installments
22,338

 
17,713

 
20,789

Other Long-Term Liabilities
2,111

 
2,169

 
2,344

Total Liabilities
38,880

 
35,857

 
35,657


Total Stockholders' Equity
5,622

 
7,619

 
6,316

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
44,502

 
$
43,476

 
$
41,973


 —————
(1)
The Consolidated Balance Sheets as of November 1, 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 NINE MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015
(Unaudited)
(Amounts in Millions)
 
 
Nine Months Ended
 
October 30,
2016

November 1,
2015
CASH FLOWS FROM OPERATING ACTIVITIES:



Net Earnings
$
6,213


$
5,538

Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:
 
 
 
Depreciation and Amortization
1,474


1,384

Stock-Based Compensation Expense
199


177

Gain on Sales of Investments
—

 
(144
)
Changes in Working Capital and Other
33


411

Net Cash Provided by Operating Activities
7,919


7,366


CASH FLOWS FROM INVESTING ACTIVITIES:



Capital Expenditures
(1,145
)

(1,083
)
Proceeds from Sales of Investments
—

 
144

Payments for Businesses Acquired, net
—


(1,662
)
Proceeds from Sales of Property and Equipment
30


24

Net Cash Used in Investing Activities
(1,115
)

(2,577
)

CASH FLOWS FROM FINANCING ACTIVITIES:



Repayments of Short-Term Borrowings, net
(350
)

(290
)
Proceeds from Long-Term Borrowings, net of discounts
4,959

 
3,991

Repayments of Long-Term Debt
(3,034
)

(29
)
Repurchases of Common Stock
(4,535
)

(5,043
)
Proceeds from Sales of Common Stock
136


149

Cash Dividends Paid to Stockholders
(2,567
)

(2,287
)
Other Financing Activities
(33
)

86

Net Cash Used in Financing Activities
(5,424
)

(3,423
)
Change in Cash and Cash Equivalents
1,380


1,366

Effect of Exchange Rate Changes on Cash and Cash Equivalents
(7
)

(49
)
Cash and Cash Equivalents at Beginning of Period
2,216


1,723

Cash and Cash Equivalents at End of Period
$
3,589


$
3,040




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