Home Depot (HD) Tops Q4 EPS by 11c; Boosts Qtr. Dividend, Approves $18B Buyback

February 24, 2015 6:02 AM EST

Home Depot (NYSE: HD) reported Q4 EPS of $1.00, $0.11 better than the analyst estimate of $0.89. Revenue for the quarter came in at $19.2 billion versus the consensus estimate of $18.7 billion.

Comparable store sales for the fourth quarter of fiscal 2014 were positive 7.9 percent, and comp sales for U.S. stores were positive 8.9 percent.

Capital Allocation Strategy

The Company today announced that its board of directors declared a 26 percent increase in its quarterly dividend to $0.59 cents per share. "The board increased the dividend for the sixth time in as many years, representing our commitment to create value for our shareholders," said Menear. The dividend is payable on March 26, 2015, to shareholders of record on the close of business on March 12, 2015. This is the 112th consecutive quarter the Company has paid a cash dividend.

The board of directors also authorized an $18.0 billion share repurchase program, replacing its previous authorization. Since 2002 and through February 1, 2015, the Company has returned more than $53 billion of cash to shareholders through repurchases, repurchasing approximately 1.2 billion shares.

Combined with today's announcements, the Company reiterated its capital allocation principles:

  • Dividend Principle: Targeting a dividend payout ratio of approximately 50 percent.
  • Share Repurchase Principle: After meeting the needs of the business, will use excess cash to repurchase shares, with the intent of completing $18.0 billion of share repurchases by the end of fiscal 2017.
  • Return on Invested Capital Principle: Maintain a high return on invested capital, with a goal of reaching 27 percent by the end of fiscal 2015.

Home Depot sees FY2015 EPS of $5.11-$5.17, versus the consensus of $5.23.

For earnings history and earnings-related data on Home Depot (HD) click here.

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