Home Depot : Announces Third Quarter Results - Form 8-K

The Home Depot Announces Third Quarter Results

ATLANTA, November 16, 2021 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $36.8 billion for the third quarter of fiscal 2021, an increase of $3.3 billion, or 9.8 percent from the third quarter of fiscal 2020. Comparable sales for the third quarter of fiscal 2021 increased 6.1 percent, and comparable sales in the U.S. increased 5.5 percent.

Net earnings for the third quarter of fiscal 2021 were $4.1 billion, or $3.92 per diluted share, compared with net earnings of $3.4 billion, or $3.18 per diluted share, in the same period of fiscal 2020. For the third quarter of fiscal 2021, diluted earnings per share increased 23.3 percent from the same period in the prior year.

"As evidenced by our strong performance in the quarter, our team continues to do an outstanding job of operating with flexibility and agility," said Craig Menear, chairman and CEO. "Ultimately, this is what has allowed us to respond to the elevated home improvement demand that has persisted. I would like to extend my sincere appreciation to our team, as well as our supplier, supply chain, and transportation partners, as we continue to navigate this dynamic environment together."

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 ir.homedepot.com/events-and-presentations.

At the end of the third quarter, the Company operated a total of 2,317 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico, including 14 stores from a small acquisition completed during the second quarter of fiscal 2021. The Company employs approximately 500,000 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.

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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 impact of the COVID-19 pandemic and the related recovery on our business, operations and financial results (which, among other things, may affect many of the items listed below); the demand for our products and services; net sales growth; comparable sales; effects of competition; our brand and reputation; implementation of store, interconnected retail, supply chain and technology initiatives; inventory and in-stock positions; state of the economy; state of the housing and home improvement markets; state of the credit markets, including mortgages, home equity loans and consumer credit; impact of tariffs; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, potential associates, suppliers and service providers; international trade disputes, natural disasters, public health issues (including pandemics and quarantines, related shut-downs and other governmental orders, and similar restrictions, as well as subsequent re-openings), and other business interruptions that could disrupt supply or delivery of, or demand

for, the Company's products or services; continuation or suspension of share repurchases; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity or other price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims and litigation, including compliance with related settlements; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes, including changes to tax laws and regulations; store openings and closures; guidance for fiscal 2021 and beyond; financial outlook; and the impact of acquired companies, including HD Supply Holdings, Inc., on our organization and the ability to recognize the anticipated benefits of those acquisitions. 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, dependent on the actions of third parties, 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, 2021 and in our subsequent Quarterly Reports on Form 10-Q. There also may be other factors we cannot anticipate that are not described herein, generally because we do not currently 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 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 and in our other public statements.

For more information, contact:

Financial Community	News Media
Isabel Janci	Margaret Smith
Vice President of Investor Relations and Treasurer	Senior Manager of Corporate Communications
770-384-2666	470-564-0284
[e-mail]	[e-mail]

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended	Nine Months Ended
in millions, except per share data	October 31, 2021	November 1, 2020	% Change	October 31, 2021	November 1, 2020	% Change
Net sales	$	36,820	$	33,536	9.8	%	$	115,438	$	99,849	15.6	%
Cost of sales	24,257	22,080	9.9	76,468	65,827	16.2
Gross profit	12,563	11,456	9.7	38,970	34,022	14.5
Operating expenses:
Selling, general and administrative	6,168	6,076	1.5	18,975	18,260	3.9
Depreciation and amortization	600	528	13.6	1,780	1,567	13.6
Total operating expenses	6,768	6,604	2.5	20,755	19,827	4.7
Operating income	5,795	4,852	19.4	18,215	14,195	28.3
Interest and other (income) expense:
Interest and investment income	(15)	(11)	36.4	(26)	(37)	(29.7)
Interest expense	341	340	0.3	1,006	1,010	(0.4)
Interest and other, net	326	329	(0.9)	980	973	0.7
Earnings before provision for income taxes	5,469	4,523	20.9	17,235	13,222	30.4
Provision for income taxes	1,340	1,091	22.8	4,154	3,213	29.3
Net earnings	$	4,129	$	3,432	20.3	%	$	13,081	$	10,009	30.7	%
Basic weighted average common shares	1,049	1,073	(2.2)	%	1,059	1,074	(1.4)	%
Basic earnings per share	$	3.94	$	3.20	23.1	$	12.35	$	9.32	32.5
Diluted weighted average common shares	1,053	1,078	(2.3)	%	1,063	1,078	(1.4)	%
Diluted earnings per share	$	3.92	$	3.18	23.3	$	12.31	$	9.28	32.7
Three Months Ended	Nine Months Ended
Selected Sales Data(1)	October 31, 2021	November 1, 2020	% Change	October 31, 2021	November 1, 2020	% Change
Customer transactions (in millions)	428.2	453.2	(5.5)	%	1,357.2	1,339.5	1.3	%
Average ticket	$	82.38	$	72.98	12.9	$	82.43	$	73.90	11.5
Sales per retail square foot	$	587.28	$	552.85	6.2	$	615.98	$	549.26	12.1

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(1)Selected Sales Data does not include results for the legacy Interline Brands business or results for HD Supply Holdings, Inc.

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in millions	October 31, 2021	November 1, 2020	January 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	5,067	$	14,652	$	7,895
Receivables, net	3,533	2,666	2,992
Merchandise inventories	20,582	16,155	16,627
Other current assets	1,284	1,032	963
Total current assets	30,466	34,505	28,477
Net property and equipment	24,935	23,848	24,705
Operating lease right-of-use assets	5,903	5,433	5,962
Goodwill	7,445	2,236	7,126
Other assets	4,282	897	4,311
Total assets	$	73,031	$	66,919	$	70,581
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	13,375	$	12,899	$	11,606
Accrued salaries and related expenses	2,028	2,176	2,463
Current installments of long-term debt	2,436	2,491	1,416
Current operating lease liabilities	827	842	828
Other current liabilities	8,237	6,987	6,853
Total current liabilities	26,903	25,395	23,166
Long-term debt, excluding current installments	36,712	32,831	35,822
Long-term operating lease liabilities	5,290	4,880	5,356
Other long-term liabilities	3,091	2,278	2,938
Total liabilities	71,996	65,384	67,282
Total stockholders' equity	1,035	1,535	3,299
Total liabilities and stockholders' equity	$	73,031	$	66,919	$	70,581

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
in millions	October 31, 2021	November 1, 2020
Cash Flows from Operating Activities:
Net earnings	$	13,081	$	10,009
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization	2,128	1,853
Stock-based compensation expense	312	234
Changes in working capital	(2,199)	5,348
Changes in deferred income taxes	(73)	(86)
Other operating activities	137	57
Net cash provided by operating activities	13,386	17,415
Cash Flows from Investing Activities:
Capital expenditures	(1,737)	(1,503)
Payments for businesses acquired, net	(416)	-
Other investing activities	21	52
Net cash used in investing activities	(2,132)	(1,451)
Cash Flows from Financing Activities:
Repayments of short-term debt, net	-	(974)
Proceeds from long-term debt, net of discounts and premiums	2,979	4,960
Repayments of long-term debt	(1,480)	(1,836)
Repurchases of common stock	(10,374)	(791)
Proceeds from sales of common stock	190	185
Cash dividends	(5,264)	(4,837)
Other financing activities	(160)	(132)
Net cash used in financing activities	(14,109)	(3,425)
Change in cash and cash equivalents	(2,855)	12,539
Effect of exchange rate changes on cash and cash equivalents	27	(20)
Cash and cash equivalents at beginning of period	7,895	2,133
Cash and cash equivalents at end of period	$	5,067	$	14,652