The Home Depot Announces First Quarter Fiscal 2024 Results; Reaffirms Fiscal 2024 Guidance
The Home Depot reported its fiscal 2024 first-quarter results with sales of $36.4 billion, down 2.3% year-over-year. Comparable sales fell 2.8%, with U.S. comparable sales down 3.2%. Earnings were $3.6 billion, or $3.63 per diluted share, compared to $3.9 billion, or $3.82 per diluted share, a year prior. The company reaffirmed its fiscal 2024 guidance, projecting 1.0% sales growth and a comparable sales decline of 1.0%. It also announced a definitive agreement to acquire SRS Distribution Inc. but noted the guidance does not account for this acquisition. The 53rd week is expected to add $2.3 billion in sales and $0.30 in EPS. The Home Depot operates 2,337 retail stores globally and employs 465,000 associates.
- Reaffirmed fiscal 2024 guidance, indicating stable expectations.
- Projected total sales growth of 1.0% for fiscal 2024, including the 53rd week.
- The 53rd week projected to add approximately $2.3 billion to total sales and $0.30 to diluted EPS.
- The company plans to open approximately 12 new stores.
- Gross margin expected to be around 33.9% and operating margin at 14.1%.
- Net earnings for Q1 2024 were $3.6 billion.
- The company continues to grow market share despite challenges.
- Q1 2024 sales decreased by 2.3% compared to Q1 2023.
- Comparable sales for Q1 2024 decreased by 2.8%, with U.S. comparable sales down 3.2%.
- Net earnings declined from $3.9 billion in Q1 2023 to $3.6 billion in Q1 2024.
- EPS dropped from $3.82 in Q1 2023 to $3.63 in Q1 2024.
- The guidance does not reflect the impacts of the SRS Distribution Inc. acquisition, adding uncertainty.
Insights
Home Depot's first-quarter fiscal 2024 results show a moderate decline in key metrics. Sales dropped by
While the company attributes these declines to a delayed start to spring and softness in larger discretionary projects, reaffirming its fiscal 2024 guidance signals management's confidence in their strategy and market position.
Investors should note the
In summary, while the performance shows some short-term softness, the reaffirmation of guidance and operational metrics provide a balanced outlook, suggesting stability in the long-term.
The home improvement sector has faced challenges, reflecting in Home Depot's declining comparable sales. The
The ongoing acquisition of SRS Distribution Inc. is a strategic move to bolster their market position. This acquisition could result in increased market share and competitive advantage in the long run, although it's important to monitor how well the integration is managed and its financial impact post-acquisition.
Additionally, the projected opening of 12 new stores and maintaining a substantial tax rate of approximately
Overall, Home Depot shows resilience through strategic planning and market adaptation, although the competitive landscape and economic conditions will be important in shaping future performance.
Net earnings for the first quarter of fiscal 2024 were
"The team executed at a high level in the quarter, and we continued to grow market share," said Ted Decker, chair, president and CEO. "And while the quarter was impacted by a delayed start to spring and continued softness in certain larger discretionary projects, we feel great about our store readiness, our product assortment in stores and online, and our associate engagement. Our associates are energized and ready to serve our customers as spring breaks across the country. I would like to thank them for their continued hard work and dedication to serving our customers and communities."
Fiscal 2024 Guidance
The company reaffirms its fiscal 2024 guidance, which includes 53 weeks of operating results. In addition, in March, the Company entered into a definitive agreement to acquire SRS Distribution Inc. (SRS). Since the acquisition has not closed, the following guidance does not reflect any impacts from the SRS acquisition:
- Total sales growth of approximately
1.0% , including the 53rd week- 53rd week projected to add approximately
$2.3 billion
- 53rd week projected to add approximately
- Comparable sales to decline approximately
1.0% for the 52-week period - Approximately 12 new stores
- Gross margin of approximately
33.9% - Operating margin of approximately
14.1% - Tax rate of approximately
24.5% - Net interest expense of approximately
$1.8 billion - 53-week diluted earnings-per-share-percent growth of approximately
1.0% - 53rd week expected to contribute approximately
$0.30
- 53rd week expected to contribute approximately
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 first quarter, the company operated a total of 2,337 retail stores in all 50 states, the
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, including as a result of macroeconomic conditions; net sales growth; comparable sales; the effects of competition; our brand and reputation; implementation of interconnected retail, store, supply chain and technology initiatives; inventory and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer credit; the 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; cost and availability of labor; costs of fuel and other energy sources; events that could disrupt our business, supply chain, technology infrastructure, or demand for our products and services, such as international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, geopolitical conflicts, military conflicts, or acts of war; our ability to maintain a safe and secure store environment; our ability to address expectations regarding environmental, social and governance matters and meet related goals; continuation or suspension of share repurchases; net earnings performance; earnings per share; future dividends; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our 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 challenges of operating in international markets; the adequacy of insurance coverage; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of legal and regulatory changes, including changes to tax laws and regulations; store openings and closures; guidance for fiscal 2024 and beyond; financial outlook; the successful closing of the SRS acquisition; and the impact of acquired companies on our organization and the ability to recognize the anticipated benefits of any 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 currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A, "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended January 28, 2024 and also as may be described from time to time in future reports we file with the Securities and Exchange Commission. There also may be other factors that we cannot anticipate or 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 filings with the Securities and Exchange Commission and in our other public statements.
THE HOME DEPOT, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) | |||||
Three Months Ended | |||||
in millions, except per share data | April 28, | April 30, | % Change | ||
Net sales | $ 36,418 | $ 37,257 | (2.3) % | ||
Cost of sales | 23,985 | 24,700 | (2.9) | ||
Gross profit | 12,433 | 12,557 | (1.0) | ||
Operating expenses: | |||||
Selling, general and administrative | 6,667 | 6,355 | 4.9 | ||
Depreciation and amortization | 687 | 651 | 5.5 | ||
Total operating expenses | 7,354 | 7,006 | 5.0 | ||
Operating income | 5,079 | 5,551 | (8.5) | ||
Interest and other (income) expense: | |||||
Interest income and other, net | (57) | (33) | 72.7 | ||
Interest expense | 485 | 474 | 2.3 | ||
Interest and other, net | 428 | 441 | (2.9) | ||
Earnings before provision for income taxes | 4,651 | 5,110 | (9.0) | ||
Provision for income taxes | 1,051 | 1,237 | (15.0) | ||
Net earnings | $ 3,600 | $ 3,873 | (7.0) % | ||
Basic weighted average common shares | 989 | 1,010 | (2.1) % | ||
Basic earnings per share | $ 3.64 | $ 3.83 | (5.0) | ||
Diluted weighted average common shares | 992 | 1,013 | (2.1) % | ||
Diluted earnings per share | $ 3.63 | $ 3.82 | (5.0) | ||
Three Months Ended | |||||
Selected Sales Data (1) | April 28, | April 30, | % Change | ||
Customer transactions (in millions) | 386.8 | 390.9 | (1.0) % | ||
Average ticket | $ 90.68 | $ 91.92 | (1.3) | ||
Sales per retail square foot | $ 572.69 | $ 592.94 | (3.4) | ||
(1) Selected Sales Data does not include results for HD Supply. | |||||||
THE HOME DEPOT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
| |||||
in millions | April 28, | April 30, | January 28, | ||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ 4,264 | $ 1,260 | $ 3,760 | ||
Receivables, net | 4,105 | 4,213 | 3,328 | ||
Merchandise inventories | 22,416 | 25,371 | 20,976 | ||
Other current assets | 1,837 | 1,579 | 1,711 | ||
Total current assets | 32,622 | 32,423 | 29,775 | ||
Net property and equipment | 25,997 | 25,674 | 26,154 | ||
Operating lease right-of-use assets | 7,913 | 6,931 | 7,884 | ||
Goodwill | 8,464 | 7,447 | 8,455 | ||
Other assets | 4,234 | 3,911 | 4,262 | ||
Total assets | $ 79,230 | $ 76,386 | $ 76,530 | ||
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Short-term debt | $ 8 | $ — | $ — | ||
Accounts payable | 12,563 | 12,630 | 10,037 | ||
Accrued salaries and related expenses | 2,005 | 1,931 | 2,096 | ||
Current installments of long-term debt | 763 | 1,338 | 1,368 | ||
Current operating lease liabilities | 1,073 | 966 | 1,050 | ||
Other current liabilities | 7,947 | 8,581 | 7,464 | ||
Total current liabilities | 24,359 | 25,446 | 22,015 | ||
Long-term debt, excluding current installments | 42,060 | 40,915 | 42,743 | ||
Long-term operating lease liabilities | 7,107 | 6,209 | 7,082 | ||
Other long-term liabilities | 3,884 | 3,454 | 3,646 | ||
Total liabilities | 77,410 | 76,024 | 75,486 | ||
Total stockholders' equity | 1,820 | 362 | 1,044 | ||
Total liabilities and stockholders' equity | $ 79,230 | $ 76,386 | $ 76,530 | ||
THE HOME DEPOT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||
Three Months Ended | |||
in millions | April 28, | April 30, | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 3,600 | $ 3,873 | |
Reconciliation of net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 837 | 793 | |
Stock-based compensation expense | 124 | 124 | |
Changes in working capital | 842 | 809 | |
Changes in deferred income taxes | 83 | (59) | |
Other operating activities | 11 | 74 | |
Net cash provided by operating activities | 5,497 | 5,614 | |
Cash Flows from Investing Activities: | |||
Capital expenditures | (847) | (905) | |
Other investing activities | 17 | 2 | |
Net cash used in investing activities | (830) | (903) | |
Cash Flows from Financing Activities: | |||
Proceeds from short-term debt, net | 8 | — | |
Repayments of long-term debt | (1,172) | (1,063) | |
Repurchases of common stock | (649) | (2,887) | |
Proceeds from sales of common stock | 62 | 15 | |
Cash dividends | (2,229) | (2,118) | |
Other financing activities | (166) | (135) | |
Net cash used in financing activities | (4,146) | (6,188) | |
Change in cash and cash equivalents | 521 | (1,477) | |
Effect of exchange rate changes on cash and cash equivalents | (17) | (20) | |
Cash and cash equivalents at beginning of period | 3,760 | 2,757 | |
Cash and cash equivalents at end of period | $ 4,264 | $ 1,260 | |
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SOURCE The Home Depot
FAQ
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