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The Home Depot Announces Second Quarter Fiscal 2023 Results; Reaffirms Fiscal 2023 Guidance; Announces $15 Billion Share Repurchase Authorization

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The Home Depot reported sales of $42.9 billion for Q2 2023, a 2.0% decrease from Q2 2022. Comparable sales also decreased by 2.0%, with a 2.0% decrease in the U.S. Net earnings for Q2 2023 were $4.7 billion, compared to $5.2 billion in Q2 2022.
Positive
  • Sales for Q2 2023 decreased by 2.0% compared to Q2 2022.
  • Comparable sales in the U.S. decreased by 2.0% in Q2 2023.
  • Net earnings for Q2 2023 were $4.7 billion, a decrease from $5.2 billion in Q2 2022.
Negative
  • None.

ATLANTA, Aug. 15, 2023 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $42.9 billion for the second quarter of fiscal 2023, a decrease of 2.0% from the second quarter of fiscal 2022. Comparable sales for the second quarter of fiscal 2023 decreased 2.0%, and comparable sales in the U.S. decreased 2.0%.

Net earnings for the second quarter of fiscal 2023 were $4.7 billion, or $4.65 per diluted share, compared with net earnings of $5.2 billion, or $5.05 per diluted share, in the same period of fiscal 2022.

"We were pleased with our performance in the second quarter," said Ted Decker, chair, president and CEO. "While there was strength in categories associated with smaller projects, we did see continued pressure in certain big-ticket, discretionary categories. We remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market. Our associates did an outstanding job delivering value and service for our customers throughout the quarter, and I would like to thank them for their dedication and hard work."

Fiscal 2023 Guidance

The company reaffirmed fiscal 2023 guidance:

  • Sales and comparable sales to decline between 2% and 5% compared to fiscal 2022
  • Operating margin rate to be between 14.3% and 14.0%
  • Tax rate of approximately 24.5%
  • Interest expense of approximately $1.8 billion
  • Diluted earnings-per-share-percent-decline between 7% and 13% compared to fiscal 2022

Share Repurchase Authorization

The board of directors also authorized a new $15 billion share repurchase program effective August 15, 2023, replacing its previous authorization.

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 second quarter, the company operated a total of 2,326 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs over 470,000 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 sales; the effects of competition; our brand and reputation; implementation of store, interconnected retail, 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; international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, military conflicts or acts of war, supply chain disruptions, and other business interruptions that could compromise data privacy or disrupt operation of our stores, distribution centers and other facilities, our ability to operate or access communications, financial or banking systems, or supply or delivery of, or demand for, our products or services; 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 international operations; 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 2023 and beyond; financial outlook; 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 29, 2023 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




Six Months Ended



in millions, except per share data

July 30,
2023


July 31,
2022


% Change


July 30,
2023


July 31,
2022


% Change

Net sales

$   42,916


$   43,792


(2.0) %


$   80,173


$   82,700


(3.1) %

Cost of sales

28,759


29,309


(1.9)


53,459


55,072


(2.9)

Gross profit

14,157


14,483


(2.3)


26,714


27,628


(3.3)

Operating expenses:












Selling, general and administrative

6,915


6,657


3.9


13,270


13,267


Depreciation and amortization

653


616


6.0


1,304


1,222


6.7

  Total operating expenses

7,568


7,273


4.1


14,574


14,489


0.6

Operating income

6,589


7,210


(8.6)


12,140


13,139


(7.6)

Interest and other (income) expense:












Interest income and other, net

(41)


(2)


N/M


(74)


(5)


N/M

Interest expense

469


381


23.1


943


753


25.2

  Interest and other, net

428


379


12.9


869


748


16.2

Earnings before provision for income taxes

6,161


6,831


(9.8)


11,271


12,391


(9.0)

Provision for income taxes

1,502


1,658


(9.4)


2,739


2,987


(8.3)

Net earnings

$     4,659


$     5,173


(9.9) %


$     8,532


$     9,404


(9.3) %













Basic weighted average common shares

1,000


1,023


(2.2) %


1,005


1,026


(2.0) %

Basic earnings per share

$       4.66


$       5.06


(7.9)


$       8.49


$       9.17


(7.4)













Diluted weighted average common shares

1,003


1,025


(2.1) %


1,008


1,030


(2.1) %

Diluted earnings per share

$       4.65


$       5.05


(7.9)


$       8.46


$       9.13


(7.3)














Three Months Ended




Six Months Ended



Selected Sales Data (1)

July 30,
2023


July 31,
2022


% Change


July 30,
2023


July 31,
2022


% Change

Customer transactions (in millions)

459.1


467.4


(1.8) %


850.1


878.1


(3.2) %

Average ticket

$     90.07


$     90.02


0.1


$     90.92


$     90.82


0.1

Sales per retail square foot

$   684.65


$   700.62


(2.3)


$   638.50


$   661.27


(3.4)













—————


(1)     Selected Sales Data does not include results for HD Supply.

 

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)







in millions

July 30,
2023


July 31,
2022


January 29,
2023

Assets






Current assets:






Cash and cash equivalents

$           2,814


$           1,259


$           2,757

Receivables, net

3,836


3,725


3,317

Merchandise inventories

23,265


26,088


24,886

Other current assets

1,915


1,869


1,511

Total current assets

31,830


32,941


32,471

Net property and equipment

25,879


25,247


25,631

Operating lease right-of-use assets

7,139


6,132


6,941

Goodwill

7,664


7,451


7,444

Other assets

3,875


4,054


3,958

Total assets

$         76,387


$         75,825


$         76,445







Liabilities and Stockholders' Equity






Current liabilities:






Short-term debt

$                —


$              539


$                —

Accounts payable

12,104


14,348


11,443

Accrued salaries and related expenses

2,022


2,204


1,991

Current installments of long-term debt

1,352


1,218


1,231

Current operating lease liabilities

1,011


919


945

Other current liabilities

7,738


8,606


7,500

Total current liabilities

24,227


27,834


23,110

Long-term debt, excluding current installments

40,754


39,271


41,962

Long-term operating lease liabilities

6,376


5,431


6,226

Other long-term liabilities

3,695


3,052


3,585

Total liabilities

75,052


75,588


74,883

Total stockholders' equity

1,335


237


1,562

Total liabilities and stockholders' equity

$         76,387


$         75,825


$         76,445

 

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Six Months Ended

in millions

July 30,
2023


July 31,
2022

Cash Flows from Operating Activities:




Net earnings

$           8,532


$           9,404

Reconciliation of net earnings to net cash provided by operating activities:




Depreciation and amortization

1,588


1,473

Stock-based compensation expense

215


196

Changes in working capital

1,774


(3,889)

Changes in deferred income taxes

(48)


(95)

Other operating activities

144


93

  Net cash provided by operating activities

12,205


7,182





Cash Flows from Investing Activities:




Capital expenditures

(1,697)


(1,447)

Payments for businesses acquired, net

(215)


Other investing activities

10


(14)

Net cash used in investing activities

(1,902)


(1,461)





Cash Flows from Financing Activities:




Repayments of short-term debt, net


(496)

Proceeds from long-term debt, net of discounts


3,957

Repayments of long-term debt

(1,130)


(2,366)

Repurchases of common stock

(4,954)


(3,962)

Proceeds from sales of common stock

175


142

Cash dividends

(4,215)


(3,910)

Other financing activities

(142)


(163)

Net cash used in financing activities

(10,266)


(6,798)

Change in cash and cash equivalents

37


(1,077)

Effect of exchange rate changes on cash and cash equivalents

20


(7)

Cash and cash equivalents at beginning of year

2,757


2,343

Cash and cash equivalents at end of year

$           2,814


$           1,259

 

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SOURCE The Home Depot

FAQ

What were the sales for Q2 2023?

The sales for Q2 2023 were $42.9 billion.

What was the decrease in sales compared to Q2 2022?

The sales decreased by 2.0% compared to Q2 2022.

How did the comparable sales perform in Q2 2023?

The comparable sales in Q2 2023 decreased by 2.0%, with a 2.0% decrease in the U.S.

What were the net earnings for Q2 2023?

The net earnings for Q2 2023 were $4.7 billion.

How did the net earnings compare to Q2 2022?

The net earnings decreased from $5.2 billion in Q2 2022.

Home Depot, Inc.

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