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The Home Depot Announces Second Quarter Results; Declares Quarterly Dividend of $1.50 Per Share

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ATLANTA, Aug. 18, 2020 (Canada NewsWire via COMTEX) —
The Home Depot(®), the world’s largest home improvement retailer, today reported sales of $38.1 billion for the second quarter of fiscal 2020, a 23.4 percent increase from the second quarter of fiscal 2019. Comparable sales for the second quarter of fiscal 2020 were positive 23.4 percent, and comparable sales in the U.S. were positive 25.0 percent.

Net earnings for the second quarter of fiscal 2020 were $4.3 billion, or $4.02 per diluted share, compared with net earnings of $3.5 billion, or $3.17 per diluted share, in the same period of fiscal 2019. For the second quarter of fiscal 2020, diluted earnings per share increased 26.8 percent from the same period in the prior year.

“The investments we have made across the business have significantly increased our agility, allowing us to respond quickly to changes while continuing to promote a safe operating environment. This enhanced our team’s ability to work cross-functionally to better serve our customers and deliver record-breaking sales in the quarter,” said Craig Menear, chairman, CEO and president. “We remain focused on continuing the momentum of our One Home Depot investment strategy that we believe will position us for continued growth over the long-term, while at the same time maintaining flexibility to navigate the demands of the current environment. Through it all, we will continue to lead with our values by doing the right thing and taking care of our people.”

In the second quarter, the Company invested approximately $480 million in additional benefits for associates, including weekly bonuses for hourly associates in stores and distribution centers. Year-to-date, the Company has spent approximately $1.3 billion on enhanced pay and benefits in response to COVID-19. Additionally, the Company’s first half performance resulted in a record payout for Success Sharing, the Company’s profit-sharing program for hourly associates.

“I want to thank our associates for their continued focus on serving our customers and communities as we navigate these extraordinary circumstances together,” said Menear.

Dividend Declaration

The Company today announced that its board of directors declared a second quarter cash dividend of $1.50 per share. The dividend is payable on September 17, 2020, to shareholders of record on the close of business on September 3, 2020. This is the 134(th) consecutive quarter the Company has paid a cash dividend.

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 2,293 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 more than 400,000 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 impact on our business, operations and financial results of the COVID-19 pandemic (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; 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, suppliers and vendors; international trade disputes, natural disasters, public health issues (including pandemics and related quarantines, shelter-in-place and other governmental orders, and similar restrictions), and other business interruptions that could disrupt supply or delivery of, or demand for, the Company’s products or services; 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 impact and expected outcome of investigations, inquiries, claims and litigation; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes; store openings and closures; guidance for fiscal 2020 and beyond; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and 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 February 2, 2020 and our Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2020.

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.



              THE HOME DEPOT, INC.

             CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

              (Unaudited)




                                                                                                        Three Months Ended

        Six Months Ended


                                in millions, except per share
                                 data                                                August 2,                                          August 4,                           % Change                                          August 2,                      August 4,             % Change
                                                                                          2020                                                2019                                                                                   2020                            2019



       Net sales                                                                                $
            38,053                                                                       $
            30,839                                                            23.4                    $
        66,313              $
       57,220   15.9
                                                                                                                                                                                                                                                                     %                                                            %



       Cost of sales                                                                   25,112                                                          20,407                                                                       23.1                                  43,747                  37,771        15.8



       Gross profit                                                                    12,941                                                          10,432                                                                       24.1                                  22,566                  19,449        16.0



       Operating expenses:


        Selling, general and
         administrative                                                                  6,355                                                           5,044                                                                       26.0                                  12,184                   9,984        22.0


        Depreciation and amortization                                                      519                                                             492                                                                        5.5                                   1,039                     972         6.9


        Total operating expenses                                                         6,874                                                           5,536                                                                       24.2                                  13,223                  10,956        20.7



       Operating income                                                                 6,067                                                           4,896                                                                       23.9                                   9,343                   8,493        10.0


        Interest and other (income)
         expense:


        Interest and investment income                                                     (9)                                                           (19)                                                                    (52.6)                                   (26)                   (34)     (23.5)



       Interest expense                                                                   346                                                             302                                                                       14.6                                     670                     590        13.6



       Interest and other, net                                                            337                                                             283                                                                       19.1                                     644                     556        15.8


        Earnings before provision for
         income taxes                                                                    5,730                                                           4,613                                                                       24.2                                   8,699                   7,937         9.6


        Provision for income taxes                                                       1,398                                                           1,134                                                                       23.3                                   2,122                   1,945         9.1



       Net earnings                                                                              $
            4,332                                                                        $
            3,479                                                            24.5                     $
        6,577               $
       5,992    9.8
                                                                                                                                                                                                                                                                     %                                                            %




        Basic weighted average common                                                    1,073                                                           1,095                                                                      (2.0)                                  1,073                   1,098       (2.3)
         shares                                                                                                                                                                                                                       %                                                                        %


        Basic earnings per share                                                                   $
            4.04                                                                         $
            3.18                                                            27.0                      $
        6.13                $
       5.46   12.3




        Diluted weighted average common                                                  1,077                                                           1,099                                                                      (2.0)                                  1,077                   1,103       (2.4)
         shares                                                                                                                                                                                                                       %                                                                        %


        Diluted earnings per share                                                                 $
            4.02                                                                         $
            3.17                                                            26.8                      $
        6.11                $
       5.43   12.5




                                                                                                        Three Months Ended

        Six Months Ended


                                Selected Sales Data
                                          (1)                                       August 2,                                          August 4,                           % Change                                          August 2,                      August 4,             % Change
                                                                                          2020                                                2019                                                                                   2020                            2019

    ---

        Customer transactions (in                                                        511.5                                                           455.5                                                                       12.3                                   886.3                   845.5         4.8
         millions)                                                                                                                                                                                                                    %                                                                        %



       Average ticket                                                                            $
            74.12                                                                        $
            67.31                                                            10.1                     $
        74.37               $
       67.31   10.5


        Sales per retail square foot                                                             $
            629.38                                                                       $
            509.55                                                            23.5                    $
        547.94              $
       472.22   16.0







              (1)
              Selected Sales Data does not include results for the legacy Interline Brands business, now operating as a part of The Home Depot Pro.




                THE HOME DEPOT, INC.

          CONDENSED CONSOLIDATED BALANCE SHEETS

                (Unaudited)




                                  in millions             August 2,                               August 4,               February 2,
                                                               2020                                     2019                       2020




                Assets



     Current assets:


      Cash and cash equivalents                                     $
     14,139                                                            $
      2,547            $
      2,133



     Receivables, net                                        2,562                                                2,274                               2,106



     Merchandise inventories                                13,498                                               14,741                              14,531



     Other current assets                                    1,162                                                1,137                               1,040



     Total current assets                                   31,361                                               20,699                              19,810


      Net property and equipment                             23,387                                               22,387                              22,770


      Operating lease right-of-use
       assets                                                 5,436                                                5,789                               5,595



     Goodwill                                                2,233                                                2,254                               2,254



     Other assets                                              932                                                  881                                 807



     Total assets                                                  $
     63,349                                                           $
      52,010           $
      51,236




                   Liabilities and Stockholders' Equity



     Current liabilities:



     Short-term debt
             $
              $                         $
      974



     Accounts payable                                       11,691                                                9,494                               7,787


      Accrued salaries and related
       expenses                                               2,402                                                1,478                               1,494


      Current installments of long-term
       debt                                                   2,476                                                1,315                               1,839


      Current operating lease
       liabilities                                              831                                                  831                                 828


      Other current liabilities                               6,799                                                5,680                               5,453


      Total current liabilities                              24,199                                               18,798                              18,375


      Long-term debt, excluding current
       installments                                          32,370                                               27,064                              28,670


      Long-term operating lease
       liabilities                                            4,895                                                5,263                               5,066



     Other liabilities                                       2,299                                                2,045                               2,241



     Total liabilities                                      63,763                                               53,170                              54,352


      Total stockholders' (deficit)
       equity                                                 (414)                                             (1,160)                            (3,116)


      Total liabilities and
       stockholders' equity                                         $
     63,349                                                           $
      52,010           $
      51,236





                THE HOME DEPOT, INC.

        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                (Unaudited)




                                                                                        Six Months Ended


                                  in millions                    August 2,                                 August 4,
                                                                      2020                                       2019


                   Cash Flows from Operating Activities:



     Net earnings                                                            $
              6,577                                $
     5,992


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


      Depreciation and
       amortization                                                  1,222                                               1,107


      Stock-based
       compensation expense                                            155                                                 139


      Changes in working
       capital                                                       6,834                                               1,168


      Changes in deferred
       income taxes                                                     13                                                  58


      Other operating
       activities                                                       28                                                  79


      Net cash provided by
       operating activities                                         14,829                                               8,543




                   Cash Flows from Investing Activities:


      Capital expenditures                                         (1,032)                                            (1,246)


      Proceeds from sales of
       property and equipment                                           12                                                  11


      Other investing
       activities                                                        -                                               (14)


      Net cash used in
       investing activities                                        (1,020)                                            (1,249)




                   Cash Flows from Financing Activities:


      Repayments of short-
       term debt, net                                                (974)                                            (1,339)


      Proceeds from long-
       term debt, net of
       discounts and premiums                                        4,960                                               1,404


      Repayments of long-
       term debt                                                   (1,806)                                            (1,030)


      Repurchases of common
       stock                                                         (791)                                            (2,619)


      Proceeds from sales of
       common stock                                                    164                                                 157


      Cash dividends                                               (3,223)                                            (2,991)


      Other financing
       activities                                                    (127)                                              (116)


      Net cash used in
       financing activities                                        (1,797)                                            (6,534)


      Change in cash and cash
       equivalents                                                  12,012                                                 760


      Effect of exchange rate
       changes on cash and
       cash equivalents                                                (6)                                                  9


      Cash and cash
       equivalents at
       beginning of period                                           2,133                                               1,778


      Cash and cash
       equivalents at end of
       period                                                                $
              14,139                                $
     2,547




              _________


                            Note: Effective February 3, 2020, we
                             reclassified cash flows relating to
                             book overdrafts from financing to
                             operating activities for all periods
                             presented on the Condensed Consolidated
                             Statement of Cash Flows. The amounts of
                             these reclassifications were not
                             material.


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SOURCE The Home Depot

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2020/18/c1669.html

SOURCE: The Home Depot

Financial Community: Isabel Janci, Vice President of Investor Relations and
Treasurer, 770-384-2666, isabel_janci@homedepot.com; News Media: Sara Gorman, Sr.
Director of Corporate Communications, 770-384-2852, sara_gorman@homedepot.com,
http://www.homedepot.com

COMTEX_369608019/2197/2020-08-18T06:00:00

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