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The Home Depot Inc. Reports Operating Results (10-Q)

November 21, 2012 | About:
Charles Mizrahi

10qk

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The Home Depot Inc. (HD) filed Quarterly Report for the period ended 2012-10-28.

Home Depot, Inc. has a market cap of $93.64 billion; its shares were traded at around $64.12 with a P/E ratio of 21.4 and P/S ratio of 1.3. The dividend yield of Home Depot, Inc. stocks is 1.9%. Home Depot, Inc. had an annual average earning growth of 5.3% over the past 10 years.

Highlight of Business Operations:

Net Sales increased 4.6% to $18.1 billion for the third quarter of fiscal 2012 from $17.3 billion for the third quarter of fiscal 2011. For the first nine months of fiscal 2012, Net Sales increased 3.9% to $56.5 billion from $54.4 billion for the first nine months of fiscal 2011. Our comparable store sales increased 4.2% in the third quarter of fiscal 2012, driven by a 2.9% increase in our comparable store average ticket and an increase in our comparable store customer transactions. Comparable store sales for our U.S. stores increased 4.3% in the third quarter of fiscal 2012.

Net Sales for the third quarter of fiscal 2012 increased 4.6% to $18.1 billion from $17.3 billion for the third quarter of fiscal 2011. For the first nine months of fiscal 2012, Net Sales increased 3.9% to $56.5 billion from $54.4 billion for the comparable period of fiscal 2011. The increase in Net Sales for the third quarter and first nine months of fiscal 2012 reflects the impact of positive comparable store sales. Total comparable store sales increased 4.2% for the third quarter of both fiscal 2012 and 2011. For the first nine months of fiscal 2012, total comparable store sales increased 3.9% compared to an increase of 2.7% for the same period of fiscal 2011.

Gross Profit increased 5.1% to $6.3 billion for the third quarter of fiscal 2012 from $6.0 billion for the third quarter of fiscal 2011. Gross Profit increased 4.3% to $19.5 billion for the first nine months of fiscal 2012 from $18.7 billion for the first nine months of fiscal 2011. Gross Profit for the third quarter and first nine months of fiscal 2012 included a $10 million charge related to the China store closings. Gross Profit as a percent of Net Sales was 34.6% for the third quarter of fiscal 2012 compared to 34.4% for the third quarter of fiscal 2011. Excluding the charge related to the China store closings, gross profit margin increased 22 basis points for the third quarter of fiscal 2012 driven primarily by lower shrink and our supply chain transformation in the U.S. For the first nine months of fiscal 2012, Gross Profit as a percent of Net Sales was 34.5% compared to 34.3% for the comparable period of fiscal 2011. The increase in gross profit margin for the first nine months of fiscal 2012 was driven primarily by a change in mix of products sold and our supply chain transformation in the U.S.

Selling, General and Administrative expenses (“SG&A”) increased 4.6% to $4.1 billion for the third quarter of fiscal 2012 from $4.0 billion for the third quarter of fiscal 2011, and increased 1.2% to $12.3 billion for the first nine months of fiscal 2012 from $12.2 billion for the first nine months of fiscal 2011. SG&A for the third quarter and first nine months of fiscal 2012 included a $155 million charge related to the China store closings. As a percent of Net Sales, SG&A was 22.8% for the third quarter of both fiscal 2012 and 2011. Excluding the charge related to the China store closings, SG&A as a percent of Net Sales was 22.0% for the third quarter of fiscal 2012. For the first nine months of fiscal 2012, SG&A as a percent of Net Sales was 21.8% compared to 22.3% for the same period last year. Excluding the charge related to the China store closings, SG&A as a percent of Net Sales was 21.5% for the first nine months of fiscal 2012. SG&A as a percent of Net Sales for the third quarter and first nine months of fiscal 2012 reflects expense leverage resulting from the positive comparable store sales environment and lower credit card and natural disaster expense offset by the charge related to the China store closings.

Depreciation and Amortization increased 1.3% to $395 million for the third quarter of fiscal 2012 from $390 million for the third quarter of fiscal 2011. Depreciation and Amortization was $1.2 billion for the first nine months of both fiscal 2012 and 2011. Depreciation and Amortization as a percent of Net Sales was 2.2% for the third quarter of fiscal 2012 compared to 2.3% for the third quarter of fiscal 2011, and was 2.1% for the first nine months of fiscal 2012 compared to 2.2% for the first nine months of fiscal 2011. The decrease in Depreciation and Amortization as a percent of Net Sales for the third quarter and first nine months of fiscal 2012 reflects expense leverage in the positive comparable store sales environment and an increase in fully depreciated assets that are still utilized in the business.

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