The Home Depot Announces Third Quarter Fiscal 2023 Results; Narrows Fiscal 2023 Guidance

ATLANTA, Nov. 14, 2023 /CNW/ — The Home Depot®, the world’s largest home improvement retailer, today reported sales of $37.7 billion for the third quarter of fiscal 2023, a decrease of 3.0% from the third quarter of fiscal 2022. Comparable sales for the third quarter of fiscal 2023 decreased 3.1%, and comparable sales in the U.S. decreased 3.5%. 

Net earnings for the third quarter of fiscal 2023 were $3.8 billion, or $3.81 per diluted share, compared with net earnings of $4.3 billion, or $4.24 per diluted share, in the same period of fiscal 2022. 

“Our quarterly performance was in line with our expectations,” said Ted Decker, chair, president and CEO. “Similar to the second quarter, we saw continued customer engagement with smaller projects, and experienced pressure in certain big-ticket, discretionary categories. We remain very excited about our strategic initiatives and are committed to investing in the business to deliver the best interconnected shopping experience, capture wallet share with the Pro, and grow our store footprint. In addition, 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 narrowed its prior fiscal 2023 guidance range:

  • Sales and comparable sales to decline between 3% and 4% compared to fiscal 2022
  • Operating margin rate to be between 14.2% and 14.1%
  • Tax rate of approximately 24.5%
  • Interest expense of approximately $1.8 billion
  • Diluted earnings-per-share-percent-decline between 9% and 11% compared to fiscal 2022

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 2,333 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 approximately 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




Nine Months Ended



in millions, except per share data

October 29,
2023


October 30,
2022


% Change


October 29,
2023


October 30,
2022


% Change

Net sales

$   37,710


$   38,872


(3.0) %


$ 117,883


$ 121,572


(3.0) %

Cost of sales

24,972


25,648


(2.6)


78,431


80,720


(2.8)

Gross profit

12,738


13,224


(3.7)


39,452


40,852


(3.4)

Operating expenses:












Selling, general and administrative

6,649


6,468


2.8


19,919


19,735


0.9

Depreciation and amortization

683


608


12.3


1,987


1,830


8.6

  Total operating expenses

7,332


7,076


3.6


21,906


21,565


1.6

Operating income

5,406


6,148


(12.1)


17,546


19,287


(9.0)

Interest and other (income) expense:












Interest income and other, net

(49)


(7)


N/M


(123)


(12)


N/M

Interest expense

487


413


17.9


1,430


1,166


22.6

  Interest and other, net

438


406


7.9


1,307


1,154


13.3

Earnings before provision for income taxes

4,968


5,742


(13.5)


16,239


18,133


(10.4)

Provision for income taxes

1,158


1,403


(17.5)


3,897


4,390


(11.2)

Net earnings

$     3,810


$     4,339


(12.2) %


$   12,342


$   13,743


(10.2) %













Basic weighted average common shares

996


1,020


(2.4) %


1,002


1,024


(2.1) %

Basic earnings per share

$       3.83


$       4.25


(9.9)


$     12.32


$     13.42


(8.2)













Diluted weighted average common shares

999


1,023


(2.3) %


1,005


1,028


(2.2) %

Diluted earnings per share

$       3.81


$       4.24


(10.1)


$     12.28


$     13.37


(8.2)














Three Months Ended




Nine Months Ended



Selected Sales Data (1)

October 29,
2023


October 30,
2022


% Change


October 29,
2023


October 30,
2022


% Change

Customer transactions (in millions)

399.8


409.8


(2.4) %


1,249.8


1,287.9


(3.0) %

Average ticket

$     89.36


$     89.67


(0.3)


$     90.42


$     90.45


Sales per retail square foot

$   595.71


$   618.50


(3.7)


$   623.17


$   646.81


(3.7)









(1)

Selected Sales Data does not include results for HD Supply.

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 


in millions

October 29,
2023


October 30,
2022


January 29,
2023

Assets






Current assets:






Cash and cash equivalents

$           2,058


$           2,462


$           2,757

Receivables, net

3,932


3,732


3,317

Merchandise inventories

22,805


25,719


24,886

Other current assets

1,887


1,768


1,511

Total current assets

30,682


33,681


32,471

Net property and equipment

25,735


25,240


25,631

Operating lease right-of-use assets

7,071


6,523


6,941

Goodwill

7,937


7,434


7,444

Other assets

4,152


3,988


3,958

Total assets

$         75,577


$         76,866


$         76,445







Liabilities and Stockholders’ Equity






Current liabilities:






Accounts payable

$         11,478


$         12,402


$         11,443

Accrued salaries and related expenses

2,034


1,934


1,991

Current installments of long-term debt

1,362


1,224


1,231

Current operating lease liabilities

1,026


942


945

Other current liabilities

7,672


7,778


7,500

Total current liabilities

23,572


24,280


23,110

Long-term debt, excluding current installments

40,567


41,740


41,962

Long-term operating lease liabilities

6,300


5,807


6,226

Other long-term liabilities

3,708


3,741


3,585

Total liabilities

74,147


75,568


74,883

Total stockholders’ equity

1,430


1,298


1,562

Total liabilities and stockholders’ equity

$         75,577


$         76,866


$         76,445

THE HOME DEPOT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Nine Months Ended

in millions

October 29,
2023


October 30,
2022

Cash Flows from Operating Activities:




Net earnings

$         12,342


$         13,743

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




Depreciation and amortization

2,415


2,216

Stock-based compensation expense

300


286

Changes in working capital

1,391


(6,579)

Changes in deferred income taxes

(310)


129

Other operating activities

301


226

  Net cash provided by operating activities

16,439


10,021





Cash Flows from Investing Activities:




Capital expenditures

(2,368)


(2,216)

Payments for businesses acquired, net

(795)


Other investing activities

15


(29)

  Net cash used in investing activities

(3,148)


(2,245)





Cash Flows from Financing Activities:




Repayments of short-term debt, net


(1,035)

Proceeds from long-term debt, net of discounts


6,942

Repayments of long-term debt

(1,200)


(2,423)

Repurchases of common stock

(6,465)


(5,136)

Proceeds from sales of common stock

192


146

Cash dividends

(6,304)


(5,856)

Other financing activities

(146)


(185)

  Net cash used in financing activities

(13,923)


(7,547)

Change in cash and cash equivalents

(632)


229

Effect of exchange rate changes on cash and cash equivalents

(67)


(110)

Cash and cash equivalents at beginning of period

2,757


2,343

  Cash and cash equivalents at end of period

$           2,058


$           2,462

SOURCE The Home Depot

For further information: For more information, contact: Financial Community: Isabel Janci, Vice President of Investor Relations and Treasurer, 770-384-2666, [email protected]; News Media: Sara Gorman, Senior Director of Corporate Communications, 770-384-2852, [email protected]

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