UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May ~~2, 2021~~1, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-8207

THE HOME DEPOT, INC.

(Exact name of registrant as specified in its charter)

Delaware

95-3261426

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2455 Paces Ferry Road

Atlanta,

Georgia

30339

(Address of principal executive offices)

(Zip Code)

(770) 433-8211

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.05 Par Value Per Share

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~"large~~“large accelerated filer,~~" "accelerated~~” “accelerated filer,~~" "smaller~~” “smaller reporting company,"” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

~~1,063,258,434~~1,027,754,946 shares of common stock, $0.05 par value, outstanding as of May ~~18, 2021~~17, 2022

TABLE OF CONTENTS


Commonly Used or Defined Terms		ii
Forward-Looking Statements		iii

PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements.	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Earnings	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Stockholders' Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
	Note 1. Summary of Significant Accounting Policies	6
	Note 2. Net Sales	6
	Note 3. Property and Leases	7
	~~Note~~ N 4ote 4. Debt ~~. Stockholders' Equity~~ and Derivative Instruments	8
	Note 5 ~~. Fair Value Measurements~~5. Stockholders' Equity	9
	Note 6 ~~. Weighted Average Common Shares~~6. Fair Value Measurements	10
	Note 7 ~~. Commitments and Contingencies~~7. Weighted Average Common Shares	1011
	Note 8.8 . ~~HD Supp~~l ~~y Acquisition~~Contingencies	1011

	Report of Independent Registered Public Accounting Firm	1112
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	1213
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	1718
Item 4.	Controls and Procedures.	1718

PART II – OTHER INFORMATION		1718

Item 1A.	Risk Factors.	1718
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	1718
Item 6.	Exhibits.	1819

SIGNATURES		1920

Table of Contents

COMMONLY USED OR DEFINED TERMS


Term						Definition

~~ASU~~						~~Accounting Standards Update~~
Comparable sales						As defined in the Results of Operations ~~and Non-GAAP Financial Measures~~ section of MD&A
Exchange Act						Securities Exchange Act of 1934, as amended
~~FASB~~						~~Financial Accounting Standards Board~~
fiscal ~~2020~~2021						Fiscal year ended January ~~31, 2021~~30, 2022
fiscal ~~2021~~2022						Fiscal year ending January ~~30, 2022~~29, 2023
GAAP						U.S. generally accepted accounting principles
~~HD Supply~~						~~HD Supply Holdings, Inc.~~
MD&A						Management's Discussion and Analysis of Financial Condition and Results of Operations
~~MRO~~						~~Maintenance, repair and operations~~
NOPAT						Net operating profit after tax
Restoration Plan						Home Depot FutureBuilder Restoration Plan
ROIC						Return on invested capital
SEC						Securities and Exchange Commission
Securities Act						Securities Act of 1933, as amended
SG&A						Selling, general and administrative
~~2020~~2021 Form 10-K						Annual Report on Form 10-K for fiscal ~~2020~~2021 as filed with the SEC on March ~~24, 2021~~23, 2022

Table of Contents

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, as well as in other filings we make with the SEC and other written and oral information we release, regarding our performance or other events or developments in the future ~~performance~~ constitute ~~"forward-looking statements"~~“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 of the COVID-19 pandemic and the related recovery on our business, results of operations, cash flows and financial condition (which, among other things, may affect many of the items listed below); 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; 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 (including pandemics and quarantines, related shut-downs and other governmental orders, and similar restrictions, as well as subsequent re-openings), cybersecurity events, military conflicts or acts of war, and other business interruptions that could 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, the Company’s products or services; our ability to meet environmental, social and governance (ESG) goals; continuation or suspension of share repurchases; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity or other price inflation and deflation; ~~the~~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 effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes, including changes to tax laws and regulations; store openings and closures; financial outlook; and the impact of acquired companies ~~including HD Supply,~~ on our organization and the ability to recognize the anticipated 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 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 II, Item 1A, ~~"Risk Factors"~~“Risk Factors” and elsewhere in this report and also as ~~also~~ may be described from time to time in future reports we file with the SEC. You should read such information in conjunction with our consolidated financial statements and related notes and ~~"Management's~~“Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations"~~Operations” in this report. There also may be other factors that we cannot anticipate or that are not described ~~in this report,~~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 ~~periodic~~ filings with the SEC and in our other public statements.

iii

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

THE HOME DEPOT, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


in millions, except per share data	in millions, except per share data	May 2, 2021		January 31, 2021		in millions, except per share data	May 1, 2022		January 30, 2022
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	6,648	$	7,895	Cash and cash equivalents	$	2,844	$	2,343
Receivables, net	Receivables, net	3,624		2,992		Receivables, net	3,936		3,426
Merchandise inventories	Merchandise inventories	19,178		16,627		Merchandise inventories	25,297		22,068
Other current assets	Other current assets	1,222		963		Other current assets	1,790		1,218
Total current assets	Total current assets	30,672		28,477		Total current assets	33,867		29,055
Net property and equipment	Net property and equipment	24,673		24,705		Net property and equipment	25,166		25,199
Operating lease right-of-use assets	Operating lease right-of-use assets	5,864		5,962		Operating lease right-of-use assets	5,980		5,968
Goodwill	Goodwill	7,137		7,126		Goodwill	7,450		7,449
Other assets	Other assets	4,221		4,311		Other assets	4,104		4,205
Total assets	Total assets	$	72,567	$	70,581	Total assets	$	76,567	$	71,876

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Current liabilities:	Current liabilities:					Current liabilities:

Short-term debt						Short-term debt	$	—	$	1,035
Accounts payable	Accounts payable	$	14,494	$	11,606	Accounts payable	15,367		13,462
Accrued salaries and related expenses	Accrued salaries and related expenses	2,167		2,463		Accrued salaries and related expenses	2,008		2,426
Sales taxes payable	Sales taxes payable	1,149		774		Sales taxes payable	1,139		848
Deferred revenue	Deferred revenue	3,415		2,823		Deferred revenue	3,675		3,596
Current installments of long-term debt	Current installments of long-term debt	1,164		1,416		Current installments of long-term debt	2,463		2,447
Current operating lease liabilities	Current operating lease liabilities	803		828		Current operating lease liabilities	859		830
Other accrued expenses	Other accrued expenses	4,566		3,256		Other accrued expenses	4,876		4,049
Total current liabilities	Total current liabilities	27,758		23,166		Total current liabilities	30,387		28,693
Long-term debt, excluding current installments	Long-term debt, excluding current installments	34,697		35,822		Long-term debt, excluding current installments	39,158		36,604
Long-term operating lease liabilities	Long-term operating lease liabilities	5,279		5,356		Long-term operating lease liabilities	5,335		5,353
Other long-term liabilities	Other long-term liabilities	3,085		2,938		Other long-term liabilities	3,396		2,922
Total liabilities	Total liabilities	70,819		67,282		Total liabilities	78,276		73,572

Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,790 shares at May 2, 2021 and 1,789 shares at January 31, 2021; outstanding: 1,065 shares at May 2, 2021 and 1,077 shares at January 31, 2021		90		89
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,793 shares at May 1, 2022 and 1,792 shares at January 30, 2022; outstanding: 1,029 shares at May 1, 2022 and 1,035 shares at January 30, 2022						Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,793 shares at May 1, 2022 and 1,792 shares at January 30, 2022; outstanding: 1,029 shares at May 1, 2022 and 1,035 shares at January 30, 2022	90		90
Paid-in capital	Paid-in capital	11,555		11,540		Paid-in capital	12,079		12,132
Retained earnings	Retained earnings	60,504		58,134		Retained earnings	69,849		67,580
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(608)		(671)		Accumulated other comprehensive loss	(683)		(704)
Treasury stock, at cost, 725 shares at May 2, 2021 and 712 shares at January 31, 2021		(69,793)		(65,793)
Total stockholders’ equity		1,748		3,299
Treasury stock, at cost, 764 shares at May 1, 2022 and 757 shares at January 30, 2022						Treasury stock, at cost, 764 shares at May 1, 2022 and 757 shares at January 30, 2022	(83,044)		(80,794)
Total stockholders’ (deficit) equity						Total stockholders’ (deficit) equity	(1,709)		(1,696)
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	72,567	$	70,581	Total liabilities and stockholders’ equity	$	76,567	$	71,876

See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)


		Three Months Ended					Three Months Ended
in millions, except per share data	in millions, except per share data	May 2, 2021		May 3, 2020		in millions, except per share data		May 1, 2022		May 2, 2021
Net sales	Net sales	$	37,500	$	28,260	Net sales		$	38,908	$	37,500
Cost of sales	Cost of sales	24,758		18,635		Cost of sales		25,763		24,758
Gross profit	Gross profit	12,742		9,625		Gross profit		13,145		12,742
Operating expenses:	Operating expenses:					Operating expenses:
Selling, general and administrative	Selling, general and administrative	6,374		5,829		Selling, general and administrative		6,610		6,374
Depreciation and amortization	Depreciation and amortization	587		520		Depreciation and amortization		606		587
Total operating expenses	Total operating expenses	6,961		6,349		Total operating expenses		7,216		6,961
Operating income	Operating income	5,781		3,276		Operating income		5,929		5,781
Interest and other (income) expense:	Interest and other (income) expense:					Interest and other (income) expense:
Interest and investment income		(6)		(17)
Interest income and other, net						Interest income and other, net		(3)		(6)
Interest expense	Interest expense	339		324		Interest expense		372		339

Interest and other, net	Interest and other, net	333		307		Interest and other, net		369		333
Earnings before provision for income taxes	Earnings before provision for income taxes	5,448		2,969		Earnings before provision for income taxes		5,560		5,448
Provision for income taxes	Provision for income taxes	1,303		724		Provision for income taxes		1,329		1,303
Net earnings	Net earnings	$	4,145	$	2,245	Net earnings		$	4,231	$	4,145

Basic weighted average common shares	Basic weighted average common shares	1,071		1,073		Basic weighted average common shares		1,030		1,071
Basic earnings per share	Basic earnings per share	$	3.87	$	2.09	Basic earnings per share		$	4.11	$	3.87

Diluted weighted average common shares	Diluted weighted average common shares	1,075		1,077		Diluted weighted average common shares		1,034		1,075
Diluted earnings per share	Diluted earnings per share	$	3.86	$	2.08	Diluted earnings per share		$	4.09	$	3.86

See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		Three Months Ended						Three Months Ended
in millions	in millions		May 2, 2021		May 3, 2020		in millions		May 1, 2022		May 2, 2021
Net earnings	Net earnings		$	4,145	$	2,245	Net earnings		$	4,231	$	4,145
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:						Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	Foreign currency translation adjustments		34		(419)		Foreign currency translation adjustments		20		34
Cash flow hedges	Cash flow hedges		2		0		Cash flow hedges		1		2
Other	Other		27		10		Other		—		27
Total other comprehensive income (loss)			63		(409)
Total other comprehensive income (loss), net of tax							Total other comprehensive income (loss), net of tax		21		63
Comprehensive income	Comprehensive income		$	4,208	$	1,836	Comprehensive income		$	4,252	$	4,208

See accompanying notes to consolidated financial statements.

Table of Contents

THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)


		Three Months Ended						Three Months Ended
in millions	in millions		May 2, 2021		May 3, 2020		in millions		May 1, 2022		May 2, 2021
Common Stock:	Common Stock:						Common Stock:
Balance at beginning of period	Balance at beginning of period		$	89	$	89	Balance at beginning of period		$	90	$	89
Shares issued under employee stock plans	Shares issued under employee stock plans		1		—		Shares issued under employee stock plans		—		1
Balance at end of period	Balance at end of period		90		89		Balance at end of period		90		90

Paid-in Capital:	Paid-in Capital:						Paid-in Capital:
Balance at beginning of period	Balance at beginning of period		11,540		11,001		Balance at beginning of period		12,132		11,540
Shares issued under employee stock plans	Shares issued under employee stock plans		(117)		(71)		Shares issued under employee stock plans		(154)		(117)

Stock-based compensation expense	Stock-based compensation expense		132		78		Stock-based compensation expense		101		132

Balance at end of period	Balance at end of period		11,555		11,008		Balance at end of period		12,079		11,555

Retained Earnings:	Retained Earnings:						Retained Earnings:
Balance at beginning of period	Balance at beginning of period		58,134		51,729		Balance at beginning of period		67,580		58,134

Net earnings	Net earnings		4,145		2,245		Net earnings		4,231		4,145
Cash dividends	Cash dividends		(1,775)		(1,611)		Cash dividends		(1,962)		(1,775)
Other			—		(9)

Balance at end of period	Balance at end of period		60,504		52,354		Balance at end of period		69,849		60,504

Accumulated Other Comprehensive Income (Loss):	Accumulated Other Comprehensive Income (Loss):						Accumulated Other Comprehensive Income (Loss):
Balance at beginning of period	Balance at beginning of period		(671)		(739)		Balance at beginning of period		(704)		(671)

Foreign currency translation adjustments, net of tax	Foreign currency translation adjustments, net of tax		34		(419)		Foreign currency translation adjustments, net of tax		20		34
Cash flow hedges, net of tax	Cash flow hedges, net of tax		2		—		Cash flow hedges, net of tax		1		2
Other, net of tax	Other, net of tax		27		10		Other, net of tax		—		27
Balance at end of period	Balance at end of period		(608)		(1,148)		Balance at end of period		(683)		(608)

Treasury Stock:	Treasury Stock:						Treasury Stock:
Balance at beginning of period	Balance at beginning of period		(65,793)		(65,196)		Balance at beginning of period		(80,794)		(65,793)
Repurchases of common stock	Repurchases of common stock		(4,000)		(597)		Repurchases of common stock		(2,250)		(4,000)
Balance at end of period	Balance at end of period		(69,793)		(65,793)		Balance at end of period		(83,044)		(69,793)
Total stockholders' equity (deficit)			$	1,748	$	(3,490)
Total stockholders' (deficit) equity							Total stockholders' (deficit) equity		$	(1,709)	$	1,748

See accompanying notes to consolidated financial statements.

Table of Contents

THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Three Months Ended					Three Months Ended
in millions	in millions	May 2, 2021		May 3, 2020		in millions	May 1, 2022		May 2, 2021
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:					Cash Flows from Operating Activities:
Net earnings	Net earnings	$	4,145	$	2,245	Net earnings	$	4,231	$	4,145
Reconciliation of net earnings to net cash provided by operating activities:	Reconciliation of net earnings to net cash provided by operating activities:					Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	703		607		Depreciation and amortization	727		703
Stock-based compensation expense	Stock-based compensation expense	146		88		Stock-based compensation expense	115		146
Changes in receivables, net	Changes in receivables, net	(640)		(534)		Changes in receivables, net	(489)		(640)
Changes in merchandise inventories	Changes in merchandise inventories	(2,519)		(633)		Changes in merchandise inventories	(3,226)		(2,519)
Changes in other current assets	Changes in other current assets	(277)		62		Changes in other current assets	(589)		(277)
Changes in accounts payable and accrued expenses	Changes in accounts payable and accrued expenses	3,013		3,274		Changes in accounts payable and accrued expenses	1,744		3,013
Changes in deferred revenue	Changes in deferred revenue	586		71		Changes in deferred revenue	79		586
Changes in income taxes payable	Changes in income taxes payable	1,138		594		Changes in income taxes payable	1,121		1,138
Changes in deferred income taxes	Changes in deferred income taxes	(87)		(68)		Changes in deferred income taxes	(44)		(87)
Other operating activities	Other operating activities	102		31		Other operating activities	120		102
Net cash provided by operating activities	Net cash provided by operating activities	6,310		5,737		Net cash provided by operating activities	3,789		6,310

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Capital expenditures	Capital expenditures	(524)		(586)		Capital expenditures	(704)		(524)

Other investing activities	Other investing activities	(4)		8		Other investing activities	3		(4)
Net cash used in investing activities	Net cash used in investing activities	(528)		(578)		Net cash used in investing activities	(701)		(528)

Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:
Repayments of short-term debt, net	Repayments of short-term debt, net	0		(974)		Repayments of short-term debt, net	(1,035)		—
Proceeds from long-term debt, net of discounts and premiums		0		4,960
Proceeds from long-term debt, net of discounts						Proceeds from long-term debt, net of discounts	3,957		—
Repayments of long-term debt	Repayments of long-term debt	(1,390)		(27)		Repayments of long-term debt	(1,054)		(1,390)
Repurchases of common stock	Repurchases of common stock	(3,788)		(791)		Repurchases of common stock	(2,308)		(3,788)
Proceeds from sales of common stock	Proceeds from sales of common stock	13		18		Proceeds from sales of common stock	5		13
Cash dividends	Cash dividends	(1,775)		(1,611)		Cash dividends	(1,962)		(1,775)
Other financing activities	Other financing activities	(130)		(125)		Other financing activities	(182)		(130)
Net cash (used in) provided by financing activities		(7,070)		1,450
Net cash used in financing activities						Net cash used in financing activities	(2,579)		(7,070)
Change in cash and cash equivalents	Change in cash and cash equivalents	(1,288)		6,609		Change in cash and cash equivalents	509		(1,288)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	41		(46)		Effect of exchange rate changes on cash and cash equivalents	(8)		41
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	7,895		2,133		Cash and cash equivalents at beginning of period	2,343		7,895
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	6,648	$	8,696	Cash and cash equivalents at end of period	$	2,844	$	6,648

Supplemental Disclosures:	Supplemental Disclosures:					Supplemental Disclosures:
Cash paid for interest, net of interest capitalized	Cash paid for interest, net of interest capitalized	$	382	$	338	Cash paid for interest, net of interest capitalized	$	415	$	382
Cash paid for income taxes	Cash paid for income taxes	226		59		Cash paid for income taxes	213		226

See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

The Home Depot, Inc., together with its subsidiaries (the “Company,” “Home Depot,” “we,” “our” or “us”), is a home improvement retailer that sells a wide assortment of building materials, home improvement products, lawn and garden products, décor items, and facilities maintenance, repair and operations products, and provides a number of services, in stores and online. We operate in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each representing one of our 3 operating segments, which we aggregate into 1 reportable segment due to their similar operating and financial characteristics.

Basis of Presentation

The accompanying consolidated financial statements of ~~The Home Depot, Inc. and its subsidiaries (the "Company," "Home Depot," "we," "our" or "us")~~the Company have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our ~~2020~~2021 Form 10-K.

There were no significant changes to our significant accounting policies as disclosed in the ~~2020~~2021 Form 10-K.

~~Recently Adopted~~Recent Accounting Pronouncements

~~ASU No. 2019-12.~~ ~~In December 2019,~~We did not adopt any new accounting pronouncements during the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Amendments include removal of certain exceptions to the general principles of Topic 740, “Income Taxes,” and simplification in several other areas. On Februarythree months ended May 1, ~~2021, we adopted ASU No. 2019-12 with no~~2022 that had a material impact toon our consolidated financial condition, results of operations or cash flows.

~~Recently Issued Accounting Pronouncements~~

Recent accounting pronouncements pending adoption not discussed ~~above or~~ in the ~~2020~~2021 Form 10-K are either not applicable or will not have or are not expected to have a material impact on our consolidated financial condition, results of operations or cash flows.

2.NET SALES

~~Net Sales~~

~~No sales to an individual customer accounted for more than 10% of our net sales during the three months ended May 2, 2021 or May 3, 2020.~~ The following table presents net sales, classified by geography:


		Three Months Ended						Three Months Ended
in millions	in millions		May 2, 2021		May 3, 2020		in millions		May 1, 2022		May 2, 2021
Net sales – in the U.S.	Net sales – in the U.S.		$	34,717	$	26,418	Net sales – in the U.S.		$	36,006	$	34,717
Net sales – outside the U.S.	Net sales – outside the U.S.		2,783		1,842		Net sales – outside the U.S.		2,902		2,783
Net sales	Net sales		$	37,500	$	28,260	Net sales		$	38,908	$	37,500

The following table presents net sales by products and services:


		Three Months Ended						Three Months Ended
in millions	in millions		May 2, 2021		May 3, 2020		in millions		May 1, 2022		May 2, 2021
Net sales – products	Net sales – products		$	36,271	$	27,305	Net sales – products		$	37,465	$	36,271
Net sales – services	Net sales – services		1,229		955		Net sales – services		1,443		1,229
Net sales	Net sales		$	37,500	$	28,260	Net sales		$	38,908	$	37,500

The following table presents major product lines and the related merchandising departments (and related services):


Major Product Line						Merchandising Departments
Building Materials						Building Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing
Décor						Appliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint
Hardlines						Hardware, Indoor Garden, Outdoor Garden, and Tools

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The following table presents net sales by major product lines (and related services):


		Three Months Ended						Three Months Ended
in millions	in millions		May 2, 2021		May 3, 2020		in millions		May 1, 2022		May 2, 2021
Building Materials	Building Materials		$	13,660	$	9,816	Building Materials		$	14,869	$	13,660
Décor	Décor		11,882		9,306		Décor		12,874		11,882
Hardlines	Hardlines		11,958		9,138		Hardlines		11,165		11,958
Net sales	Net sales		$	37,500	$	28,260	Net sales		$	38,908	$	37,500

Deferred Revenue

For ~~product~~products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment from customers before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. As of May ~~2, 2021~~1, 2022 and January ~~31, 2021,~~30, 2022, deferred revenue for products and services was ~~$2.5~~$2.7 billion and ~~$1.9~~$2.6 billion, respectively.

We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, ~~in net sales,~~ which generally occurs within six months of gift card issuance. As of May ~~2, 2021~~1, 2022 and January ~~31, 2021,~~30, 2022, our performance obligations for unredeemed gift cards were ~~$793~~$944 million and ~~$839 million,~~$1.0 billion, respectively. Gift card breakage income, which is our estimate of the portion of our gift card balance not expected to be redeemed, was immaterial during the three months ended May ~~2, 2021~~1, 2022 and May ~~3, 2020.~~2, 2021.

3.PROPERTY AND LEASES

Net Property and Equipment

Net property and equipment includes accumulated depreciation and amortization of ~~$24.7~~$26.6 billion as of May ~~2, 2021~~1, 2022 and ~~$24.1~~$26.1 billion as of January ~~31, 2021.~~30, 2022.

~~Table of~~ ~~Contents~~

Leases

The following table presents the consolidated balance sheet location of assets and liabilities related to operating and finance leases:


in millions	in millions	Consolidated Balance Sheet Caption	May 2, 2021		January 31, 2021		in millions	Consolidated Balance Sheet Classification	May 1, 2022		January 30, 2022
Assets:	Assets:						Assets:
Operating lease assets	Operating lease assets	Operating lease right-of-use assets	$	5,864	$	5,962	Operating lease assets	Operating lease right-of-use assets	$	5,980	$	5,968
Finance lease assets (1)	Finance lease assets (1)	Net property and equipment	2,636		2,493		Finance lease assets (1)	Net property and equipment	2,972		2,896
Total lease assets	Total lease assets		$	8,500	$	8,455	Total lease assets		$	8,952	$	8,864

Liabilities:	Liabilities:						Liabilities:
Current:	Current:						Current:
Operating lease liabilities	Operating lease liabilities	Current operating lease liabilities	$	803	$	828	Operating lease liabilities	Current operating lease liabilities	$	859	$	830
Finance lease liabilities	Finance lease liabilities	Current installments of long-term debt	165		66		Finance lease liabilities	Current installments of long-term debt	214		198
Long-term:	Long-term:						Long-term:
Operating lease liabilities	Operating lease liabilities	Long-term operating lease liabilities	5,279		5,356		Operating lease liabilities	Long-term operating lease liabilities	5,335		5,353
Finance lease liabilities	Finance lease liabilities	Long-term debt, excluding current installments	2,753		2,700		Finance lease liabilities	Long-term debt, excluding current installments	3,112		3,038
Total lease liabilities	Total lease liabilities		$	9,000	$	8,950	Total lease liabilities		$	9,520	$	9,419

—————

(1) Finance lease assets are recorded net of accumulated amortization of ~~$871 million~~$1.1 billion as of May ~~2, 2021~~1, 2022 and ~~$815 million~~$1.0 billion as of January ~~31, 2021.~~30, 2022.

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The following table presents supplemental non-cash information related to leases:


		Three Months Ended					Three Months Ended
in millions	in millions	May 2, 2021		May 3, 2020		in millions	May 1, 2022		May 2, 2021
Lease assets obtained in exchange for new operating lease liabilities	Lease assets obtained in exchange for new operating lease liabilities	$	164	$	294	Lease assets obtained in exchange for new operating lease liabilities	$	256	$	164
Lease assets obtained in exchange for new finance lease liabilities	Lease assets obtained in exchange for new finance lease liabilities	200		306		Lease assets obtained in exchange for new finance lease liabilities	148		200

4.DEBT AND DERIVATIVE INSTRUMENTS

Short-Term Debt

We have commercial paper programs that allow for borrowings up to $3.0 billion. All of our short-term borrowings in the first three months of fiscal 2022 were under these commercial paper programs, and the maximum amount outstanding at any time was $2.7 billion. In connection with these programs, we have back-up credit facilities with a consortium of banks for borrowings of up to $3.0 billion, which consist of a five-year $2.0 billion credit facility scheduled to expire in December 2023 and a 364-day $1.0 billion credit facility scheduled to expire in December 2022. At May 1, 2022, there were no outstanding borrowings under our commercial paper programs, and at January 30, 2022, we had $1.0 billion of outstanding borrowings under our commercial paper programs.

Long-Term Debt

March 2022 Issuance. In March 2022, we issued 4 tranches of senior notes.

•The first tranche consisted of $500 million of 2.70% senior notes due April 15, 2025 (the “2025 notes”) at a discount of $1 million. Interest on the 2025 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

•The second tranche consisted of $750 million of 2.875% senior notes due April 15, 2027 (the “2027 notes”) at a discount of $4 million. Interest on the 2027 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

•The third tranche consisted of $1.25 billion of 3.25% senior notes due April 15, 2032 (the “2032 notes”) at a discount of $6 million. Interest on the 2032 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

•The fourth tranche consisted of $1.5 billion of 3.625% senior notes due April 15, 2052 (the “2052 notes”) at a discount of $32 million (together with the 2025 notes, the 2027 notes, and the 2032 notes, the “March 2022 issuance”). Interest on the 2052 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

•Issuance costs for the March 2022 issuance totaled $22 million.

The 2025 notes, 2027 notes, 2032 notes, and 2052 notes may be redeemed by us at any time, in whole or in part, at the redemption price plus accrued interest up to the redemption date. Prior to the Par Call Date, as defined in the notes, the redemption price is equal to the greater of (1) 100% of the principal amount of the notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest to the Par Call Date. On or after the Par Call Date, the redemption price is equal to 100% of the principal amount of the notes. Additionally, if a Change in Control Triggering Event occurs, as defined in the notes, holders of all such notes have the right to require us to redeem those notes at 101% of the aggregate principal amount of the notes plus accrued interest up to the redemption date.

The indenture governing the notes does not generally limit our ability to incur additional indebtedness or require us to maintain financial ratios or specified levels of net worth or liquidity. The indenture governing the notes contains various customary covenants; however, none are expected to impact our liquidity or capital resources.

Repayments. In March 2022, we repaid our $700 million 3.25% senior notes and $300 million floating rate senior notes at maturity. In May 2022, subsequent to the end of our first fiscal quarter, we fully repaid our $1.25 billion 2.625% senior notes, which had a maturity date of June 2022, at the Par Call Date for the notes.

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Derivative Instruments and Hedging Activities

We had outstanding interest rate swap agreements with combined notional amounts of $5.4 billion at both May 1, 2022 and January 30, 2022. These agreements are accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. At May 1, 2022, the fair values of these agreements totaled $652 million, with $660 million recognized in other long-term liabilities and $8 million recognized in other assets on the consolidated balance sheet. At January 30, 2022, the fair values of these agreements totaled $191 million, with $249 million recognized in other long-term liabilities and $58 million recognized in other assets on the consolidated balance sheet.

All of our interest rate swap agreements designated as fair value hedges meet the shortcut method requirements under GAAP. Accordingly, the changes in the fair values of these agreements offset the changes in the fair value of the hedged long-term debt.

There were no material changes to the other hedging arrangements disclosed in our 2021 Form 10-K, and all related activity was immaterial for the periods presented within this document.

Collateral. We generally enter into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. To further limit our credit risk, we enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain derivative instruments exceeds or falls below contractually established thresholds. The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $489 million as of May 1, 2022, which was recorded in other current assets on the consolidated balance sheet. We did not hold any cash collateral as of May 1, 2022, and cash collateral both held and posted was immaterial as of January 30, 2022.

5. STOCKHOLDERS' EQUITY

Stock Rollforward

The following table presents a reconciliation of the number of shares of our common stock and cash dividends per share:


shares in millions	shares in millions	Three Months Ended			shares in millions				Three Months Ended
			May 2, 2021			May 3, 2020		shares in millions		May 1, 2022		May 2, 2021
Common stock:	Common stock:
Balance at beginning of period	Balance at beginning of period		1,789			1,786		Balance at beginning of period		1,792		1,789
Shares issued under employee stock plans	Shares issued under employee stock plans		1			2		Shares issued under employee stock plans		1		1
Balance at end of period	Balance at end of period		1,790			1,788		Balance at end of period		1,793		1,790
Treasury stock:	Treasury stock:							Treasury stock:
Balance at beginning of period	Balance at beginning of period		(712)			(709)		Balance at beginning of period		(757)		(712)
Repurchases of common stock	Repurchases of common stock		(13)			(3)		Repurchases of common stock		(7)		(13)
Balance at end of period	Balance at end of period		(725)			(712)		Balance at end of period		(764)		(725)
Shares outstanding at end of period	Shares outstanding at end of period		1,065			1,076		Shares outstanding at end of period		1,029		1,065

Cash dividends per share	Cash dividends per share		$	1.65		$	1.50	Cash dividends per share		$	1.90	$	1.65

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Share Repurchases

~~In February 2019, our Board of Directors authorized $15.0 billion in share repurchases, of which approximately $3.7 billion remained available as of May 2, 2021.~~ In May 2021, our Board of Directors approved a $20.0 billion share repurchase authorization that replaced the ~~February 2019~~previous authorization. This new authorization does not have a prescribed expiration date. As of May 1, 2022, approximately $7.4 billion of the $20.0 billion share repurchase authorization remained available.

~~In March 2020, we suspended~~The following table presents information about our ~~share~~ repurchases ~~to enhance our liquidity position during the COVID-19 pandemic. We resumed share repurchases in the first quarter~~ of ~~fiscal 2021 and repurchased 13 million shares of our~~ common stock, ~~for $4.0 billion~~all of which were completed through open market ~~purchases. In the first quarter of fiscal 2020, we repurchased 3 million shares of our common stock for $597 million through open market purchases prior to the suspension of share repurchases.~~ purchases:


in millions	Three Months Ended
		May 1, 2022		May 2, 2021
Total number of shares repurchased		7		13
Total cost of shares repurchased		$	2,250	$	4,000

These amounts may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period.

5.6.FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

•Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and

•Level 3: unobservable inputs for which little or no market data exists, therefore requiring management judgment to develop the Company’s own models with estimates and assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities that are measured at fair value on a recurring basis:


		Fair Value at May 2, 2021 Using						Fair Value at January 31, 2021 Using							May 1, 2022						January 30, 2022
in millions	in millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		in millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative agreements – assets	Derivative agreements – assets	$	0	$	117	$	0	$	0	$	172	$	0	Derivative agreements – assets	$	—	$	8	$	—	$	—	$	58	$	—
Derivative agreements – liabilities	Derivative agreements – liabilities	0		(200)		0		0		(71)		0		Derivative agreements – liabilities	—		(661)		—		—		(249)		—
Total	Total	$	0	$	(83)	$	0	$	0	$	101	$	0	Total	$	—	$	(653)	$	—	$	—	$	(191)	$	—

The fair values of our derivative instruments are determined using an income approach and Level 2 inputs, which include the respective interest rate ~~and~~or foreign currency forward curves and discount rates. Our derivative instruments are discussed further in Note 4.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment. We did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis ~~as of~~during the three months ended May ~~2, 2021~~1, 2022 or ~~January 31,~~May 2, 2021.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, receivables, ~~and~~ accounts payable, and short-term debt approximate fair value due to ~~the~~their short-term ~~maturities of these financial instruments.~~nature.

The following table presents the aggregate fair values and carrying values of our senior notes:


		May 2, 2021				January 31, 2021					May 1, 2022				January 30, 2022
in millions	in millions	Fair Value (Level 1)		Carrying Value		Fair Value (Level 1)		Carrying Value		in millions	Fair Value (Level 1)		Carrying Value		Fair Value (Level 1)		Carrying Value
Senior notes	Senior notes	$	37,864	$	32,943	$	41,289	$	34,472	Senior notes	$	36,896	$	38,295	$	39,397	$	35,815

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6.7.WEIGHTED AVERAGE COMMON SHARES

The following table presents the reconciliation of our basic to diluted weighted average common shares:


		Three Months Ended				Three Months Ended
in millions	in millions		May 2, 2021	May 3, 2020	in millions		May 1, 2022	May 2, 2021
Basic weighted average common shares	Basic weighted average common shares		1,071	1,073	Basic weighted average common shares		1,030	1,071
Effect of potentially dilutive securities(1)	Effect of potentially dilutive securities(1)		4	4	Effect of potentially dilutive securities(1)		4	4
Diluted weighted average common shares	Diluted weighted average common shares		1,075	1,077	Diluted weighted average common shares		1,034	1,075

Anti-dilutive securities excluded from diluted weighted average common shares	Anti-dilutive securities excluded from diluted weighted average common shares		0	0	Anti-dilutive securities excluded from diluted weighted average common shares		1	—

—————

(1) Represents the dilutive impact of stock-based awards.

7.8.~~COMMITMENTS AND~~ CONTINGENCIES

We are involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

8.~~HD SUPPLY ACQUISITION~~

On December 24, 2020, we completed the acquisition of HD Supply for total purchase consideration of $8.7 billion. HD Supply is a leading national distributor of MRO products in the multifamily and hospitality end markets. The acquisition was funded through cash on hand, a portion of which was replaced with the proceeds from our issuance of $3.0 billion of senior notes in January 2021.

The acquisition was accounted for in accordance with Topic 805 "Business Combinations" and, accordingly, HD Supply’s results of operations have been consolidated in the Company’s financial statements since December 24, 2020, the date of acquisition. We recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of December 24, 2020. There were no material adjustments to our preliminary purchase price allocation recognized during the first quarter of fiscal 2021. The final determination of the fair values and related income tax impacts will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

The Home Depot, Inc.:

Results of Review of Interim Financial Information

We have reviewed the consolidated balance sheet of The Home Depot, Inc. and its subsidiaries (the “Company”) as of May ~~2, 2021,~~1, 2022, the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the three-month periods ended May ~~2, 2021~~1, 2022 and May ~~3, 2020~~2, 2021, and the related notes (collectively, the “consolidated interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of January ~~31, 2021,~~30, 2022, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the fiscal year then ended (not presented herein); and in our report dated March ~~24, 2021,~~23, 2022, we expressed an unqualified opinion on those consolidated financial statements. ~~Our report referred to a change in the Company’s method of accounting for leases.~~ In our opinion, the information set forth in the accompanying consolidated balance sheet as of January ~~31, 2021,~~30, 2022, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP

Atlanta, Georgia

May ~~24, 2021~~

23, 2022

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion provides an analysis of the Company’s financial condition and results of operations from management's perspective and should be read in conjunction with the consolidated financial statements and related notes included in this report and in the 2021 Form 10-K and with our MD&A included in the 2021 Form 10-K. Our MD&A includes the following sections:

•Executive Summary

•Results of Operations ~~and Non-GAAP Financial Measures~~

•Liquidity and Capital Resources

•Critical Accounting Policies

Executive Summary

The following table presents ~~quarter to date~~quarter-to-date highlights of our financial performance:


dollars in millions, except per share data	dollars in millions, except per share data	Three Months Ended			dollars in millions, except per share data				Three Months Ended
			May 2, 2021			May 3, 2020		dollars in millions, except per share data		May 1, 2022		May 2, 2021
Net sales	Net sales		$	37,500		$	28,260			$	38,908	$	37,500
Net earnings	Net earnings		4,145			2,245		Net earnings		4,231		4,145

Diluted earnings per share	Diluted earnings per share		$	3.86		$	2.08	Diluted earnings per share		$	4.09	$	3.86

Net cash provided by operating activities	Net cash provided by operating activities		$	6,310		$	5,737	Net cash provided by operating activities		$	3,789	$	6,310
Proceeds from long-term debt, net of discounts and premiums			—			4,960
Proceeds from long-term debt, net of discounts								Proceeds from long-term debt, net of discounts		3,957		—
Repayments of long-term debt	Repayments of long-term debt		1,390			27		Repayments of long-term debt		1,054		1,390
Repurchases of common stock	Repurchases of common stock		3,788			791		Repurchases of common stock		2,308		3,788

We reported net sales of ~~$37.5~~$38.9 billion in the first quarter of fiscal ~~2021.~~2022. Net earnings were ~~$4.1~~$4.2 billion, or ~~$3.86~~$4.09 per diluted share.

We ~~opened~~lost one store in the U.S. ~~and one store in Mexico~~ during the first quarter of fiscal ~~2021,~~2022 due to a fire, resulting in a total store count of ~~2,298~~2,316 at ~~the end of the quarter. As of~~ May ~~2, 2021, a~~1, 2022. A total of ~~310 of our~~311 stores, or ~~13.5%~~13.4%, were located in Canada and Mexico. For the first quarter of fiscal ~~2021,~~2022, sales per retail square foot were ~~$605.60.~~$621.99. Our inventory turnover ratio was 4.4 times at the end of the first quarter of fiscal 2022, compared to 5.5 times ~~up from 5.0 times last year,~~at the end of the first quarter of fiscal 2021. The decrease in our inventory turnover ratio was primarily driven by ~~a significant~~an increase in ~~customer~~average inventory levels during the first quarter of fiscal 2022, which primarily resulted from the strong demand ~~across our merchandising departments.~~environment, the impact of inflation, and the delayed start to spring.

We generated ~~$6.3~~$3.8 billion of cash flow from operations and issued $4.0 billion of long-term debt, net of discounts, during the first three months of fiscal ~~2021.~~2022. This cash flow, together with cash on hand, was used to fund cash payments of ~~$3.8~~$2.3 billion for share repurchases, ~~after resuming share repurchases in the first quarter of fiscal 2021, pay $1.8 billion of dividends,~~ repay an aggregate of ~~$1.4~~$2.1 billion of long-term and short-term debt, pay $2.0 billion of dividends, and fund ~~$524~~$704 million in capital expenditures. In February ~~2021,~~2022, we announced a ~~10%~~15% increase in our quarterly cash dividend to ~~$1.65~~$1.90 per share.

Our ROIC for the trailing twelve-month period was 45.3% at the end of the first quarter of fiscal 2022 and 45.1% at the end of the first quarter of fiscal ~~2021 and 40.8% at the end of the first quarter of fiscal 2020.~~2021. See the "“Non-GAAP Financial Measures"” section below for our definition and calculation of ROIC, as well as a reconciliation of NOPAT, a non-GAAP financial measure, to net earnings (the most comparable GAAP financial measure).

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Results of Operations ~~and Non-GAAP Financial Measures~~

The tables and discussion below should be read in conjunction with our consolidated financial statements and related notes included in this report and in the 2020 Form 10-K and with our MD&A included in the 2020 Form 10-K. The following table presents the percentage relationship between net sales and major categories in our consolidated statements of earnings.

Fiscal ~~2021~~2022 and Fiscal ~~2020~~2021 Three Month Comparisons


		Three Months Ended									Three Months Ended
		May 2, 2021				May 3, 2020					May 1, 2022				May 2, 2021
dollars in millions	dollars in millions	$		% of Net Sales		$		% of Net Sales		dollars in millions	$		% of Net Sales		$		% of Net Sales
Net sales	Net sales	$	37,500			$	28,260			Net sales	$	38,908			$	37,500
Gross profit	Gross profit	12,742		34.0	%	9,625		34.1	%	Gross profit	13,145		33.8	%	12,742		34.0	%
Operating expenses:	Operating expenses:									Operating expenses:
Selling, general and administrative	Selling, general and administrative	6,374		17.0		5,829		20.6		Selling, general and administrative	6,610		17.0		6,374		17.0
Depreciation and amortization	Depreciation and amortization	587		1.6		520		1.8		Depreciation and amortization	606		1.6		587		1.6
Total operating expenses	Total operating expenses	6,961		18.6		6,349		22.5		Total operating expenses	7,216		18.5		6,961		18.6
Operating income	Operating income	5,781		15.4		3,276		11.6		Operating income	5,929		15.2		5,781		15.4
Interest and other (income) expense:	Interest and other (income) expense:									Interest and other (income) expense:
Interest and investment income		(6)		—		(17)		(0.1)
Interest income and other, net										Interest income and other, net	(3)		—		(6)		—
Interest expense	Interest expense	339		0.9		324		1.1		Interest expense	372		1.0		339		0.9
Interest and other, net	Interest and other, net	333		0.9		307		1.1		Interest and other, net	369		0.9		333		0.9
Earnings before provision for income taxes	Earnings before provision for income taxes	5,448		14.5		2,969		10.5		Earnings before provision for income taxes	5,560		14.3		5,448		14.5
Provision for income taxes	Provision for income taxes	1,303		3.5		724		2.6		Provision for income taxes	1,329		3.4		1,303		3.5
Net earnings	Net earnings	$	4,145	11.1	%	$	2,245	7.9	%	Net earnings	$	4,231	10.9	%	$	4,145	11.1	%

—————

Note: Certain percentages may not sum to totals due to rounding.

Three Months Ended
Selected financial and sales data: May 2,
2021 May 3,
2020 % Change
Comparable sales (% change) (1)
31.0 % 6.4 % N/A
Comparable customer transactions (% change) (1) (2)
19.1 % (4.0) % N/A
Comparable average ticket (% change) (1) (2)
10.3 % 11.1 % N/A
Customer transactions (in millions) (1) (2)
447.2 374.8 19.3 %
Average ticket (1) (2) (3)
$ 82.37 $ 74.70 10.3 %
Sales per retail square foot (1) (2) (4)
$ 605.60 $ 466.58 29.8 %
Diluted earnings per share $ 3.86 $ 2.08 85.6 %


	Three Months Ended
Selected financial and sales data:	May 1, 2022			May 2, 2021			% Change
Comparable sales (% change)	2.2		%	31.0		%	N/A
Comparable customer transactions (% change) (1)	(8.4)		%	19.1		%	N/A
Comparable average ticket (% change) (1)	11.2		%	10.3		%	N/A
Customer transactions (in millions) (1)	410.7			447.2			(8.2)	%
Average ticket (1) (2)	$	91.72		$	82.37		11.4	%
Sales per retail square foot (1) (3)	$	621.99		$	605.60		2.7	%
Diluted earnings per share	$	4.09		$	3.86		6.0	%

—————

(1)Does not include results for HD ~~Supply, which was acquired in December 2020.~~Supply.

(2)~~Does not include results for the legacy Interline Brands business.~~

~~(3)~~Average ticket represents the average price paid per transaction and is used by management to monitor the performance of the Company, as it represents a primary driver in measuring sales performance.

~~(4)~~(3)Sales per retail square foot represents annualized sales divided by retail store square footage. Sales per retail square foot is a measure of the efficiency of sales based on the total square footage of our stores and is used by management to monitor the performance of the ~~Company~~Company’s retail operations as an indicator of the productivity of owned and leased square footage for these retail operations.

Table of Contents

Sales. We assess our sales performance by evaluating both net sales and comparable sales.

Net Sales. Net sales for the first quarter of fiscal ~~2021~~2022 increased ~~32.7%~~$1.4 billion, or 3.8%, to ~~$37.5~~$38.9 billion from ~~$28.3~~$37.5 billion for the first quarter of fiscal ~~2020.~~2021. The increase in net sales for the first quarter of fiscal ~~2021~~2022 primarily reflected the impact of

~~Table of~~ ~~Contents~~

positive comparable sales driven by an increase in comparable average ticket, offset by a decrease in comparable customer ~~transactions and comparable average ticket. The first quarter of fiscal 2020 included an adverse impact to~~transactions. A stronger U.S. dollar negatively impacted net sales ~~during the second half of the quarter due to the restrictions we put in place~~by $23 million in the first quarter of fiscal 2020 to prioritize the safety of our customers and associates in response to the COVID-19 pandemic. We reduced store hours, limited customer traffic in stores, canceled certain spring events, and restricted sales and installation of in-home services deemed non-essential, all of which negatively impacted our sales during the first quarter of fiscal 2020. 2022.

Online sales, which consist of sales generated online through our websites for products picked up at our stores or delivered to customer locations, represented 14.3% of net sales and grew by ~~27.1%~~3.7% during the first quarter of fiscal ~~2021~~2022 compared to the first quarter of fiscal ~~2020.~~2021. The increase in online sales for the first quarter of fiscal ~~2021~~2022 was driven by customers continuing to leverage our digital platforms for their shopping needs. ~~A weaker U.S. dollar positively impacted sales growth by $157 million in the first quarter of fiscal 2021.~~

Comparable Sales. Comparable sales is a measure that highlights the performance of our existing locations and websites by measuring the change in net sales for a period over the comparable prior-period of equivalent length. Comparable sales includes sales at all locations, physical and online, open greater than 52 weeks (including remodels and relocations) and excludes ~~permanently~~ closed stores. Retail stores become comparable on the Monday following their 52nd week of operation. Acquisitions are typically included in comparable sales after they have been owned for more than 52 weeks. Comparable sales is intended only as supplemental information and is not a substitute for net sales presented in accordance with GAAP.

Total comparable sales increased ~~31.0%~~2.2% for the first quarter of fiscal ~~2021,~~2022, reflecting ~~a 10.3%~~an 11.2% increase in comparable average ticket, ~~and a 19.1% increase~~partially offset by an 8.4% decrease in comparable customer transactions compared to the first quarter of fiscal 2020. The increase in comparable sales reflected a number of factors, including increased consumer demand across our core categories and the execution of our strategic efforts to drive an enhanced interconnected shopping experience in both the physical and digital worlds. The increase in comparable customer transactions was driven by strong customer traffic both physically and digitally.2021. The increase in comparable average ticket was primarily driven by ~~elevated project demand, commodity price~~ inflation, ~~largely from lumber, and stronger~~as well as demand for new and innovative products.

~~All~~ The decrease in comparable customer transactions was primarily due to lapping comparable transactions of ~~our merchandising departments posted positive comparable sales~~19.1% that we experienced in the first quarter of fiscal 2021 ~~with 13~~and the impact of the delayed start to spring in fiscal 2022.

During the first quarter of fiscal 2022, 11 of our 14 merchandising departments ~~posting~~posted positive comparable sales, ~~at or above 20%,~~ led by ~~Lumber~~Plumbing, Building Materials, Millwork, and ~~Kitchen~~Paint. Our Outdoor and ~~Bath.~~Indoor Garden departments had double-digit negative comparable sales due to the late arrival of spring this year, and our Appliances department had slightly negative comparable sales, which were impacted by a shift in event timing into the second quarter of fiscal 2022.

Gross Profit. Gross profit for the first quarter of fiscal ~~2021~~2022 increased ~~32.4%~~3.2% to ~~$12.7~~$13.1 billion from ~~$9.6~~$12.7 billion for the first quarter of fiscal ~~2020.~~2021. Gross profit as a percentage of net sales, or gross profit margin, was 33.8% for the first quarter of fiscal 2022 compared to 34.0% for the first quarter of fiscal ~~2021 compared to 34.1% for the first quarter of fiscal 2020.~~2021. The decrease in gross profit margin ~~was primarily driven by pressure from mix of product sold, offset by the benefit from lower promotional markdowns as a result of the strong demand environment~~ during the first quarter of fiscal ~~2021.~~2022 was primarily driven by investments in our supply chain network, rate and mix pressure from lumber, and higher product and transportation costs offset by the benefit from higher retail prices.

Operating Expenses. Our operating expenses are composed of SG&A and depreciation and amortization.

Selling, General & Administrative. SG&A for the first quarter of fiscal ~~2021~~2022 increased ~~9.3%~~$236 million, or 3.7%, to ~~$6.4~~$6.6 billion from ~~$5.8~~$6.4 billion for the first quarter of fiscal ~~2020.~~2021. As a percentage of net sales, SG&A was 17.0% for the first quarter of both fiscal 2022 and fiscal 2021, ~~compared to 20.6% for the first quarter of fiscal 2020. The decrease in SG&A as a percentage of net sales was~~ primarily ~~driven by~~reflecting leverage ~~resulting~~ from a positive comparable sales environment, and cycling several COVID-19 related expenses that we incurred during the first quarter of fiscal 2020, including $848 million of additional expense related to expanded benefits to support our associates. Total COVID-19 related expenses, including additional expense related to expanded benefits and operational expenses, were $78 million for the first quarter of fiscal 2021 compared to $864 million for the first quarter of fiscal 2020. This operating expense leverage was partially offset by ~~an increase in~~wage investments for hourly ~~payroll-related costs resulting from the increased demand environment throughout the first quarter of fiscal 2021,~~associates as well as ~~higher accrued bonus expense, primarily related~~increased operational costs, including investments designed to ~~the impact of~~drive efficiencies in our ~~outperformance on our store success sharing program and store and field-based management bonuses.~~stores.

Depreciation and Amortization. Depreciation and amortization for the first quarter of fiscal 2022 increased ~~12.9%~~$19 million, or 3.2%, to $606 million from $587 million for the first quarter of fiscal ~~2021 from $520 million for the first quarter of fiscal 2020.~~2021. As a percentage of net sales, depreciation and amortization was 1.6% for the first quarter of both fiscal 2022 and fiscal 2021, ~~compared to 1.8% for the first quarter of fiscal 2020. The decrease in depreciation and amortization as a percentage of net sales~~ primarily ~~reflected~~reflecting leverage ~~resulting~~ from a positive comparable sales ~~environment.~~environment, offset by increased depreciation expense from strategic investments in the business.

Interest and Other, net. Interest and other, net, was $369 million for the first quarter of fiscal 2022 compared to $333 million for the first quarter of fiscal ~~2021 compared to $307 million for the first quarter of fiscal 2020.~~2021. Interest and other, net, as a percentage of net sales was 0.9% for the first quarter of both fiscal 2022 and fiscal 2021, ~~compared~~primarily reflecting higher interest expense due to ~~1.1% for~~higher debt balances during the first quarter of fiscal ~~2020. The decrease in interest and other, net, as a percentage of net sales primarily reflected~~2022, offset by leverage ~~resulting~~ from a positive comparable sales ~~environment offset by higher interest expense resulting from higher debt balances.~~environment.

~~Table of~~ ~~Contents~~

Provision for Income Taxes. Our combined effective income tax rate was 23.9% for the first quarter of both fiscal ~~2021 compared to 24.4% for the first quarter of~~2022 and fiscal ~~2020.~~2021.

Diluted Earnings per Share. Diluted earnings per share were $4.09 for the first quarter of fiscal 2022 compared to $3.86 for the first quarter of fiscal ~~2021 compared to $2.08 for the first quarter of fiscal 2020.~~2021. The increase in diluted earnings per share ~~for~~was driven by lower diluted shares due to share repurchases, as well as higher net earnings during the first quarter of fiscal ~~2021 reflected the impact~~2022.

Table of ~~a positive comparable sales environment along with disciplined expense control.~~Contents

Non-GAAP Financial Measures

To provide clarity about our operating performance, we supplement our reporting with certain non-GAAP financial measures. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Non-GAAP financial measures presented herein may differ from similar measures used by other companies.

Return on Invested Capital. We believe ROIC is meaningful for investors and management because it measures how effectively we deploy our capital base. We define ROIC as NOPAT, a non-GAAP financial measure, for the most recent twelve-month period, divided by average debt and equity. We define average debt and equity as the average of beginning and ending long-term debt (including current installments) and equity for the most recent twelve-month period.

The following table presents the calculation of ROIC, together with a reconciliation of NOPAT to net earnings (the most comparable GAAP measure):


		Twelve Months Ended							Twelve Months Ended
dollars in millions	dollars in millions	May 2, 2021			May 3, 2020			dollars in millions	May 1, 2022			May 2, 2021
Net earnings	Net earnings	$	14,766		$	10,974		Net earnings	$	16,519		$	14,766
Interest and other, net	Interest and other, net	1,326			1,162			Interest and other, net	1,339			1,326
Provision for income taxes	Provision for income taxes	4,691			3,386			Provision for income taxes	5,330			4,691
Operating income	Operating income	20,783			15,522			Operating income	23,188			20,783
Income tax adjustment (1)	Income tax adjustment (1)	(5,012)			(3,689)			Income tax adjustment (1)	(5,628)			(5,012)
NOPAT	NOPAT	$	15,771		$	11,833		NOPAT	$	17,560		$	15,771

Average debt and equity	Average debt and equity	$	34,970		$	29,038		Average debt and equity	$	38,761		$	34,970

ROIC	ROIC	45.1		%	40.8		%	ROIC	45.3		%	45.1		%

—————

(1)Income tax adjustment is defined as operating income multiplied by our effective tax rate for the trailing twelve months.

~~Additional Information~~

~~For information on accounting pronouncements that have impacted or are expected to materially impact our consolidated financial condition, results of operations or cash flows, see~~ ~~Note 1~~ ~~to our consolidated financial statements.~~

Liquidity and Capital Resources

~~Cash and Cash Equivalents~~

At May ~~2, 2021,~~1, 2022, we had ~~$6.6~~$2.8 billion in cash and cash equivalents, of which ~~$747~~$604 million was held by our foreign subsidiaries. We believe that our current cash position, cash flow generated from operations, funds available from our commercial paper programs, and access to the long-term debt capital markets ~~cash flow generated from operations, and funds available from our commercial paper programs~~ should be sufficient not only for our operating requirements but also to enable us to ~~complete our~~invest in the business through capital ~~expenditure programs,~~expenditures, fund dividend payments, fund any share repurchases, ~~and~~ make any required ~~long-term~~ debt payments, and satisfy other contractual obligations through the next several fiscal years. ~~We may also maintain an elevated cash position during fiscal 2021 as circumstances warrant.~~ In addition, we believe that we have the ability to obtain alternative sources of financing, if necessary.

~~For fiscal 2021,~~Our material cash requirements include contractual and other obligations arising in the normal course of business. These obligations primarily include long-term debt and related interest payments, operating and finance lease obligations, and purchase obligations.

In addition to our cash requirements, we ~~will continue to~~ follow ~~our~~a disciplined approach to capital ~~allocation, and~~allocation. This approach first prioritizes investing in the business followed by paying dividends, with the intent of then returning excess cash to shareholders in the form of share repurchases. For fiscal 2022, we ~~currently estimate~~plan to invest approximately $3 billion back into the business in the form of capital expenditures, in line with our expectation of approximately two percent of net sales on an annual basis. However, we may adjust our capital expenditures to support the operations of the business, to enhance long-term strategic positioning, or in response to the economic environment, as necessary or appropriate.

During the first three months of fiscal 2022, we paid cash dividends of $2.0 billion to shareholders. In February 2022, we also announced a 15% increase in our quarterly cash dividend from $1.65 to $1.90 per share. We intend to pay a dividend in the future; however, any future dividend is subject to declaration by our Board of Directors based on our earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors.

Table of Contents

~~Debt~~In May 2021, our Board of Directors approved a $20.0 billion share repurchase authorization, of which $7.4 billion remained available as of May 1, 2022. This new authorization replaced the previous authorization and ~~Derivative Instruments~~does not have a prescribed expiration date. During the first three months of fiscal 2022, we had cash payments of $2.3 billion for repurchases of our common stock through open market purchases. The amount and continuation of our share repurchases will be influenced by the evolving economic environment and business conditions.

Debt

We have commercial paper programs that allow for borrowings of up to $3.0 billion. ~~All of our short-term borrowings in the first three months of fiscal 2021 were under these commercial paper programs, and the maximum amount outstanding at any time was $11 million.~~ In connection with these programs, we have back-up credit facilities with a consortium of banks for borrowings up to $3.0 billion, which consist of a five-year $2.0 billion credit facility scheduled to expire in December 2023 and a 364-day $1.0 billion credit facility scheduled to expire in December ~~2021.~~2022. At May ~~2, 2021,~~1, 2022, there were no outstanding borrowings under our commercial paper programs, and we were in compliance with all of the covenants contained in ~~the~~our credit facilities, none of which are expected to impact our liquidity or capital resources. ~~At May 2, 2021 and January 31, 2021, there were no outstanding borrowings under our commercial paper programs. We may enter into additional credit facilities or other debt financing.~~

We also issue senior notes from time to time as part of our capital management strategy. In March ~~2021,~~2022, we issued $4.0 billion of senior notes. The net proceeds from this issuance are being used for general corporate purposes, including repayment of outstanding indebtedness and repurchases of shares of our common stock, subject to market conditions and other business considerations. In March 2022, we also repaid $1.0 billion of senior notes at maturity. In May 2022, subsequent to the end of our first fiscal quarter, we fully repaid ~~our $1.35~~$1.25 billion ~~2.00%~~of senior notes, ~~that~~which had a maturity date in June 2022, at the Par Call Date for the notes.

The indentures governing our senior notes do not generally limit our ability to incur additional indebtedness or require us to maintain financial ratios or specified levels of ~~April 2021.~~

~~We use derivative and nonderivative instruments as part~~net worth or liquidity. The indentures governing our notes contain various customary covenants; however, none are expected to impact our liquidity or capital resources. See Note 4 to our consolidated financial statements for further discussion of our ~~normal business operations in the management of our exposure to fluctuations in foreign currency exchange rates and interest rates on certain long-term debt.~~

~~Share Repurchases~~

In February 2019, our Board of Directors authorized $15.0 billion in share repurchases, of which approximately $3.7 billion remained available as of May 2, 2021. In May 2021, our Board of Directors approved a $20.0 billion share repurchase authorization that replaced the February 2019 authorization. This new authorization does not have a prescribed expiration date.

In March 2020, we suspended our share repurchases to enhance our liquidity position during the COVID-19 pandemic. We resumed share repurchases in the first quarter of fiscal 2021, the amount and continuation of which will be influenced by the evolving economic environment as well as business conditions. In the first three months of fiscal 2021, we had cash payments of $3.8 billion for repurchases of our common stock through open market purchases.debt arrangements.

Cash Flows Summary

Operating Activities. Cash flow generated from operations provides us with a significant source of liquidity. Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, associate compensation, operations, occupancy costs, and ~~occupancy costs.~~income taxes.

Cash provided by or used in operating activities is also subject to changes in working capital. Working capital at any point in time is subject to many variables, including seasonality, inventory management and category expansion, the timing of cash receipts and payments, vendor payment terms, and fluctuations in foreign exchange rates.

Net cash provided by operating activities ~~increased~~decreased by ~~$573 million~~$2.5 billion in the first three months of fiscal ~~2021~~2022 compared to the first three months of fiscal ~~2020 and was~~2021, primarily driven by changes in working capital, slightly offset by an increase in net ~~earnings, partially offset by changes in working capital.~~earnings. Working capital was primarily impacted by timing of vendor payments, along with higher merchandise inventories at the end of the first quarter of fiscal 2022 resulting from several factors, including product and transportation cost inflation, a high demand environment, actions taken to ~~continue~~improve in-stocks, and a delayed start to ~~support increased demand.~~spring.

Investing Activities. Cash used in investing activities ~~decreased~~increased by ~~$50~~$173 million in the first three months of fiscal ~~2021~~2022 compared to the first three months of fiscal ~~2020,~~2021, primarily ~~as a result of~~resulting from increased capital ~~expenditures of $524 million during the first three months of fiscal 2021 compared to $586 million of capital expenditures~~expenditures.

Financing Activities. Cash used in financing activities in the first three months of fiscal ~~2020.~~

~~Financing Activities.~~ 2022 primarily reflected $2.3 billion of share repurchases, $2.0 billion of cash dividends paid, $1.1 billion of repayments of long-term debt, and $1.0 billion of repayments for short-term debt, partially offset by $4.0 billion of net proceeds from long-term debt. Cash used in financing activities in the first three months of fiscal 2021 primarily reflected $3.8 billion of share repurchases, $1.8 billion of cash dividends paid, and $1.4 billion of repayments of long-term debt.

~~Cash provided by financing activities in~~

Critical Accounting Policies

During the first three months of fiscal 2020 primarily reflected $5.0 billion of net proceeds from long-term debt, partially offset by $1.6 billion of cash dividends paid, $974 million of net repayments of short-term debt, and $791 million of share repurchases prior to our suspension of share repurchases in March 2020.

~~Critical Accounting Policies~~

~~There~~2022, there were no changes ~~during the first three months of fiscal 2021~~ to our critical accounting policies as disclosed in the ~~2020~~2021 Form 10-K. ~~Our~~Refer to Note 1 of our consolidated financial statements for further discussion regarding our significant accounting ~~policies~~policies.

Additional Information

For information on accounting pronouncements that have impacted or are ~~disclosed in~~expected to materially impact our consolidated financial condition, results of operations or cash flows, see Note 1 to our consolidated financial statements.

1617

Table of Contents

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our exposure to market risk results primarily from fluctuations in interest rates in connection with our long-term debt portfolio. We are also exposed to risks from foreign currency exchange rate fluctuations on the translation of our foreign operations into U.S. dollars and on the purchase of goods by these foreign operations that are not denominated in their local currencies. Additionally, we may experience inflation and deflation related to our purchase of certain commodity products. There have been no material changes to our exposure to market risks, including the instruments we use to manage our exposure to such risks, from those disclosed in the ~~2020~~2021 Form 10-K.

Item 4. Controls and Procedures.

Under the direction and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) and concluded that our disclosure controls and procedures were effective as of May ~~2, 2021.~~1, 2022.

We are in the process of an ongoing business transformation initiative, which ~~began in fiscal 2020 and~~ includes upgrading and migrating certain accounting and finance ~~systems in the U.S.~~systems. We plan to continue to migrate additional business processes over the course of the next few years and have modified and will continue to modify the design and implementation of certain internal control processes as the integration continues.

Except as described above, there were no other changes in our internal control over financial reporting during the fiscal quarter ended May ~~2, 2021~~1, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed under Item 1A, ~~"Risk Factors"~~“Risk Factors” and elsewhere in the ~~2020~~2021 Form 10-K. These risks and uncertainties could materially and adversely affect our business, consolidated financial condition, results of operations, or cash flows. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently do not consider material to our business. There have been no material changes in the risk factors discussed in the ~~2020~~2021 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~Issuer Purchases of Equity Securities~~ISSUER PURCHASES OF EQUITY SECURITIES

The following table presents the number and average price of shares purchased in each fiscal month of the first quarter of fiscal ~~2021:~~2022:

Period
Total Number of Shares Purchased (1)
Average Price Paid Per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Program (2)
Dollar Value of Shares that May Yet Be Purchased Under the Program (2)
February 1, 2021 – February 28, 2021 430,892 $ 258.37 413,567 $ 7,573,513,992
March 1, 2021 – March 28, 2021 5,204,927 279.44 4,853,527 6,223,078,977
March 29, 2021 – May 2, 2021 7,997,867 317.98 7,996,335 3,680,368,511
Total 13,633,686 301.39 13,263,429


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Program (2)	Dollar Value of Shares that May Yet Be Purchased Under the Program (2)
January 31, 2022 – February 27, 2022	1,645,383	$	347.07	1,626,917	$	9,053,183,815
February 28, 2022 – March 27, 2022	627,670	319.18		279,283	8,963,898,777
March 28, 2022 – May 1, 2022	5,209,451	306.35		5,208,219	7,368,369,778
Total	7,482,504	316.38		7,114,419

—————

(1)These amounts include repurchases pursuant to our Amended and Restated 2005 Omnibus Stock Incentive Plan and our 1997 Omnibus Stock Incentive Plan (collectively, the ~~"Plans"~~“Plans”). Under the Plans, participants may surrender shares as payment of applicable tax withholding on the vesting of restricted stock. Participants in the Plans may also exercise stock options by surrendering shares of common stock that the participants already own as payment of the exercise price. Shares so surrendered by participants in the Plans are repurchased pursuant to the terms of the Plans and applicable award agreement and not pursuant to publicly announced share repurchase programs.

(2) In February 2019, our Board of Directors authorized $15.0 billion in share repurchases that replaced the previous authorization, of which $3.7 billion remained available at the end of the first quarter of fiscal 2021. In May 2021, our Board of Directors ~~authorized~~approved a $20.0 billion in share ~~repurchases~~repurchase authorization that replaced the ~~February 2019~~previous authorization. This new authorization does not have a prescribed expiration date.

~~Sales~~

Table of ~~Unregistered Securities~~Contents

SALES OF UNREGISTERED SECURITIES

During the first quarter of fiscal ~~2021,~~2022, we issued ~~443~~556 deferred stock units under ~~the~~The Home Depot, Inc. Nonemployee Directors’ Deferred Stock Compensation Plan pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of the SEC’s Regulation D thereunder. The deferred stock units

~~Table~~ were credited during the first quarter of ~~Contents~~

~~were credited~~fiscal 2022 to the accounts of those non-employee directors who elected to receive all or a portion of board retainers in the form of deferred stock units instead of ~~cash during the first quarter of fiscal 2021.~~cash. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in this plan.

During the first quarter of fiscal ~~2021,~~2022, we credited ~~938~~12,814 deferred stock units to participant accounts under the Restoration Plan pursuant to an exemption from the registration requirements of the Securities Act for involuntary, non-contributory plans. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in this plan.

Item 6. Exhibits.

Exhibits marked with an asterisk (*) are incorporated by reference to exhibits or appendices previously filed with the SEC, as indicated by the references in brackets. All other exhibits are filed or furnished herewith.


Exhibit		Description
3.1	*	Amended and Restated Certificate of Incorporation of The Home Depot, Inc.
		[Form 10-Q filed on September 1, 2011, Exhibit 3.1]
3.2	*	By-Laws of The Home Depot, Inc. (Amended and Restated Effective February 28, 2019)
		[Form 8-K filed on March 4, 2019, Exhibit 3.2]
4.1	*	Form of 2.700% Note due April 15, 2025 [Form 8-K filed on March 28, 2022, Exhibit 4.2]
4.2	*	Form of 2.875% Note due April 15, 2027 [Form 8-K filed on March 28, 2022, Exhibit 4.3]
4.3	*	Form of 3.250% Note due April 15, 2032 [Form 8-K filed on March 28, 2022, Exhibit 4.4]
4.4	*	Form of 3.625% Note due April 15, 2052 [Form 8-K filed on March 28, 2022, Exhibit 4.5]
10.1	†	Employment Arrangement between Edward P. Decker and The Home Depot, Inc., dated February 24, 2022
10.2	†	Employment Arrangement between Craig A. Menear and The Home Depot, Inc., dated February 24, 2022
10.3	†	Employment Arrangement between Matthew A. Carey and The Home Depot, Inc., dated April 19, 2022
15.1		Acknowledgement of Independent Registered Public Accounting Firm
31.1		Certification of ~~the~~ ~~Chairm~~an ~~and~~the Chief Executive Officer and Pres ident pursuant to Rule 13a-14(a)
31.2		Certification of the Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a)
32.1		Certification of ~~the~~ ~~Chairman and~~the Chief Executive Officer and Pres ident furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Executive Vice President and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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† Management contract or compensatory plan or arrangement

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


THE HOME DEPOT, INC. (Registrant)

By:			/s/ CE~~RAIG~~DWARD ~~A. M~~P. D~~ENEAR~~ECKER
			~~Craig A. Menear, Chairman and~~Edward P. Decker, Chief Executive Officer and President (Principal Executive Officer)

			/s/ RICHARD V. MCPHAIL
			Richard V. McPhail, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

			/s/ STEPHEN L. GIBBS
			Stephen L. Gibbs, Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)

Date:			May ~~24, 2021~~23, 2022

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