EXHIBIT 99.1
THE HOME DEPOT REPORTS RECORD THIRD QUARTER RESULTS
RAISES FULL YEAR EARNINGS GUIDANCE
- RECORD Q3 NET EARNINGS OF $1.15 BILLION
- RECORD Q3 SALES OF $16.6 BILLION
- RECORD Q3 DILUTED EPS OF $0.50, +25% OVER YEAR AGO
- RECORD AVERAGE TICKET OF $52.10
- SAME STORE SALES INCREASE OF 7.8%
- RAISES FULL YEAR EPS GROWTH GUIDANCE TO 15-17%
ATLANTA, NOV. 18, 2003 - The Home Depot(R), the world's largest home
improvement retailer, today reported record third quarter net earnings of $1.15
billion ($0.50 per diluted share) for fiscal 2003, compared with net earnings of
$940 million ($0.40 per diluted share) in the third quarter of fiscal 2002.
Sales for the quarter increased 14.7 percent to $16.6 billion compared with the
third quarter of fiscal 2002. Comparable store sales increased 7.8 percent, the
company's best quarterly comp performance since the fourth quarter of 1999.
The Home Depot reiterated its annual sales growth guidance of 9-12
percent and raised its full year earnings per share growth guidance to 15-17
percent for the 2003 fiscal year.
"Home Depot grew its share of the home improvement industry this
quarter, as our sales increased by $2.1 billion, more than any other home
improvement retailer," said Bob Nardelli, chairman, president and CEO of The
Home Depot. "Our customers are experiencing a better shopping environment as a
result of the significant progress we are making in every area of our business.
Our continued focus on sales, service and execution is resulting in innovative
and distinctive product selection, compelling values, and knowledgeable store
associates. Customers know that The Home Depot continues to be the leader in
home improvement and our financial results are proof positive that our strategy
is working."
"We saw strength across the country and across the majority of our
selling departments. In some of our most competitive markets we posted
double-digit comps driven by growth in the number of customer transactions and
the amount of the average ticket," added Nardelli.
Customer transactions grew to 313 million for the quarter, up 9.4
percent from the third quarter last year. The company continues to place a high
priority on improving customer service through advances in technology. At the
end of the quarter, 760 stores had self-checkout stations, with more than 40
million transactions completed during the quarter.
"Customer transactions through self-checkout are expected to top 100
million during the first week in December demonstrating strong customer
acceptance. This technology allows us to redeploy associates to assist customers
throughout the store," said Nardelli.
The average ticket grew 4.9 percent to $52.10 from one year ago, the
highest average ticket in the company's history. Average ticket increased across
the store in categories including
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lumber, appliances, outdoor power equipment and building materials. According to
The Stevenson Company, The Home Depot sequentially increased its core appliance
share more than any other top competitor in the quarter.
Sales per square foot increased to $375.45, an increase of 4.2 percent.
This achievement reflects a significant improvement from prior quarters. The
company's on-going store modernization program, including resets, remodels, and
new sign package contributed to this improvement. Collectively, the categories
that are being touched are out-performing the company.
This fall, the company's marketing showcased its leadership position in
how-to and inspirational home improvement projects in catalogs, television,
radio, and the re-launch of The Home Depot Web site. On www.homedepot.com,
customers are finding it easier to research home improvement projects and shop
online.
With over 1,640 stores in key locations throughout North America, The
Home Depot provides unparalleled access for home improvement customers. During
the quarter the company announced the opening of two stores in Manhattan in
early 2004 and recently celebrated the opening of its 100th store in Canada.
"We are continuing to position the company for future growth. Our
service business demonstrated strong performance, growing 45% in the quarter. In
the third quarter we completed the acquisition of IPUSA and last week we
announced the planned acquisition of RMA, two companies that provide
installation services for our customers. Our Home Depot Supply businesses
including Your other Warehouse and Maintenance Warehouse collectively grew
faster than the total enterprise in the third quarter," said Nardelli.
"We are staying on strategy by investing in our associates, our
stores and technology as well as returning earnings to our shareholders,"
commented Nardelli. "We ended the third quarter with $5 billion in cash after
spending $2.5 billion for capital expenditures and $890 million for share
repurchases and paying $436 million in dividends through the first nine months
of the year. Our strong financial condition positions us for future reinvestment
and growth."
The Home Depot will conduct a conference call today to discuss
information included in this news release and related matters at 9 a.m. EDT. The
conference call will be available in its entirety through a webcast at
www.homedepot.com, and will be available through replay at the www.homedepot.com
site under the investor relations' section through Tuesday, November 25, 2003.
During the quarter, The Home Depot added 36 new stores. At the end of
the third quarter of fiscal 2003, the company operated a total of 1,643 stores,
including 1,456 Home Depot stores in the United States, 99 Home Depot stores in
Canada, and 17 Home Depot stores in Mexico. The company also operates 54 EXPO
Design Centers, five HD Supply stores, 10 HD Landscape Supply stores, and two
Home Depot Floor Stores. Home Depot stock is publicly traded (NYSE: HD) and is
included in the Dow Jones Industrial Average and the Standard & Poor's 500
Index.
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Statements of The Home Depot's expectations for total sales growth and earnings
performance in this release constitute "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995. Such statements are
based on currently available operating, financial and competitive information
and are subject to various risks and uncertainties that could cause actual
results to differ materially from the company's historical experience and its
present expectations. These risks and uncertainties include, but are not limited
to, fluctuations in and the overall condition of the U.S. economy, stability of
costs and availability of sourcing channels, conditions affecting new store
development, the company's ability to implement new technologies and processes,
the company's ability to attract, train and retain highly-qualified associates,
unanticipated weather conditions, and the impact of competition and regulatory
and litigation matters. Undue reliance should not be placed on such
forward-looking statements, as such statements speak only as of the date on
which they are made. Additional information regarding these and other risks is
contained in the company's periodic filings with the Securities and Exchange
Commission.
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For further information, contact:
Financial Community News Media
Diane Dayhoff Jerry Shields
Vice President of Investor Relations Sr. Public Relations Manager
770-384-2666 770-384-2741
diane_dayhoff@homedepot.com jerry_shields@homedepot.com
THE HOME DEPOT, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND NINE MONTHS ENDED NOVEMBER 2, 2003 AND NOVEMBER 3, 2002
(UNAUDITED)
(AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA AND AS OTHERWISE NOTED)
THREE MONTHS ENDED NINE MONTHS ENDED
11-2-03 11-3-02 11-2-03 11-3-02
-------- -------- -------- --------
NET SALES $ 16,598 $ 14,475 $ 49,691 $ 45,034
COST OF MERCHANDISE SOLD 11,405 9,895 34,064 31,148
-------- -------- -------- --------
GROSS PROFIT 5,193 4,580 15,627 13,886
OPERATING EXPENSES:
Selling and Store Operating 3,072 2,813 9,397 8,368
Pre-Opening 20 19 52 67
General and Administrative 278 252 841 716
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 3,370 3,084 10,290 9,151
-------- -------- -------- --------
OPERATING INCOME 1,823 1,496 5,337 4,735
INTEREST AND INVESTMENT INCOME 14 21 41 63
INTEREST EXPENSE (14) (10) (48) (25)
-------- -------- -------- --------
INTEREST, NET -- 11 (7) 38
-------- -------- -------- --------
EARNINGS BEFORE PROVISION FOR INCOME TAXES 1,823 1,507 5,330 4,773
PROVISION FOR INCOME TAXES 676 567 1,977 1,795
-------- -------- -------- --------
NET EARNINGS $ 1,147 $ 940 $ 3,353 $ 2,978
======== ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES 2,280 2,337 2,289 2,347
BASIC EARNINGS PER SHARE $ 0.50 $ 0.40 $ 1.46 $ 1.27
DILUTED WEIGHTED AVERAGE COMMON SHARES 2,287 2,343 2,295 2,356
DILUTED EARNINGS PER SHARE $ 0.50 $ 0.40 $ 1.46 $ 1.26
SELECTED HIGHLIGHTS THREE MONTHS ENDED NINE MONTHS ENDED
11-2-03 11-3-02 11-2-03 11-3-02
------- ------- ------- -------
Customer Transactions 313 286 959 893
Average Sale per Transaction $52.10 $49.66 $51.30 $50.07
Weighted Avg. Weekly Sales per Store (000's) $ 775 $ 754 $ 796 $ 814
Square Footage - End of Period 176 160 176 160
Capital Expenditures $ 837 $ 681 $2,508 $1,954
Depreciation and Amortization $ 281 $ 231 $ 786 $ 665
THE HOME DEPOT, INC.
CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 2, 2003, NOVEMBER 3, 2002 AND FEBRUARY 2, 2003
(AMOUNTS IN MILLIONS)
11-2-03 11-3-02 2-2-03
------- ------- -------
(UNAUDITED) (UNAUDITED) (AUDITED)
ASSETS
Cash and Cash Equivalents $ 4,944 $ 3,980 $ 2,188
Short-Term Investments 22 13 65
Receivables, net 1,432 1,258 1,072
Merchandise Inventories 9,002 8,314 8,338
Other Current Assets 297 239 254
------- ------- -------
Total Current Assets 15,697 13,804 11,917
Property and Equipment, net 18,876 16,604 17,168
Other Assets 801 939 926
------- ------- -------
TOTAL ASSETS $35,374 $31,347 $30,011
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable $ 6,380 $ 5,435 $ 4,560
Accrued Salaries and Related Expenses 851 891 809
Other Current Liabilities 3,741 2,751 2,666
------- ------- -------
Total Current Liabilities 10,972 9,077 8,035
Long-Term Debt 847 1,316 1,321
Other Long-Term Liabilities 1,294 835 853
------- ------- -------
Total Liabilities 13,113 11,228 10,209
Total Stockholders' Equity 22,261 20,119 19,802
------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $35,374 $31,347 $30,011
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