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August 20, 2015
By: Catherine Diamon
The Home Depot reported sales of $24.8 billion for the second quarter of fiscal 2015, a 4.3 percent increase from the second quarter of fiscal 2014. Comparable store sales for the second quarter of fiscal 2015 were positive 4.2 percent, and comp sales for U.S. stores were positive 5.7 percent. Net earnings for the second quarter of fiscal 2015 were $2.2 billion, or $1.73 per diluted share, compared with net earnings of $2.1 billion, or $1.52 per diluted share, in the same period of fiscal 2014. For the second quarter of fiscal 2015, diluted earnings per share increased 13.8 percent from the same period in the prior year. Second quarter of fiscal 2015 results include a pretax net expense of $92 million, or $0.05 per diluted share, related to the Company’s 2014 data breach. This expense includes an accrual for estimated probable losses that the Company expects to incur in connection with the claims made by the payment card networks. Second quarter of fiscal 2015 results also reflect a pretax gain on sale of $144 million, or $0.07 per diluted share, related to the sale of the remaining portion of the Company’s equity ownership in HD Supply Holdings, Inc. Adjusting for these two items, diluted earnings per share for the second quarter of fiscal 2015 were $1.71. “We were pleased with this quarter’s results. We saw balanced growth across our business resulting from strength in the core of the store as well as the continued recovery of the U.S. housing market,” said Craig Menear, chairman, CEO and president. “I would like to thank our associates for their hard work and dedication.” The Company has provided a range of sales, comp sales and diluted earnings-per-share growth to reflect the difference between 2014 average exchange rates and current exchange rates. The low-end of the Company’s sales, comp sales and diluted earnings-per-share growth guidance reflects the U.S. dollar remaining at current foreign exchange rates. Based on its year-to-date performance and to reflect the planned completion of the acquisition of Interline Brands, Inc., the Company raised its fiscal 2015 sales guidance and now expects sales will grow in a range of approximately 5.2 percent to 6.0 percent and comp sales will grow in a range of approximately 4.1 percent to 4.9 percent. The Company also raised its diluted earnings-per-share guidance for the year and now expects diluted earnings per share to grow in a range of approximately 13 percent to 14 percent from fiscal 2014 to $5.31 to $5.36. The Company’s earnings-per-share guidance reflects the benefit of the Company’s year-to-date share repurchases of $3.1 billion and the Company’s intent to repurchase an additional $3.9 billion of shares during the remainder of the year for a total of $7.0 billion. The Company’s estimated probable losses related to the claims made by the payment card networks in connection with the data breach discovered in September 2014 are based on currently available information and expected payments associated with those claims. These estimates may change as new information becomes available or circumstances change. The accrual does not reflect liabilities from current and future civil litigation, governmental investigations and enforcement proceedings, which may have an adverse effect on the Company’s financial results in a future period. The accrual also does not reflect future breach-related legal, consulting or administrative fees, which are expensed as incurred and not expected to be material in any individual period. The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at earnings.homedepot.com. At the end of the second quarter, the Company operated a total of 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs more than 300,000 associates.
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