Home Depot Posts Strong Sales Despite Real Estate Trends
Wednesday, November 14th, 2018
The Home Depot, the world's largest home improvement retailer, reported sales of $26.3 billion for the third quarter of fiscal 2018, a 5.1 percent increase from the third quarter of fiscal 2017. Comparable sales for the third quarter of fiscal 2018 were positive 4.8 percent, and comp sales in the U.S. were positive 5.4 percent.
Net earnings for the third quarter of fiscal 2018 were $2.9 billion, or $2.51 per diluted share, compared with net earnings of $2.2 billion, or $1.84 per diluted share, in the same period of fiscal 2017. For the third quarter of fiscal 2018, diluted earnings per share increased 36.4 percent from the same period in the prior year.
"We are pleased with our third quarter results and the growth that we saw from both our professional and do-it-yourself customers. Our customers continue to respond to our expansive assortment and enhancements we are making to drive an interconnected shopping experience. We saw continued strength across the store, as well as healthy growth in our digital business," said Craig Menear, chairman, CEO and president. "We believe this is a testament to the overall strength of demand in the home improvement market."
Updated Fiscal 2018 Guidance
Based on its year-to-date performance, the Company updated its fiscal 2018 guidance. The Company will have 53 weeks of operating results in fiscal 2018 and now expects:
Sales growth of approximately 7.2 percent;
Comp sales growth of approximately 5.5 percent for the comparable 52-week period;
Operating margin of approximately 14.5 percent;
Tax rate of approximately 24 percent;
Fiscal 2018 share repurchases of approximately $8 billion;
Diluted earnings-per-share growth of approximately 33.8 percent from fiscal 2017 to $9.75.
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 http://ir.homedepot.com/events-and-presentations.
Recent Accounting Pronouncement – Revenue Recognition
During the first quarter of fiscal 2018, the Company adopted ASU No. 2014-09, which pertains to revenue recognition. The adoption of this standard will not materially impact the Company's consolidated financial statements or related disclosures.
The Company has adopted this standard on a modified retrospective basis. In accordance therewith, financial information prior to fiscal 2018 will not be recast. The consolidated statements of earnings and balance sheet for periods and dates subsequent to fiscal 2017 reflect the effect of this accounting policy adoption.
Additional information about the impact of the adoption of ASU No. 2014-09 is available at http://ir.homedepot.com/financial-reports/quarterly-earnings/2018.
At the end of the third quarter, the Company operated a total of 2,286 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 400,000 associates. The Home Depot's stock is traded on the New York Stock Exchange and is included in the Dow Jones industrial average and Standard & Poor's 500 index.