Home Depot Beats Q3 Earnings Estimates, Retains Outlook(ZZ)

小呵呵

Referred by Zacks.com
Zacks By Zacks Equity Research

Driven by strong performance across all geographies due to a rise in transactions and strength in its core store activities, The Home Depot Inc. (HD) reported an improvement in its financial results for the third quarter of fiscal 2014. The company’s adjusted earnings of $1.15 per share jumped nearly 21.1% from the year-ago quarter’s earnings of 95 cents and surpassed the Zacks Consensus Estimate of $1.13.


The Home Depot Inc - Earnings Surprise
Quarterly Details

Net sales increased 5.4% to $20,516 million from $19,470 million in the year-ago quarter and beat the Zacks Consensus Estimate of $20,418 million. The company’s overall comparable-store sales (comps) increased 5.2% while comps in the U.S. stores grew 5.8%. The year-over-year improvement in top-line was mainly attributable to a 3.2% rise in the number of customer transactions and an increase of 2.3% in average ticket size.

Gross profit grew 5.7% to $7,185 million from $6,798 million in the comparable year-ago quarter, primarily due to higher sales. Gross profit margin expanded 10 basis points, compared with last year, to 35%.

Operating profit during the quarter improved 11.3% to $2,553 million from $2,293 million in the year-ago comparable quarter. Operating margin expanded 60 basis points (bps) to 12.4% from 11.8% in the year-ago quarter. The improvement in operating margin was driven by effective cost management.

Balance Sheet and Cash Flow

Home Depot, which competes with Lowe’s Companies Inc. (LOW), ended the quarter with cash and cash equivalents of $2,181 million, long-term debt (excluding current maturities) of $16,693 million and shareholders’ equity of $10,110 million. During the first three quarters of fiscal 2014, the company generated $6,247 million of cash from operations and deployed its available funds for buying back shares worth $5.6 billion, dividend payment of $1.9 billion, capital expenditures of nearly $1 billion and long-term debt repayment of $30 million.

Fiscal 2014 Outlook

After concluding the third quarter, Home Depot reaffirmed its sales growth outlook of 4.8% for fiscal 2014. The company now expects diluted earnings per share growth of 21% for fiscal 2014 with earnings of $4.54 per share.

Further, management revealed that the company’s earnings guidance includes a benefit of the company’s year-to-date share buybacks worth $5.74 billion as well as an estimated $34 million for breach-related costs. Moreover, the company intends to repurchase another $1.26 billion worth of shares during the fourth quarter.

小呵呵