The Home Depot Announces First Quarter Results; Supports Associates with Approximately $850 Million of Expanded Benefits; Suspends 2020 Business Outlook; Declares Quarterly Dividend of $1.50 Per Share

ATLANTA, May 19, 2020 /PRNewswire/ -- The Home Depot(®), the world's largest home improvement retailer, today reported sales of $28.3 billion for the first quarter of fiscal 2020, a 7.1 percent increase from the first quarter of fiscal 2019. Comparable sales for the first quarter of fiscal 2020 were positive 6.4 percent, and comparable sales in the U.S. were positive 7.5 percent.

"As the COVID-19 pandemic evolved, we anchored to the core values of our Company by focusing on two key priorities: working to ensure the safety and well-being of our associates and customers, and providing our customers and communities with essential products. We took early and decisive action to intentionally limit customer traffic in our stores which we believe had a significant impact to sales in many markets," said Craig Menear, chairman, CEO, and president. "Even with these actions, the robust and flexible interconnected infrastructure that we have invested in for over a decade allowed us to quickly adapt to changing customer preferences and achieve strong sales performance in the quarter."

In support of these two objectives, the Company took several actions to prioritize safety and enhance associate benefits. To promote a safe environment for associates and customers, the Company implemented a number of operational changes in mid-March, including closing stores earlier to allow more time for sanitation and replenishing of essential products, limiting customer traffic in stores, and canceling traffic-driving events such as Spring Black Friday.

To support its associates during the COVID-19 pandemic, the Company took the following actions:

    --  Expanded paid time off for all hourly associates with additional hours
        that can be used at their discretion and will be paid out at year-end if
        not used;
    --  Provided additional paid time off for associates who are 65 and older or
        deemed to be at higher risk according to CDC guidelines;
    --  Provided weekly bonuses for hourly associates in our stores and
        distribution centers, and doubled overtime pay; and
    --  Extended dependent care benefits and waived related co-pays.

As a result of the actions taken to support our associates, the Company incurred a total of approximately $850 million of pre-tax expense, or approximately $640 million after tax, equaling $0.60 per diluted share.

Net earnings for the first quarter of fiscal 2020 were $2.2 billion, or $2.08 per diluted share, compared with net earnings of $2.5 billion, or $2.27 per diluted share, in the same period of fiscal 2019. For the first quarter of fiscal 2020, diluted earnings per share decreased 8.4 percent from the same period in the prior year.

"I want to thank our associates and express how grateful and proud I am of the resilience and strength that our teams have demonstrated as we navigate these extraordinary circumstances together," said Menear.

Fiscal 2020 Guidance

While sales trends were strong at the end of the first quarter and into the first two weeks of the second quarter, as a result of the uncertainty related to the duration of COVID-19 and its impact on the broader economy, the Company is suspending its previously communicated fiscal 2020 guidance.

Dividend Declaration

The Company today announced that its board of directors declared a first quarter cash dividend of $1.50 per share. The dividend is payable on June 18, 2020, to shareholders of record on the close of business on June 4, 2020. This is the 133(rd) consecutive quarter the Company has paid a cash dividend.

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

At the end of the first quarter, the Company operated a total of 2,293 retail stores in all 50 states, the District of Columbia, Puerto Rico, the 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 (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index.

Certain statements contained herein constitute "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 on our business, operations and financial results of the COVID-19 pandemic (which, among other things, may affect many of the items listed below); the demand for our products and services; net sales growth; comparable sales; effects of competition; implementation of store, interconnected retail, supply chain and technology initiatives; inventory and in-stock positions; state of the economy; state of the housing and home improvement markets; 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, suppliers and vendors; international trade disputes, natural disasters, public health issues (including pandemics and related quarantines, shelter-in-place orders, and similar restrictions), and other business interruptions that could disrupt supply or delivery of, or demand for, the Company's products or services; continuation of share repurchase programs; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims and litigation; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes; store openings and closures; guidance for fiscal 2020 and beyond; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and 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 are currently unknown to us - as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended February 2, 2020 and in our subsequent Quarterly Reports on Form 10-Q.

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 Securities and Exchange Commission.

              THE HOME DEPOT, INC.



                                                                                                                                    Three Months Ended

                in millions, except per share data                                                  May 3,                                          May 5,         % Change
                                                                                                                      2020                                             2019

       Net sales                                                                                                            $
            28,260                                               $
       26,381           7.1

       Cost of sales                                                                                               18,635                                                  17,364                         7.3

       Gross profit                                                                                                 9,625                                                   9,017                         6.7

       Operating expenses:

       Selling, general and administrative                                                                          5,829                                                   4,940                        18.0

       Depreciation and amortization                                                                                  520                                                     480                         8.3

         Total operating expenses                                                                                   6,349                                                   5,420                        17.1

       Operating income                                                                                             3,276                                                   3,597                       (8.9)

       Interest and other (income) expense:

       Interest and investment income                                                                                (17)                                                   (15)                       13.3

       Interest expense                                                                                               324                                                     288                        12.5

         Interest and other, net                                                                                      307                                                     273                        12.5

       Earnings before provision for income taxes                                                                   2,969                                                   3,324                      (10.7)

       Provision for income taxes                                                                                     724                                                     811                      (10.7)

       Net earnings                                                                                                          $
            2,245                                                $
       2,513        (10.7)

       Basic weighted average common shares                                                                         1,073                                                   1,101                       (2.5)

       Basic earnings per share                                                                                               $
            2.09                                                 $
       2.28         (8.3)

       Diluted weighted average common shares                                                                       1,077                                                   1,106                       (2.6)

       Diluted earnings per share                                                                                             $
            2.08                                                 $
       2.27         (8.4)

                                                                                                                                    Three Months Ended

                Selected Sales Data
               (1)                                       May 3,                                          May 5,         % Change
                                                                                                                      2020                                             2019


       Customer transactions (in millions)                                                                          374.8                                                   390.0                       (3.9)

       Average ticket                                                                                                        $
            74.70                                                $
       67.31          11.0

       Sales per retail square foot                                                                                         $
            466.58                                               $
       435.18           7.2

              Selected Sales Data does not include results for the legacy Interline Brands business, now operating as a part of The Home Depot Pro.

                THE HOME DEPOT, INC.



                  in millions                  May 3,                                            May 5,           February 2,
                                                                 2020                                               2019                   2020


     Current assets:

     Cash and cash equivalents                                         $
              8,696                                                        $
       1,882            $

     Receivables, net                                          2,610                                                       2,317                               2,106

     Merchandise inventories                                  14,989                                                      15,495                              14,531

     Other current assets                                        982                                                         859                               1,040

     Total current assets                                     27,277                                                      20,553                              19,810

     Net property and equipment                               22,697                                                      22,270                              22,770

     Operating lease right-of-use assets                       5,634                                                       5,629                               5,595

     Goodwill                                                  2,220                                                       2,250                               2,254

     Other assets                                                909                                                         813                                 807

     Total assets                                                     $
              58,737                                                       $
       51,515           $

                Liabilities and Stockholders' Equity

     Current liabilities:

     Short-term debt                                     
             $                                                                             $
       372              $

     Accounts payable                                         10,056                                                      10,311                               7,787

     Accrued salaries and related expenses                     1,974                                                       1,418                               1,494

     Current installments of long-term debt                    4,200                                                       1,084                               1,839

     Current operating lease liabilities                         853                                                         793                                 828

     Other current liabilities                                 6,265                                                       5,695                               5,453

     Total current liabilities                                23,348                                                      19,673                              18,375

     Long-term debt, excluding current installments           31,622                                                      26,804                              28,670

     Long-term operating lease liabilities                     5,075                                                       5,145                               5,066

     Other liabilities                                         2,182                                                       2,036                               2,241

     Total liabilities                                        62,227                                                      53,658                              54,352

     Total stockholders' (deficit) equity                    (3,490)                                                    (2,143)                            (3,116)

     Total liabilities and stockholders' equity                       $
              58,737                                                       $
       51,515           $

                THE HOME DEPOT, INC.



                                                                                                                                                                                                     Three Months Ended

                  in millions                                                                                                                                     May 3,                                               May 5,
                                                                                                                                                                                    2020                                                  2019

                Cash Flows from Operating Activities:

     Net earnings                                                                                                                                                                         $
              2,245                                            $

     Reconciliation of net earnings to net cash provided by operating activities:

     Depreciation and amortization                                                                                                                                                  607                                                            547

     Stock-based compensation expense                                                                                                                                                88                                                             86

     Changes in working capital                                                                                                                                                   2,834                                                          1,471

     Changes in deferred income taxes                                                                                                                                              (68)                                                             5

     Other operating activities                                                                                                                                                      31                                                             91

       Net cash provided by operating activities                                                                                                                                  5,737                                                          4,713

                Cash Flows from Investing Activities:

     Capital expenditures                                                                                                                                                         (586)                                                         (681)

     Proceeds from sales of property and equipment                                                                                                                                    8                                                              6

     Other investing activities                                                                                                                                                       -                                                          (13)

       Net cash used in investing activities                                                                                                                                      (578)                                                         (688)

                Cash Flows from Financing Activities:

     Repayments of short-term debt, net                                                                                                                                           (974)                                                         (967)

     Proceeds from long-term debt, net of discounts and premiums                                                                                                                  4,960

     Repayments of long-term debt                                                                                                                                                  (27)                                                          (15)

     Repurchases of common stock                                                                                                                                                  (791)                                                       (1,368)

     Proceeds from sales of common stock                                                                                                                                             18                                                             34

     Cash dividends                                                                                                                                                             (1,611)                                                       (1,499)

     Other financing activities                                                                                                                                                   (125)                                                          (98)

       Net cash provided by (used in) financing activities                                                                                                                        1,450                                                        (3,913)

     Change in cash and cash equivalents                                                                                                                                          6,609                                                            112

     Effect of exchange rate changes on cash and cash equivalents                                                                                                                  (46)                                                           (8)

     Cash and cash equivalents at beginning of period                                                                                                                             2,133                                                          1,778

       Cash and cash equivalents at end of period                                                                                                                                         $
              8,696                                            $

                   Note: Effective February 3, 2020, we reclassified cash flows relating to book overdrafts from financing to operating activities for all periods presented on the Consolidated Statement of Cash Flows. The amounts of these
                    reclassifications were not material.

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SOURCE The Home Depot