EX-99.1 2 hdexhibit99111012020.htm EX-99.1 Document

Exhibit 99.1

The Home Depot Announces Third Quarter Results;
Plans to Invest Approximately $1 Billion in Annualized Permanent Compensation Enhancements for Frontline, Hourly Associates

ATLANTA, November 17, 2020 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $33.5 billion for the third quarter of fiscal 2020, an increase of $6.3 billion, or 23.2 percent from the third quarter of fiscal 2019. Comparable sales for the third quarter of fiscal 2020 were positive 24.1 percent, and comparable sales in the U.S. were positive 24.6 percent.

Net earnings for the third quarter of fiscal 2020 were $3.4 billion, or $3.18 per diluted share, compared with net earnings of $2.8 billion, or $2.53 per diluted share, in the same period of fiscal 2019. For the third quarter of fiscal 2020, diluted earnings per share increased 25.7 percent from the same period in the prior year.

“The third quarter was another exceptional quarter for The Home Depot as we saw the continuation of outsized demand for home improvement projects, which has led to sales growth of more than $15 billion through the first nine months of the year,” said Craig Menear, chairman and CEO. “Our ability to effectively adapt to this high-demand environment is a testament to both the investments we have made in the business as well as our associates’ focus on customers. We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment. I am proud of the resilience and strength our associates have continued to demonstrate, and I would like to thank them and our supplier partners,” said Menear.

Investment in Associates

Throughout the COVID-19 pandemic, The Home Depot has taken significant actions to support associates, including expanded paid time off for all hourly associates to use at their discretion and the implementation of a temporary weekly bonus program. The Company is now transitioning from these temporary programs to invest in permanent compensation enhancements for frontline, hourly associates. This will result in approximately $1 billion of incremental compensation on an annualized basis.

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 ir.homedepot.com/events-and-presentations.

At the end of the third quarter, the Company operated a total of 2,295 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 and other governmental 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 our Quarterly Report on Form 10-Q for the fiscal quarter ended August 2, 2020.

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.

For more information, contact:
Financial Community News Media
Isabel Janci Stephen Holmes
Vice President of Investor Relations and Treasurer Vice President of Corporate Communications
770-384-2666 770-384-5075

 Three Months EndedNine Months Ended
in millions, except per share dataNovember 1,
November 3,
% ChangeNovember 1,
November 3,
% Change
Net sales$33,536 $27,223 23.2 %$99,849 $84,443 18.2 %
Cost of sales22,080 17,836 23.8 65,827 55,607 18.4 
Gross profit11,456 9,387 22.0 34,022 28,836 18.0 
Operating expenses:
Selling, general and administrative6,076 4,942 22.9 18,260 14,926 22.3 
Depreciation and amortization528 498 6.0 1,567 1,470 6.6 
Total operating expenses6,604 5,440 21.4 19,827 16,396 20.9 
Operating income4,852 3,947 22.9 14,195 12,440 14.1 
Interest and other (income) expense:
Interest and investment income(11)(22)(50.0)(37)(56)(33.9)
Interest expense340 302 12.6 1,010 892 13.2 
Interest and other, net329 280 17.5 973 836 16.4 
Earnings before provision for income taxes
4,523 3,667 23.3 13,222 11,604 13.9 
Provision for income taxes1,091 898 21.5 3,213 2,843 13.0 
Net earnings$3,432 $2,769 23.9 %$10,009 $8,761 14.2 %
Basic weighted average common shares1,073 1,089 (1.5)%1,074 1,096 (2.0)%
Basic earnings per share$3.20 $2.54 26.0 $9.32 $7.99 16.6 
Diluted weighted average common shares1,078 1,094 (1.5)%1,078 1,100 (2.0)%
Diluted earnings per share$3.18 $2.53 25.7 $9.28 $7.96 16.6 
Three Months EndedNine Months Ended
Selected Sales Data (1)
November 1,
November 3,
% ChangeNovember 1,
November 3,
% Change
Customer transactions (in millions)453.2 400.9 13.0 %1,339.5 1,246.4 7.5 %
Average ticket $72.98 $66.36 10.0 $73.90 $67.00 10.3 
Sales per retail square foot
$552.85 $449.17 23.1 $549.26 $464.68 18.2 
(1)Selected Sales Data does not include results for the legacy Interline Brands business, now operating as a part of The Home Depot Pro.


in millionsNovember 1,
November 3,
February 2,
Current assets:
Cash and cash equivalents$14,652 $2,193 $2,133 
Receivables, net2,666 2,231 2,106 
Merchandise inventories16,155 15,711 14,531 
Other current assets1,032 1,039 1,040 
Total current assets34,505 21,174 19,810 
Net property and equipment23,848 22,472 22,770 
Operating lease right-of-use assets5,433 5,638 5,595 
Goodwill2,236 2,253 2,254 
Other assets897 772 807 
Total assets$66,919 $52,309 $51,236 
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt$— $695 $974 
Accounts payable12,899 9,240 7,787 
Accrued salaries and related expenses2,176 1,467 1,494 
Current installments of long-term debt2,491 1,818 1,839 
Current operating lease liabilities842 828 828 
Other current liabilities6,987 5,517 5,453 
Total current liabilities25,395 19,565 18,375 
Long-term debt, excluding current installments32,831 26,597 28,670 
Long-term operating lease liabilities4,880 5,113 5,066 
Other liabilities2,278 2,116 2,241 
Total liabilities65,384 53,391 54,352 
Total stockholders’ equity (deficit)1,535 (1,082)(3,116)
Total liabilities and stockholders’ equity$66,919 $52,309 $51,236 

 Nine Months Ended
in millionsNovember 1,
November 3,
Cash Flows from Operating Activities:
Net earnings$10,009 $8,761 
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization1,853 1,701 
Stock-based compensation expense234 197 
Changes in working capital5,348 (37)
Changes in deferred income taxes(86)107 
Other operating activities57 64 
Net cash provided by operating activities17,415 10,793 
Cash Flows from Investing Activities:
Capital expenditures(1,503)(1,891)
Proceeds from sales of property and equipment55 21 
Other investing activities(3)(10)
Net cash used in investing activities(1,451)(1,880)
Cash Flows from Financing Activities:
Repayments of short-term debt, net(974)(644)
Proceeds from long-term debt, net of discounts and premiums4,960 1,404 
Repayments of long-term debt(1,836)(1,046)
Repurchases of common stock(791)(3,909)
Proceeds from sales of common stock185 185 
Cash dividends(4,837)(4,477)
Other financing activities(132)(120)
Net cash used in financing activities(3,425)(8,607)
Change in cash and cash equivalents12,539 306 
Effect of exchange rate changes on cash and cash equivalents(20)109 
Cash and cash equivalents at beginning of period2,133 1,778 
Cash and cash equivalents at end of period$14,652 $2,193 
Note: Effective February 3, 2020, we reclassified cash flows relating to book overdrafts from financing to operating activities for all periods presented on the Condensed Consolidated Statements of Cash Flows. The amounts of these reclassifications were not material.