Atlanta, GA, November 15, 2005--Home Depot in the third quarter reported net earnings that rose 17 percent to $1.5 billion, $0.72 per diluted share.
Analyst’s were expected the company to earn $0.68 cents in the quarter.
Sales for the period increased $2.0 billion, or 10.5 percent, to $20.7 billion. Growth in comparable store sales was 3.6 percent.
The company lifted its fiscal 2005 sales growth guidance from 9-12 percent to 10-12 percent and increased its earnings per share growth guidance from 14- 17 percent to 17-18 percent.
"The execution of our strategy and the focus on our fundamentals has enabled us to consistently and predictably deliver strong results," said Bob Nardelli, chairman, president & CEO. "We have stayed on strategy, effectively managed our business and produced solid earnings growth through the hard work and dedication of our 325,000 associates."
"We continued to drive productivity throughout our business, and are well on our way to becoming the low cost provider in our industry. During the quarter we continued to use our strong financial condition to invest in the business and return cash to our shareholders," said Carol Tome, executive vice president and CFO. At the end of the third quarter, the company reported total assets of $44.7 billion, total stockholders' equity of $25.8 billion and return on invested capital of 21.8 percent. In the third quarter, the company repurchased $868 million or 21.8 million shares under its share repurchase program. Since the inception of its share repurchase program, the company has repurchased $9.5 billion or 272 million shares under its $11 billion authorization. The company has repurchased about 12 percent of its outstanding shares since 2002.
By broadening its assortment and adding new, innovative and distinctive merchandise that provides tremendous customer value, The Home Depot achieved a record average ticket of $58.92, representing an increase of 6.1 percent compared to the third quarter of last year.
Tom Taylor, executive vice president, Merchandising and Marketing said, "The active hurricane season during the quarter showcased our merchandising and operational flexibility. We took extraordinary steps to take care of our communities, customers and associates and we were the first retailer to deliver emergency-type merchandise to the affected areas. By the end of the quarter, we directed over 4,000 truckloads of merchandise to the Gulf Coast and Florida regions," added Taylor.
The company continued to invest in its stores through technology initiatives focused on increasing operational efficiency and improving the customer shopping experience. During the third quarter, the company achieved the following accomplishments:
- Completed the rollout of back-end scanned receiving to all US and
Canadian stores
- Commenced vendor authorization for certified receiving
- Grew centralized auto replenishment to 11 percent of store sales
- Implemented a special order flooring services pilot in 146 stores
- Continued installation of self-checkout registers, now in 1,205 stores
- Implemented new core financial systems in Mexico
During the quarter, the company opened 37 new stores across Canada, Mexico and the United States, bringing the total store count to 1,972 as of the end of the quarter. In the fourth quarter, the company will open its 2,000th store, including its 50th store in Mexico, which opened last week. The Home Depot is the number one home improvement retailer in the United States, Canada and Mexico.
The company's services business grew 21 percent to $1.2 billion during the third quarter. The Home Depot saw strong growth in installation categories such as HVAC, kitchens, countertops, windows and roofing/gutters.
During the third quarter, The Home Depot Supply reported strong double-digit sales growth through organic and inorganic expansion.
