Atlanta, GA, May 17--The Home Depot today reported first quarter net earnings of $1.2 billion, $0.57 per diluted share, up 16.3 percent, for the first quarter of fiscal 2005, compared with $1.1 billion, $0.49 per diluted share, for first quarter of fiscal 2004.
Sales for the period increased $1.4 billion, or 8.1 percent to $19 billion. Growth in comparable store sales was 2.1 percent.
"Through the hard work and dedication of our 325,000 associates we effectively managed our business, produced solid earnings growth and stayed on strategy," said Bob Nardelli, chairman, president & CEO. "Our relentless focus on our customers is delivering solid progress in key satisfaction metrics."
During the first quarter, the company increased its annual dividend by 23 percent while the Board of Directors approved an additional $2 billion in share repurchases, bringing the total authorized share repurchases under the plan to $9 billion. During the first quarter, the company repurchased $1.4 billion or 36 million shares. Over the past four years, the company has repurchased $8.1 billion of its outstanding shares.
The company announced its intent to dispose of its interest in the underlying real estate of 15 EXPO Design Center ("EXPO") stores. At some point in the future, these stores will close. Further, the company announced plans to convert five EXPO stores to The Home Depot store format.
In the first quarter of fiscal 2005, the company recorded $86 million of expense related to the anticipated disposition of its interest in the underlying real estate and $20 million of expense related to inventory markdowns. The remaining 34 EXPO stores are profitable and will continue operating. Affected EXPO customers will be served by existing The Home Depot and EXPO stores.
"Excluding the impact of the EXPO announcement, we leveraged expenses in the first quarter, demonstrating our ability to execute," said Carol Tome, executive vice president and CFO. "We continue to deliver strong rates of return on the capital we deploy, with a return on invested capital of 22 percent." At the end of the first quarter, the company reported total assets of $42 billion and total stockholders' equity of $24 billion.
The company reconfirmed its fiscal 2005 sales growth guidance of 9-12 percent and its earnings per share growth guidance of 10-14 percent.
