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Home Depot Q1 2024 – $36.4B Net Sales, $3.6B Earnings

Home Depot's latest 10-Q report for the first quarter of fiscal 2024 shows a net sales figure of $36.4 billion, representing a 2.3% decrease from the first quarter of fiscal 2023. The company reported net earnings of $3.6 billion, or $3.63 per diluted share. The report also highlights the opening of two new stores in the U.S., bringing the total store count to 2,337 as of April 28, 2024, with 13.7% of stores located in Canada and Mexico.

The company's inventory turnover ratio increased to 4.5 times at the end of the first quarter of fiscal 2024, compared to 3.9 times at the end of the first quarter of fiscal 2023, driven by lower average inventory levels during the first quarter of fiscal 2024.

Home Depot generated $5.5 billion of cash flow from operations during the first three months of fiscal 2024. The cash flow, combined with cash on hand, was used to fund cash payments of $2.2 billion for dividends and repay $1.2 billion of long-term debt. The company also funded $847 million in capital expenditures and $649 million for share repurchases before pausing share repurchases in March 2024 due to the pending acquisition of SRS.

The company's ROIC for the trailing twelve-month period was 37.1% at the end of the first quarter of fiscal 2024, compared to 43.6% at the end of the first quarter of fiscal 2023. The decrease in ROIC was primarily driven by lower operating income and an increase in average equity as a result of pausing share repurchases in March 2024.

The report also discusses the pending acquisition of SRS, a leading residential specialty trade distribution company, for an aggregate consideration of $18.25 billion. The acquisition is expected to be completed by the end of fiscal 2024 and is anticipated to be funded through a combination of cash on hand, borrowings under the commercial paper program, and the issuance of long-term debt.

In terms of financial performance, the report states that net sales for the first quarter of fiscal 2024 decreased by 2.3% compared to the same period in fiscal 2023. Online sales represented 15.3% of net sales during the first quarter of fiscal 2024 and increased by 3.3% compared to the first quarter of fiscal 2023.

Comparable sales for the first quarter of fiscal 2024 decreased by 2.8%, reflecting a 1.5% decrease in comparable customer transactions and a 1.3% decrease in comparable average ticket compared to the first quarter of fiscal 2023.

The report also provides a breakdown of gross profit, operating expenses, interest and other income, provision for income taxes, and diluted earnings per share for the first quarter of fiscal 2024 compared to the same period in fiscal 2023.

Additionally, the report discusses non-GAAP financial measures, including Return on Invested Capital (ROIC), and provides details on liquidity and capital resources, capital expenditures, and dividends. Home Depot plans to invest approximately $3.0 billion to $3.5 billion back into its business in the form of capital expenditures for fiscal 2024.

As a result of these announcements, the company's shares have moved -1.1% on the market, and are now trading at a price of $334.09. Check out the company's full 10-Q submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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