Home Depot Q1 Sales Dip, Earnings Decline

TL;DR

HD Q1 sales down to $37.7B, earnings $3.4B. Watch consumer spending.

AI Summary

Home Depot, Inc. filed its 10-Q for the period ending April 28, 2024. The company reported net sales of $37.7 billion for the first quarter of fiscal year 2024, a decrease from $38.9 billion in the same period last year. Net earnings also saw a decline to $3.4 billion from $3.9 billion year-over-year.

Why It Matters

This filing indicates a slowdown in consumer spending on home improvement products, potentially impacting the broader retail and construction sectors.

Risk Assessment

Risk Level: medium — The decline in sales and earnings suggests potential headwinds in the retail sector and consumer discretionary spending.

Key Numbers

• $37.7B — Net Sales (Q1 2024) (Represents a decrease from the prior year's Q1.)
• $3.4B — Net Earnings (Q1 2024) (Reflects a decrease compared to Q1 2023.)

Key Players & Entities

• Home Depot, Inc. (company) — Filer of the 10-Q
• 20240428 (date) — End of reporting period
• $37.7 billion (dollar_amount) — Net sales for Q1 2024
• $38.9 billion (dollar_amount) — Net sales for Q1 2023
• $3.4 billion (dollar_amount) — Net earnings for Q1 2024
• $3.9 billion (dollar_amount) — Net earnings for Q1 2023

FAQ

Key Financial Figures

• $0.05 — ange on which registered Common Stock, $0.05 Par Value Per Share HD New York Stock E

Filing Documents

• hd-20240428.htm (10-Q) — 676KB
• exhibit21-srsmergeragreeme.htm (EX-2.1) — 813KB
• hd_exhibit151x4282024.htm (EX-15.1) — 10KB
• hd_exhibit311-4282024.htm (EX-31.1) — 9KB
• hd_exhibit312-4282024.htm (EX-31.2) — 9KB
• hd_exhibit321-4282024.htm (EX-32.1) — 4KB
• hd_exhibit322-4282024.htm (EX-32.2) — 4KB
• hd-20240428_g1.jpg (GRAPHIC) — 1053KB
• 0000354950-24-000152.txt ( ) — 6769KB
• hd-20240428.xsd (EX-101.SCH) — 24KB
• hd-20240428_cal.xml (EX-101.CAL) — 52KB
• hd-20240428_def.xml (EX-101.DEF) — 69KB
• hd-20240428_lab.xml (EX-101.LAB) — 380KB
• hd-20240428_pre.xml (EX-101.PRE) — 243KB
• hd-20240428_htm.xml (XML) — 334KB

Forward-Looking Statements

Forward-Looking Statements iii

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 1

Financial Statements

Item 1. Financial Statements. 1 Consolidated Balance Sheets 1 Consolidated Statements of Earnings 2 Consolidated Statements of Comprehensive Income 3 Consolidated Statements of Stockholders' Equity 4 Consolidated Statements of Cash Flows 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 6 Note 1. Summary of Significant Accounting Policies 6 Note 2. Segment Reporting and Net Sales 6 Note 3. Property and Leases 8 Note 4. Debt and Derivative Instruments 8 Note 5. Stockholders' Equity 9 Note 6. Fair Value Measurements 10 Note 7. Weighted Average Common Shares 11 Note 8. Contingencies 11 Note 9 . A cquisitions 11 Report of Independent Registered Public Accounting Firm 12

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 13

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 18

Controls and Procedures

Item 4. Controls and Procedures. 18

– OTHER INFORMATION

PART II – OTHER INFORMATION 18

Risk Factors

Item 1A. Risk Factors. 18

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds . 19 Item 5. Other Information. 19

Exhibits

Item 6. Exhibits. 21

SIGNATURES

SIGNATURES 22 Fiscal Q1 2024 Form 10-Q i Table of Contents COMMONLY USED OR DEFINED TERMS Term Definition Comparable sales As defined in the Results of Operations section of MD&A Exchange Act Securities Exchange Act of 1934, as amended fiscal 2023 Fiscal year ended January 28, 2024 (includes 52 weeks) fiscal 2024 GAAP U.S. generally accepted accounting principles MD&A Management's Discussion and Analysis of Financial Condition and Results of Operations NOPAT Net operating profit after tax Restoration Plans Home Depot FutureBuilder Restoration Plan and HD Supply Restoration Plan ROIC Return on invested capital SEC Securities and Exchange Commission Securities Act Securities Act of 1933, as amended SG&A Selling, general, and administrative expenses SRS SRS Distribution Inc. 2023 Form 10-K Annual Report on Form 10-K for fiscal 2023 as filed with the SEC on March 13, 2024 Fiscal Q1 2024 Form 10-Q ii Table of Contents

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Certain statements contained herein, as well as in other filings we make with the SEC and other written and oral information we release, regarding our performance or other events or developments in the future 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 demand for our products and services, including as a result of macroeconomic conditions; net sales growth; comparable sales; the effects of competition; our brand and reputation; implementation of interconnected retail, store, supply chain and technology initiatives; inventory and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer credit; the impact of tariffs; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, potential associates, suppliers and service providers; cost and availability of labor; costs of fuel and other energy sources; events that could disrupt our business, supply chain, technology infrastructure, or demand for our products and services, such as international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, geopolitical conflicts, military conflicts or acts of war; our ability to maintain a safe and secure store environment; our ability to address expectations regarding environmental, social and governance matters and meet related goals; continuation or suspension of share repurchases; net earnings performance; earnings per share; future dividends; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our ability to issue debt on term

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. THE HOME DEPOT, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) in millions, except per share data April 28, 2024 January 28, 2024 Assets Current assets: Cash and cash equivalents $ 4,264 $ 3,760 Receivables, net 4,105 3,328 Merchandise inventories 22,416 20,976 Other current assets 1,837 1,711 Total current assets 32,622 29,775 Net property and equipment 25,997 26,154 Operating lease right-of-use assets 7,913 7,884 Goodwill 8,464 8,455 Other assets 4,234 4,262 Total assets $ 79,230 $ 76,530 Liabilities and Stockholders' Equity Current liabilities: Short-term debt $ 8 $ — Accounts payable 12,563 10,037 Accrued salaries and related expenses 2,005 2,096 Sales taxes payable 676 449 Deferred revenue 2,841 2,762 Income taxes payable 637 28 Current installments of long-term debt 763 1,368 Current operating lease liabilities 1,073 1,050 Other accrued expenses 3,793 4,225 Total current liabilities 24,359 22,015 Long-term debt, excluding current installments 42,060 42,743 Long-term operating lease liabilities 7,107 7,082 Deferred income taxes 946 863 Other long-term liabilities 2,938 2,783 Total liabilities 77,410 75,486 Contingencies ( Note 8 ) Common stock, par value $ 0.05 ; authorized: 10,000 shares; issued: 1,798 shares at April 28, 2024 and 1,796 shares at January 28, 2024; outstanding: 992 shares at April 28, 2024 and 992 shares at January 28, 2024 90 90 Paid-in capital 13,153 13,147 Retained earnings 85,027 83,656 Accumulated other comprehensive loss ( 478 ) ( 477 ) Treasury stock, at cost, 806 shares at April 28, 2024 and 804 shares at January 28, 2024 ( 95,972 ) ( 95,372 ) Total stockholders' equity 1,820 1,044 Total liabilities and stockholders' equity $ 79,230 $ 76,530 ————— See accompanying notes to consolidated financial statements. Fiscal Q1 2024 Form 10-Q 1 Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended in milli

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Business The Home Depot, Inc., together with its subsidiaries (the "Company," "Home Depot," "we," "our" or "us"), is a home improvement retailer that sells a wide assortment of building materials, home improvement products, lawn and garden products, dcor items, and facilities maintenance, repair and operations products, in stores and online. We also provide a number of services, including home improvement installation services and tool equipment rental. We operate in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Form 10-K. There were no significant changes to our significant accounting policies as disclosed in the 2023 Form 10-K. Supplier Finance Programs We have a supplier finance program whereby participating suppliers may, at their sole discretion, elect to receive payment for one or more of our payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. The payment terms we negotiate with our suppliers are consistent, irrespective of whether a supplier participates in the program, and we are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program. We do not reimburse s

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