The world's largest home improvement retailer, The Home Depot Inc. (HD) posted second-quarter 2011 adjusted earnings of 86 cents a share. The adjusted earnings not only surpassed the prior-year quarter’s earnings of 72 cents a share (an increment of 19.4%), but also outpaced the Zacks Consensus Estimate of 82 cents a share.
During the reported quarter, net sales moved up 4.2% to $20,232.0 million compared with $19,410.0 million in the prior-year quarter, and ahead of the Zacks Consensus Estimate of $19,937.0 million. The increase in net sales resulted from a growth of 4.2% in comparable store sales. Comparable store sales in U.S. stores jumped 3.5% during the second quarter.
Operating margin expanded 70 basis points (bps) to 11.3% compared with 10.6% in the prior-year quarter. Improvement in operating margin was primarily driven by effective cost management.
Balance Sheet, Cash Flow and Dividend
Home Depot ended its second-quarter 2011 with cash and cash equivalents of $2,551 million and long-term debt of $10,731 million. During the reported quarter, the company generated $4,487.0 million of cash from operations and deployed $1,251.0 million toward share buyback, $1,014.0 million for debt repayment and $469.0 million as capital expenditures.
Fiscal 2011 Guidance and Zacks Consensus
Home Depot raised its fiscal 2011 adjusted earnings guidance to $2.34 per share from $2.24 forecast earlier on the back of a 2.5% increase in sales. This represents an increase of 16% from the same period last year.
Home Depot, which competes with Lowe's Companies Inc. (LOW) and Target Corporation (TGT), currently has a Zacks #4 Rank, implying a short-term Sell rating on the stock. Besides, the company retains a long-term Neutral recommendation.
HOME DEPOT (HD): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment