Home Depot(US:HD)2025-05-27 21:48Financial Performance - Net sales for the three months ended May 4, 2025, increased to $39,856 million, up from $36,418 million in the same period last year, representing a growth of 6.7%[20] - Gross profit for the same period was $13,459 million, compared to $12,433 million, reflecting an increase of 8.2%[20] - Operating income for Q1 2025 was $5,133 million, slightly up from $5,079 million in Q1 2024, indicating a growth of 1.1%[20] - Net earnings decreased to $3,433 million from $3,600 million year-over-year, a decline of 4.6%[20] - Basic earnings per share for Q1 2025 was $3.46, down from $3.64 in Q1 2024, a decrease of 4.9%[20] Assets and Liabilities - Total assets increased to $99,157 million as of May 4, 2025, compared to $96,119 million at February 2, 2025, a rise of 3.2%[17] - Total liabilities rose to $91,202 million from $89,479 million, reflecting an increase of 1.9%[17] - Total lease liabilities increased to $12,051 million as of May 4, 2025, compared to $11,928 million as of February 2, 2025[49] - Goodwill increased to $19,568 million as of May 4, 2025, from $19,475 million at the end of the previous quarter, reflecting recent acquisitions[51] Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of the period were $1,369 million, down from $4,264 million at the beginning of the period, a decrease of 67.8%[27] - Net cash provided by operating activities for Q1 2025 was $4,325 million, compared to $5,497 million in Q1 2024, a decline of 21.3%[27] - The company reported capital expenditures of $806 million for the quarter, slightly down from $847 million in the same period last year[27] - Cash flow from operations was $4.3 billion, used to pay $2.3 billion in dividends, repay $1.1 billion of long-term debt, and fund $806 million in capital expenditures[79] - The company plans to invest approximately $4 billion in capital expenditures for fiscal 2025, focusing on customer experience and technology improvements[110] Sales and Revenue Segments - Net sales for the Primary segment increased to $37,287 million for the three months ended May 4, 2025, compared to $36,418 million for the same period in 2024, representing a growth of 2.4%[40] - The cost of sales for the Primary segment was $24,384 million, up from $23,985 million, indicating an increase of 1.7% year-over-year[40] - Operating income for the Primary segment was $5,046 million, slightly down from $5,079 million, reflecting a decrease of 0.6%[40] - Net sales in the U.S. reached $37,224 million, a significant increase from $33,569 million, marking a growth of 10.0%[44] - Net sales from products amounted to $38,512 million, compared to $35,078 million, showing an increase of 6.9%[45] - Online sales represented 15.5% of net sales in Q1 fiscal 2025, increasing by 10.9% compared to Q1 fiscal 2024, with an 8.3% increase on a comparable week basis[92] Shareholder Returns and Stock Activity - The company has approximately $11.7 billion remaining from a $15.0 billion share repurchase authorization as of May 4, 2025[64] - The company purchased a total of 323,001 shares in the first quarter of fiscal 2025 at an average price of $357.69 per share[135] - The Board of Directors approved a $15.0 billion share repurchase authorization in August 2023, which does not have a prescribed expiration date[136] - The company has not resumed share repurchase activity as of May 4, 2025, after pausing in March 2024[136] Operational Metrics - The company's inventory turnover ratio was 4.3 times at the end of the first quarter of fiscal 2025, down from 4.5 times in the same period of fiscal 2024[78] - Comparable sales decreased by 0.3% in fiscal 2025, while customer transactions increased by 2.1% to 394.8 million[87] - Total comparable sales decreased by 0.3% in Q1 fiscal 2025, reflecting a 0.5% decrease in comparable customer transactions[94] Expenses and Profitability - SG&A expenses rose by $863 million, or 12.9%, to $7.5 billion in Q1 fiscal 2025, representing 18.9% of net sales[98] - Gross profit increased by 8.3% to $13.5 billion in Q1 fiscal 2025, with a gross profit margin of 33.8%, down from 34.1% in Q1 fiscal 2024[96] - Diluted earnings per share decreased to $3.45 in Q1 fiscal 2025 from $3.63 in Q1 fiscal 2024, primarily due to lower net earnings[102] Regulatory and Compliance - The company reported approximately $1.5 million in penalties paid to the EPA related to a civil consent decree, with expectations to recoup additional amounts from fines levied against third-party installers[132] - The company expects the civil consent decree with the EPA to be terminated after the stipulated penalties are resolved[132] - The company evaluated its disclosure controls and procedures and concluded they were effective as of May 4, 2025[125] Business Initiatives - The company is undergoing a business transformation initiative, including upgrading accounting and finance systems, with plans to continue migrating additional processes over the next few years[126] - The company completed the acquisition of SRS for $18.0 billion, primarily funded through commercial paper borrowings and long-term debt issuance[72] - The company acquired SRS, a leading residential specialty trade distribution company, in June 2024, which is expected to enhance market presence[39]