[ACCESSWIRE]
Upcoming AWS Coverage on Lowe's Companies Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 9, 2017 / Active Wall St. announces its post-earnings coverage on The Home Depot, Inc. (NYSE: HD). The Company reported its fourth quarter and fiscal 2016 financial results on February 21, 2017. The world's largest home improvement retailer surpassed top- and bottom-line expectations and also announced a 29% increase in dividend. Register with us now for your free membership at:
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One of Home Depot's competitors within the Home Improvement Stores space, Lowe's Companies, Inc. (NYSE: LOW), announced on February 22, 2017, that it will conduct its Q4 2016 earnings conference call webcast on Wednesday, March 01, 2017, at 9:00 a.m. ET. AWS will be initiating a research report on Lowe's Cos. in the coming days.
Today, AWS is promoting its earnings coverage on HD; touching on LOW. Get our free coverage by signing up to:
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Earnings Reviewed
Home Depot reported sales of $22.2 billion for the fourth quarter of fiscal 2016 ended January 29, 2017, which was a 5.8% increase from Q4 2015. Foreign currency rates, primarily a weaker Mexican peso, negatively impacted total sales growth by approximately $96 million, or 0.5%. The Company's reported numbers smashed analysts' consensus of $21.8 billion Home Depot's comparable store sales for Q4 2016 were positive 5.8%, and comp sales for U.S. stores were positive 6.3%. Home Depot's sales for FY16 were $94.6 billion, an increase of 6.9% from FY15. Total Company comparable store sales for fiscal 2016 increased 5.6%, and comp sales for US stores were positive 6.2% for the year.
Home Depot's net earnings for Q4 2016 were $1.7 billion, or $1.44 per diluted share, compared with net earnings of $1.5 billion, or $1.17 per diluted share, in the same period of FY15. For the reported quarter, the Company's diluted earnings per share increased 23.1% on a y-o-y basis, and came in above market estimates of $1.34 per share. Earnings per diluted share in FY16 were $6.45 compared to $5.46 per diluted share in FY15, up 18.1%.
Capital Allocation Strategy
As a reflection of the progress on the Company's strategic initiatives and commitment to creating shareholder value, the Company made the following announcements:
Home Depot's board of directors has authorized a $15.0 billion share repurchase program, replacing its previous authorization. Since 2002 and through January 29, 2017, the Company has returned more than $67 billion of cash to shareholders through repurchases, repurchasing approximately 1.3 billion shares.
Fiscal 2017 Guidance
For FY17, Home Depot is forecasting sales growth of approximately 4.6% and Comparable store sales growth of approximately 4.6% The Company expects gross margin to decrease approximately 15 basis points and operating margin expansion of approximately 30 basis points. Home Depot's diluted earnings-per-share growth after anticipated share repurchases were approximately 10.5%, or $7.13. Depreciation and amortization expense was approximately $2.0 billion. Cash flow from its business was approximately $11.3 billion.
Cash Flow
In fiscal 2016, Home Depot generated approximately $9.8 billion of cash from operations and used that cash as well as proceeds from $2 billion of incremental long-term debt issuances to invest in its business, to repurchase its shares, and to pay dividends to its shareholders. During the year, Home Depot invested approximately $1.62 billion back into its business through capital expenditures. Furthermore, the Company repurchased approximately $7 billion, or about 53 million of its outstanding shares including roughly $2.4 billion, or 18 million shares, in Q4 2016. During the reported year, Home Depot paid $3.4 billion in dividends to its shareholders. Computed on the average of beginning and ending long-term debt and equity for the trailing 12 months, return on invested capital was 31.4%, 330 basis points higher than at the end of FY15.
Store Update
At the end of the fourth quarter, the Company operated a total of 2,278 retail stores in all 50 states, the District of Columbia, Puerto Rico, US Virgin Islands, Guam, 10 Canadian provinces, and Mexico. During the fiscal year, the Company opened four new stores in Mexico, bringing its total store count to 2,278 and selling square footage to 237 million square feet. For the year, total sales per square foot increased by 5.5% to $391; the Company's highest sales per square foot since 2001. At the end of the quarter, merchandise inventories were $12.5 billion, up $740 million from last year, and inventory turns were 4.9 times, flat compared to last year.
Stock Performance
On March 08, 2017, Home Depot's share price finished the trading session at $146.92, slightly up 0.62%. A total volume of 3.61 million shares exchanged hands. The stock has rallied 13.98% and 18.48% in the last three months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 10.24%. The stock is trading at a PE ratio of 22.77 and has a dividend yield of 2.42%.
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SOURCE: Active Wall Street