Home improvement retailer The Home Depot today reported record net earnings of U.S. $3.7 billion ($1.56 per diluted share) for fiscal 2002, compared with net earnings of $3.0 billion ($1.29 per diluted share) in fiscal 2001. Sales for fiscal 2002 increased 9 percent to $58.2 billion and comparable store sales were flat.
For the fourth quarter of fiscal 2002, net earnings reached $686 million ($0.30 per diluted share) compared with $710 million ($0.30 per diluted share) in the fourth quarter of 2001. Sales for the fourth quarter of fiscal 2002 totaled $13.2 billion, a 2 percent decline from the fourth quarter of fiscal 2001. Comparable store sales for the fourth quarter of fiscal 2002 declined 6 percent.
As reported, the fourth quarter of 2001 consisted of 14 weeks, and the year included 53 weeks. Comparing similar 52-week periods for 2001 to 2002, sales for 2002 increased 11 percent and earnings per diluted share increased 24 percent. Comparing equivalent 13-week periods for the fourth quarter, sales for 2002 increased 5 percent and earnings per diluted share increased 11 percent.
"The Home Depot delivered strong earnings growth for fiscal 2002 as we continued the process of transforming the infrastructure of our business," said Bob Nardelli, chairman, president, and CEO. "Throughout the year we launched new programs to reinvigorate product assortments, reset critical departments within our stores, and develop customer service initiatives. In 2002, we were especially pleased with our appliance business, where we captured considerable market share. The challenges presented by the pace and scope of these initiatives have been daunting and it is a tribute to our most valuable assets, our dedicated associates, that we have delivered solid earnings performance throughout the year.
"During 2002 we completed a $2 billion share repurchase program, buying back approximately 69 million shares of common stock. The financial strength of The Home Depot is unsurpassed in retailing. We ended the year with equity of $19.8 billion, a debt-to-equity ratio of 6.7%, and $2.3 billion in cash," Mr. Nardelli said.
"In fiscal 2003, we expect to open 200 new stores and add 40,000 associates. Looking forward, we expect to gain traction from the transformational initiatives we launched during 2002. Our customers can be assured that customer service will remain at the heart of everything we do, supported by everyday low prices, innovative assortments, and cleaner, brighter stores," Nardelli said. "While the strength of our balance sheet and our operating performance allow us to stay on strategy, we remain cautious due to the current geopolitical environment and the domestic economy."
The Home Depot reaffirmed that it expects sales for fiscal 2003 to increase between 9 and 12 percent and earnings per diluted share to increase between 9 and 14 percent. Comparable sales are expected to be flat to slightly positive on the year. The company also indicated that, beginning with fiscal year 2003, it would provide sales, earnings and other financial forward-looking guidance on an annual basis only, consistent with its long-term outlook for the business.
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