Home Depot, Inc. (HD) has reported an 11.70 percent rise in profit for the quarter ended Apr. 30, 2017. The company has earned $2,014 million, or $1.67 a share in the quarter, compared with $1,803 million, or $1.44 a share for the same period last year.
Revenue during the quarter grew 4.94 percent to $23,887 million from $22,762 million in the previous year period. Gross margin for the quarter contracted 9 basis points over the previous year period to 34.14 percent. Total expenses were 85.98 percent of quarterly revenues, down from 86.48 percent for the same period last year. This has led to an improvement of 50 basis points in operating margin to 14.02 percent.
Operating income for the quarter was $3,349 million, compared with $3,077 million in the previous year period.
"We were pleased with our results as they reflected broad-based growth across our interconnected platform and all geographies," said Craig Menear, chairman, chief executive officer and president. "This was made possible by our hard working store associates, merchants and supply chain teams and our continued dedication to customer service."
For fiscal year 2017, Home Depot, Inc. forecasts revenue to grow at 4.60 percent. The company expects diluted earnings per share to be $0.11.
Operating cash flow improves significantly
Home Depot, Inc. has generated cash of $4,564 million from operating activities during the quarter, up 25.52 percent or $928 million, when compared with the last year period. The company has spent $445 million cash to meet investing activities during the quarter as against cash outgo of $321 million in the last year period. It has incurred capital expenditure of $445 million on net basis during the quarter, up 38.63 percent or $124 million from year ago period.
The company has spent $3,081 million cash to carry out financing activities during the quarter as against cash outgo of $2,338 million in the last year period.
Cash and cash equivalents stood at $3,565 million as on Apr. 30, 2017, up 9.46 percent or $308 million from $3,257 million on May 01, 2016.
Working capital declines
Home Depot, Inc. has witnessed a decline in the working capital over the last year. It stood at $3,458 million as at Apr. 30, 2017, down 10.44 percent or $403 million from $3,861 million on May 01, 2016. Current ratio was at 1.21 as on Apr. 30, 2017, down from 1.25 on May 01, 2016.
Cash conversion cycle (CCC) has decreased to 2 days for the quarter from 37 days for the last year period. Days sales outstanding were almost stable at 8 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 39 days for the quarter compared with 76 days for the previous year period. At the same time, days payable outstanding went down to 45 days for the quarter from 46 for the same period last year.
Debt moves up
Home Depot, Inc. has witnessed an increase in total debt over the last one year. It stood at $22,937 million as on Apr. 30, 2017, up 9.49 percent or $1,989 million from $20,948 million on May 01, 2016. Total debt was 51.03 percent of total assets as on Apr. 30, 2017, compared with 46.99 percent on May 01, 2016. Debt to equity ratio was at 5.79 as on Apr. 30, 2017, up from 3.31 as on May 01, 2016. Interest coverage ratio improved to 13.19 for the quarter from 12.61 for the same period last year.
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