Home Depot Updates FY20 Return On Invested Capital Target - Quick Facts

(RTTNews) - The Home Depot (HD) has updated its return on invested capital target for fiscal 2020 to reflect the impact of the Tax Cuts and Jobs Act of 2017. The company now expects return on invested capital of more than 40 percent. For fiscal 2020, The Home Depot reaffirmed: total sales ranging from approximately $115 billion to approximately $120 billion; compounded annual sales growth rate ranging from approximately 4.5 percent to approximately 6.0 percent; and operating margin ranging from approximately 14.4 percent to approximately 15.0 percent.

The Home Depot plans to adopt ASU No. 2014-09, which pertains to revenue recognition, in the first quarter of fiscal 2018. The company will update fiscal 2018 guidance in May to reflect the impact of the accounting change. The company does not expect the accounting change to have a material impact on its fiscal 2018 sales or operating margin guidance. Currently, the company expects: sales growth of approximately 6.5 percent including the 53rd week; comparable store sales growth of approximately 5.0 percent for the 52-week period; operating margin of approximately 14.5 percent; and 53-week earnings-per-share growth, after anticipated share repurchases, of approximately 28.0 percent to $9.31.

Fourth-quarter net earnings were $1.8 billion, or $1.52 per share, compared to net earnings of $1.7 billion, or $1.44 per share, prior year. For the fourth quarter of fiscal 2017, earnings per share increased 5.6 percent from the same period in the prior year. The charge related to additional net tax expense, coupled with the one-time bonus payment to hourly associates, negatively impacted fourth-quarter earnings per share by approximately $0.17.

Fourth-quarter sales were $23.9 billion, a 7.5 percent increase from the fourth quarter of fiscal 2016. Comparable store sales were positive 7.5 percent, and comp sales for U.S. stores were positive 7.2 percent.

The Home Depot announced its board declared a 15.7 percent increase in quarterly dividend to $1.03 per share. The dividend is payable on March 22, 2018, to shareholders of record on the close of business on March 8, 2018.