HOME DEPOT INC

We reported net sales of $40.2 billion in the third quarter of fiscal 2024. Net earnings were $3.6 billion, or $3.67 per diluted share. For the first nine months of fiscal 2024, net sales were $119.8 billion and net earnings were $11.8 billion, or $11.90 per diluted share.

During the third quarter of fiscal 2024, we opened five new stores in the U.S., resulting in a total store count of 2,345 at October 27, 2024. A total of 321 stores, or 13.7%, were located in Canada and Mexico. For the third quarter of fiscal 2024, sales per retail square foot were $582.97, and for the first nine months of fiscal 2024, sales per retail square foot were $604.11. Our inventory turnover ratio was 4.8 times at the end of the third quarter of fiscal 2024, compared to 4.3 times at the end of the third quarter of fiscal 2023. The increase in our inventory turnover ratio was primarily driven by lower average inventory levels within our Primary segment during the first nine months of fiscal 2024.

During the first nine months of fiscal 2024, we generated $15.1 billion of cash flow from operations, received approximately $10.0 billion of proceeds from the issuance of long-term debt, net of discounts, and received $1.3 billion of proceeds from commercial paper borrowings, net of repayments. We utilized a combination of commercial paper borrowings and the issuance of long-term debt, together with cash on hand, to fund the acquisition of SRS, with cash purchase consideration totaling $17.7 billion. Specifically, in June 2024, leading up to the acquisition on June 18, 2024, we raised commercial paper borrowings of over $15.0 billion to fund the transaction, of which approximately $10.0 billion was then immediately repaid with the proceeds from our issuance of long-term debt. We have continued to repay a portion of these outstanding commercial paper borrowings and ended the third quarter of fiscal 2024 with $1.3 billion of commercial paper borrowings outstanding.

During the first nine months of fiscal 2024, we also paid $6.7 billion in cash dividends, funded $2.4 billion in capital expenditures, repaid $1.4 billion of long-term debt, and funded $649 million of share repurchases, prior to pausing share repurchases in March 2024.

In February 2024, we announced a 7.7% increase in our quarterly cash dividend to $2.25 per share.

Our ROIC for the trailing twelve-month period was 31.5% at the end of the third quarter of fiscal 2024 and 38.7% at the end of the third quarter of fiscal 2023. The decrease in ROIC was primarily driven by higher average long-term debt and higher average equity due to the financing of the SRS acquisition, along with lower operating income. See the Non-GAAP Financial Measures section below for our definition and calculation of ROIC.

SRS Acquisition

On March 27, 2024, we entered into a definitive agreement to acquire SRS, a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor. On June 18, 2024, following the satisfaction or waiver of the applicable closing conditions, including receipt of the requisite regulatory approvals, the acquisition was completed and all merger consideration was transferred. We believe the acquisition of SRS will accelerate the Company’s growth with the residential professional customer. The acquisition is expected to complement our existing capabilities and enable us to better serve complex project purchase occasions with the renovator/remodeler, while also establishing the Company as a leading specialty trade distributor across multiple verticals. Refer to Note 2 and Note 10 to our consolidated financial statements for further discussion of the impact of the acquisition on our consolidated financial statements.