ATLANTA — HD Supply Holdings, Inc. today reported Net sales of $1.4 billion for the first quarter of fiscal 2020 ended May 3, 2020, a decrease of $98 million, or 6.6 percent, as compared to the first quarter of fiscal 2019.
“The COVID-19 pandemic has created extraordinary challenges, but our focus has remained clear. We have prioritized the health and well-being of our associates and their families while continuing to serve our customers and our communities. Our associates have worked tirelessly to fulfill our responsibilities and I am proud of each and every one of them,” stated Joe DeAngelo, Chairman and CEO of HD Supply. “We are encouraged by improving results in May, and we will continue to support our customers and communities as they work to safely resume economic activity.”
Gross profit decreased $35 million, or 6.0 percent, to $550 million for the first quarter of fiscal 2020, as compared to $585 million for the first quarter of fiscal 2019. Gross profit was 39.4 percent of Net sales for the first quarter of fiscal 2020, an increase of approximately 20 basis points from 39.2 percent for the first quarter of fiscal 2019.
Operating income decreased $49 million, or 28.8 percent, to $121 million for the first quarter of fiscal 2020, as compared to $170 million for the first quarter of fiscal 2019. Operating income was 8.7 percent of Net sales for the first quarter of fiscal 2020, down approximately 270 basis points from 11.4 percent for the first quarter of fiscal 2019.
Net income decreased $35 million, or 32.7 percent, to $72 million for the first quarter of fiscal 2020, as compared to $107 million for the first quarter of fiscal 2019.
Net income per diluted share decreased $0.18, or 28.6 percent, to $0.45 for the first quarter of fiscal 2020, as compared to $0.63 for the first quarter of fiscal 2019.
Adjusted EBITDA decreased $40 million, or 19.7 percent, to $163 million for the first quarter of fiscal 2020, as compared to $203 million for the first quarter of fiscal 2019. Adjusted EBITDA was 11.7 percent of Net sales for the first quarter of fiscal 2020, down approximately 190 basis points from 13.6 percent for the first quarter of fiscal 2019.
Adjusted net income decreased $35 million, or 24.5 percent, to $108 million for the first quarter of fiscal 2020, as compared to $143 million for the first quarter of fiscal 2019. Adjusted net income per diluted share decreased $0.17, or 20.2 percent, to $0.67 for the first quarter of fiscal 2020, as compared to $0.84 for the first quarter of fiscal 2019.
As of May 3, 2020, HD Supply’s combined liquidity of $797 million was comprised of $147 million in cash and cash equivalents and $650 million of additional available borrowings (excluding $85 million of borrowings on available cash balances) under HD Supply, Inc.’s senior asset-based lending facility, based on qualifying inventory and receivables. HD Supply’s May 3, 2020 combined liquidity increased by $169 million from its fiscal 2019 year-end combined liquidity of $628 million.
Business Unit Performance
Facilities Maintenance
Net sales decreased $90 million, or 11.7 percent, to $682 million for the first quarter of fiscal 2020, as compared to $772 million for the first quarter of fiscal 2019. Adjusted EBITDA decreased $36 million, or 26.9 percent, to $98 million for the first quarter of fiscal 2020, as compared to $134 million for the first quarter of fiscal 2019. Adjusted EBITDA was 14.4 percent of Net sales for the first quarter of fiscal 2020, down approximately 300 basis points from 17.4 percent for the first quarter of fiscal 2019.
Construction & Industrial
Net sales decreased $8 million, or 1.1 percent, to $713 million for the first quarter of fiscal 2020, as compared to $721 million for the first quarter of fiscal 2019. Adjusted EBITDA decreased $4 million, or 5.8 percent, to $65 million for the first quarter of fiscal 2020, as compared to $69 million for the first quarter of fiscal 2019. Adjusted EBITDA was 9.1 percent of Net sales for the first quarter of fiscal 2020, down approximately 50 basis points from 9.6 percent for the first quarter of fiscal 2019.
First-Quarter Monthly Sales Performance
Net sales for February, March and April of fiscal 2020 were $461 million, $462 million and $472 million, respectively. There were 20 selling days in February, 20 selling days in March and 25 selling days in April of fiscal 2020 and fiscal 2019. Average year-over-year daily sales changes for February, March and April of fiscal 2020 as compared to fiscal 2019 were an increase of 8.8 percent, an increase of 0.5 percent and a decrease of 22.6 percent, respectively.
Preliminary May Sales Results
Preliminary Net sales in May 2020 were approximately $431 million, which represents a year-over-year average daily decline of approximately 7.3 percent. Preliminary May year-over-year average daily Net sales decline by business segment was 13.4 percent in Facilities Maintenance and 1.4 percent in Construction & Industrial. There were 19 selling days in both May 2020 and May 2019. May’s Net sales performance improved throughout the month in both Facilities Maintenance and Construction & Industrial.
2020 Outlook
The company will not be providing a second quarter 2020 or fiscal full year 2020 outlook in light of the ongoing coronavirus disease (“COVID-19”) outbreak.
Tagged with financial results, HD Supply