ATLANTA — HD Supply Holdings, Inc. reported Net sales of $6.1 billion for the full-year of fiscal 2019 ended February 2, 2020, an increase of $99 million, or 1.6 percent, as compared to the full-year of fiscal 2018. Fiscal 2019 consisted of 52 weeks, as compared to 53 weeks in fiscal 2018. Organic sales growth, on a 52-week basis for the full-year of fiscal 2019 was 3.0 percent, as compared to the full-year of fiscal 2018.
“Despite ending 2019 with a solid performance, we enter 2020 with the COVID-19 virus top of mind,” stated Joe DeAngelo, Chairman and CEO of HD Supply. “We are committed to helping our customers succeed in these challenging times by doing everything we can to keep our HD Supply family healthy and focused.”
Gross profit increased $28 million, or 1.2 percent, to $2,403 million in fiscal 2019, as compared to $2,375 million in fiscal 2018. Gross profit was 39.1 percent of Net sales in fiscal 2019, a decrease of approximately 20 basis points from 39.3 percent in fiscal 2018.
Operating income decreased $1 million, or 0.1 percent, to $723 million in fiscal 2019, as compared to $724 million in fiscal 2018. Operating income was 11.8 percent of Net sales in fiscal 2019, a decrease of approximately 20 basis points from 12.0 percent in fiscal 2018.
Net income increased $58 million, or 14.7 percent, to $452 million in fiscal 2019, as compared to $394 million in fiscal 2018. Net income per diluted share increased $0.54, or 24.9 percent, to $2.71 in fiscal 2019, as compared to $2.17 in fiscal 2018.
Adjusted EBITDA increased $2 million, or 0.2 percent, to $873 million in fiscal 2019, as compared to $871 million in fiscal 2018. Adjusted EBITDA was 14.2 percent of Net sales in fiscal 2019, a decrease of approximately 20 basis points from 14.4 percent in fiscal 2018. On a 52-week basis, Adjusted EBITDA growth was 1.7 percent in fiscal 2019, as compared to fiscal 2018.
Adjusted net income decreased $23 million, or 3.7 percent, to $596 million in fiscal 2019, as compared to $619 million in fiscal 2018. Adjusted net income per diluted share increased $0.17, or 5.0 percent, to $3.57 in fiscal 2019, as compared to $3.40 in fiscal 2018.
Fourth-Quarter 2019 Results
Net sales decreased $61 million, or 4.2 percent, to $1,385 million in the fourth quarter of fiscal 2019, as compared to $1,446 million in the fourth quarter of fiscal 2018. The fourth quarter of fiscal 2019 consisted of 13 weeks, as compared to 14 weeks during the fourth quarter of fiscal 2018. Sales growth, on a 13-week basis, in the fourth quarter of fiscal 2019 was 3.2 percent, as compared to the fourth quarter of fiscal 2018.
Gross profit decreased $27 million, or 4.7 percent, to $545 million for the fourth quarter of fiscal 2019, as compared to $572 million for the fourth quarter of fiscal 2018. Gross profit was 39.4 percent of Net sales for the fourth quarter of fiscal 2019, down approximately 20 basis points from 39.6 percent for the fourth quarter of fiscal 2018.
Operating income decreased $12 million, or 8.1 percent, to $137 million for the fourth quarter of fiscal 2019, as compared to $149 million for the fourth quarter of fiscal 2018. Operating income was 9.9 percent of Net sales for the fourth quarter of fiscal 2019, down approximately 40 basis points from 10.3 percent for the fourth quarter of fiscal 2018.
Net income decreased $14 million, or 15.2 percent, to $78 million for the fourth quarter of fiscal 2019, as compared to $92 million for the fourth quarter of fiscal 2018. Net income in the fourth quarter of fiscal 2018 included $2 million of Income from discontinued operations, net of tax.
Net income per diluted share decreased $0.04, or 7.7 percent, to $0.48 in the fourth quarter of fiscal 2019, as compared to $0.52 in the fourth quarter of fiscal 2018.
Adjusted EBITDA decreased $8 million, or 4.3 percent, to $179 million for the fourth quarter of fiscal 2019, as compared to $187 million for the fourth quarter of fiscal 2018. Adjusted EBITDA was 12.9 percent of Net sales for the fourth quarter of fiscal 2019, flat as compared to the fourth quarter of fiscal 2018. On a 13-week basis, Adjusted EBITDA growth was 2.9 percent in the fourth quarter of fiscal 2019, as compared to the fourth quarter of fiscal 2018.
Adjusted net income decreased $19 million, or 15.4 percent, to $104 million for the fourth quarter of fiscal 2019, as compared to $123 million for the fourth quarter of fiscal 2018. Adjusted net income per diluted share decreased -$0.06, or 8.6 percent, to $0.64 in the fourth quarter of fiscal 2019, as compared to $0.70 in the fourth quarter of fiscal 2018.
As of February 2, 2020, HD Supply’s combined liquidity of $628 million was comprised of $34 million in cash and cash equivalents and $594 million of additional available borrowings (excluding $4 million of borrowings on available cash balances) under HD Supply, Inc.’s senior asset-based lending facility, based on qualifying inventory and receivables.
Business Unit Performance
Facilities Maintenance
Full-Year Results
Net sales increased $41 million, or 1.3 percent, to $3,130 million in the full-year fiscal 2019, as compared to $3,089 million for the full-year fiscal 2018. Sales growth, on a comparable 52-week basis, for fiscal 2019 was 3.1 percent, as compared to fiscal 2018. Adjusted EBITDA was flat at $546 million for the full-year fiscal 2019 as compared to the full-year fiscal 2018. The 53rd week in fiscal 2018 contributed approximately $10 million to Adjusted EBITDA. Adjusted EBITDA was 17.4 percent of Net sales for the full-year fiscal 2019, down approximately 30 basis points from 17.7 percent for the full-year fiscal 2018.
Fourth Quarter Results
Net sales decreased $34 million, or 4.6 percent, to $702 million in the fourth quarter of fiscal 2019, as compared to $736 million for the fourth quarter of fiscal 2018. Sales growth, on a comparable 13-week basis, for fourth quarter of fiscal 2019 was 2.8 percent, as compared to the fourth quarter of fiscal 2018. Adjusted EBITDA decreased $10 million, or 8.1 percent, to $114 million for the fourth quarter of fiscal 2019, as compared to $124 million for the fourth quarter of fiscal 2018. Adjusted EBITDA was 16.2 percent of Net sales for the fourth quarter of fiscal 2019, down approximately 60 basis points from 16.8 percent for the fourth quarter of fiscal 2018.
Construction & Industrial
Full-Year Results
Net sales increased $58 million, or 2.0 percent, to $3,019 million in the full-year fiscal 2019, as compared to $2,961 million for the full-year fiscal 2018. Organic sales growth, on a comparable 52-week basis, for the full-year fiscal 2019 was 2.9 percent, as compared to the full-year fiscal 2018. Adjusted EBITDA increased $2 million, or 0.6 percent, to $327 million for the full-year fiscal 2019, as compared to $325 million for the full-year fiscal 2018. The 53rd week in fiscal 2018 contributed approximately $3 million to Adjusted EBITDA. Adjusted EBITDA was 10.8 percent of Net sales for the full-year fiscal 2019, down approximately 20 basis points from 11.0 percent for the full-year fiscal 2018.
Fourth Quarter Results
Net sales decreased $26 million, or 3.7 percent, to $685 million in the fourth quarter of fiscal 2019, as compared to $711 million for the fourth quarter of fiscal 2018. Sales growth, on a comparable 13-week basis, in the fourth quarter of fiscal 2019 was 3.8 percent, as compared to the fourth quarter of fiscal 2018. Adjusted EBITDA increased $2 million, or 3.2 percent, to $65 million for the fourth quarter of fiscal 2019, as compared to $63 million for the fourth quarter of fiscal 2018. Adjusted EBITDA was 9.5 percent of Net sales for the fourth quarter of fiscal 2019, up approximately 60 basis points from 8.9 percent for the fourth quarter of fiscal 2018.
Fourth-Quarter Monthly Sales Performance
Net sales for November, December and January of fiscal 2019 were $436 million, $403 million and $546 million, respectively. There were 18 selling days in November, 19 selling days in December and 24 selling days in January of fiscal 2019, compared to 18 selling days in November, 20 selling days in December and 28 selling days in January of fiscal 2018. Average year-over-year daily sales changes for November, December and January were an increase of 2.5 percent, a decrease of 6.8 percent and an increase of 12.7 percent, respectively.
Preliminary February Sales Results
Preliminary Net sales in February 2020 were approximately $460 million, which represents year-over-year average daily sales growth of approximately 8.8 percent. Preliminary February year-over-year average daily sales by business segment was a 4.1 percent increase in Facilities Maintenance and a 14.2 percent increase in Construction & Industrial. There were 20 selling days in both February 2020 and February 2019.
Share Repurchase Program
During the fourth quarter of fiscal 2019, the Company completed the $500 million of share repurchases authorized by the Board of Directors in November 2018, purchasing approximately 13.0 million shares at an average price of $38.61 per share.
On March 12, 2020, the Company’s Board of Directors authorized a new share repurchase program for the repurchase of up to an aggregate $500 million of its common stock. The Company will conduct repurchases under the share repurchase program in the open market and through broker-negotiated purchases in compliance with Rule 10b5-1 as part of the Company’s ongoing capital allocation program.
2020 Outlook
The company will not be providing a first quarter 2020 or fiscal full year 2020 outlook in light of the ongoing coronavirus disease 2019 (“COVID-19”) outbreak.
Tagged with financial results, H.D. Supply