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Non-Tech : Home Depot (HD)
HD 326.85-0.4%Apr 19 4:00 PM EDT

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From: Neil H12/8/2010 7:23:43 AM
   of 1170
The Home Depot Outlines Strategic Progress and Future Initiatives; Updates Fiscal Year 2010 Guidance and Provides Fiscal Year 2011 Outlook

HD Price at time of this $33.55

Wednesday December 8, 2010, 7:00 am
ATLANTA, Dec. 8, 2010 /PRNewswire-FirstCall/ -- The Home Depot®, the world's largest home improvement retailer, will today outline progress on its key strategic priorities and discuss its long-term financial targets at its 2010 Investor and Analyst Conference. In addition, the Company lifted its fiscal year 2010 sales and earnings per share from continuing operations guidance and provided fiscal year 2011 financial targets.

Strategic Priorities

The Company will discuss its four areas of strategic focus and its progress and plans for each: (1) customer service, (2) product authority, (3) productivity and efficiency driven by disciplined capital allocation, and (4) interconnected retail.

The Company's focus on customer service is anchored on the principles of taking care of associates, putting customers first and simplifying the business.

The Company's focus on product authority is facilitated by its merchandising transformation and portfolio strategy, including innovation, assortment and value.

The Company's approach to driving productivity and efficiency starts with disciplined capital allocation focused on building best-in-class competitive advantages in information technology and supply chain, as well as building shareholder value through higher returns on invested capital and total value returned to shareholders in the form of dividends and share repurchases.

The Company's focus on interconnected retail is based on the view that providing a seamless shopping experience across multiple channels will be a critical enabler for future success.

"The Home Depot has a strong foundation of customer service, product authority and value creation. As we look to 2011 and beyond, we will continue to build on that foundation and deliver superior returns," said Frank Blake, chairman & CEO.

Updated Fiscal Year 2010 Sales and Earnings Per Share from Continuing Operations Guidance

Based on its year-to-date performance and expectations for the remainder of the fiscal year, the Company updated its fiscal year 2010 guidance and now expects sales to be up approximately 2.3 percent for the year. The Company expects diluted earnings per share from continuing operations as reported to increase by approximately 27 percent to $1.97 for the year. This earnings per share guidance includes the benefit of the Company's year-to-date repurchases through the third quarter of fiscal 2010, but excludes the impact of future share repurchases.

Fiscal Year 2011 Financial Outlook (based on GAAP)

The Company set forth the following financial targets for fiscal year 2011:

Sales growth: approximately 2.0 to 2.5 percent
Comparable store sales growth: low single digit
New store openings: 10
Gross margin expansion: moderate
Expense leverage: modest
Operating margin expansion: approximately 30 to 40 bps
Tax rate: approximately 36.9 percent
Earnings per share from continuing operations growth, before share repurchases: approximately 7 to 9 percent
Earnings per share from continuing operations growth, after share repurchases: approximately 11 to 13 percent
Capital expenditures: approximately $1.3 billion
Depreciation and amortization expense: approximately $1.7 billion
Cash flow from the business: approximately $5.4 billion
Share repurchases: intend to use excess cash to repurchase shares; targeting $2.5 billion
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