HD Supply Reports 1Q Gains
HD Supply reported net sales of $1.9 billion for the fiscal 2011 first quarter ended May 1, 2011. Despite unfavorable weather conditions and continued weakness in the construction industry at the beginning of this year, net sales increased $88 million, or 4.9 percent, compared to the first quarter of fiscal 2010. Gross profit for the first quarter fiscal 2011 grew by 5.2 percent, to $527 million compared to $501 million last year. Gross profit for the first quarter of fiscal 2011 was 27.9 percent of net sales versus 27.8 percent of net sales for the first quarter of fiscal 2010.
For the first time since 2008, operating income showed positive numbers in the first quarter this year.Operating income for the first quarter of fiscal 2011 was $12 million, an improvement of $33 million compared to an operating loss of $21 million at the same time last year. The improvement in operating income reflects the 4.9 percent sales growth and a 90 basis point decline in selling, general and administrative expenses as percent of sales despite inflationary pressure, including medical costs, fuel costs and a resumption of the company’s 401(k) match.
Loss from continuing operations before income taxes was $145 million in the first quarter of fiscal 2011, an improvement of $35 million as compared to the first quarter of fiscal 2010. Consolidated loss from continuing operations for the first quarter of fiscal 2011 was $165 million, compared to a loss from continuing operations of $202 million for the first quarter of fiscal 2010.
“We posted our fourth consecutive quarter of sales growth despite prolonged economic headwinds. The growth was driven by our associates’ intense focus on serving customers in our core markets, sales initiative execution in adjacent markets and specialization of activities to further penetrate specific customer segments,” said Joe DeAngelo, CEO of HD Supply.
“We experienced some improvement in our industrial and non-residential construction markets, but expect the residential construction market to remain challenging. We expanded our White Cap geographic footprint to Nashville, which brings that segment’s location network to 132 branches in 29 states. We now operate approximately 770 facilities across our business and it is the first time we have increased our location count since 2007. Subsequent to the close of the quarter, we completed the acquisition of RAMSCO, to further strengthen our Waterworks business in the Northeast.”
For more on HD Supply’s First Quarter, read the full press release here.