Home Depot Q3 profits rise, full breach costs not yet tallied

Atlanta, G.A. – The Home Depot Inc. showed solid performance in the third quarter of fiscal 2014 despite reporting a major data breach in September, but still has not fully accounted for all the costs related to the breach. Home Depot reported net earnings of $1.5 billion, topping Wall Street projections and a 7% increase from $1.4 billion the same quarter in fiscal 2013.

Sales were $20.51 billion, up 5% from $19.47 billion. Same-store sales increased 5.2%. So far, Home Depot has recorded $28 million in connection with a data breach that exposed data from 56 million payment cards and email addresses of 53 million customers between April and September 2014. The company also reported a pretax gain on sale of $100 million related to the sale of a portion of its equity ownership in HD Supply Holdings Inc., which helped boost earnings despite the breach costs.

Looking ahead, Home Depot confirmed that it expects fiscal 2014 sales growth of approximately 4.8% and fiscal 2014 diluted earnings per share to grow by 21% to approximately $4.54. However, the company acknowledged EPS guidance does not include other potential breach-related costs it cannot currently estimate, including liabilities to payment card networks, customer reimbursements, fees relating to litigation and investigations, and incremental expenses and capital investments for remediation activities.

"During the quarter we saw strong performance across all geographies led by growth in transactions and continued strength in the core of the store," said Craig Menear, CEO and president. "I would like to thank our associates for their hard work and dedication to our customers, and I would like to thank our customers for their continued confidence in The Home Depot."