Tuesday, 26 September 2017 07:20 AM
LONDON, UK / ACCESSWIRE / September 26, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on HD Supply Holdings, Inc. (NASDAQ: HDS), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=HDS, following the Company's release of its financial results on September 06, 2017, for the second quarter fiscal 2017. One of the largest industrial distributors in North America saw its net revenue increased 5.4% on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For three months ended July 30, 2017, HD Supply's net revenue increased 5.4% to $1.35 billion from $1.28 billion in Q2 FY16. Net revenue was in-line with analysts' expectations of $1.35 billion.
During Q2 FY17, the Company's gross profit increased 5% to $539 million from $513 million in the same period last year. For the reported quarter, the Company's gross margin decreased 10 basis points to 39.9% of revenue from 40% of revenue in Q2 FY16.
During Q2 FY17, HD Supply's adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased 2.4% to $208 million from $203 million in Q2 FY16. For the reported quarter, the Company's adjusted EBITDA margin decreased 40 basis points to 15.4% of revenue from 15.8% of revenue in Q2 FY16.
For the reported quarter, HD Supply's selling, general, and administrative (SG&A) expenses increased 6.6% to $338 million from $317 million in Q2 FY16. During Q2 FY17, the Company's depreciation and amortization (D&A) expenses were $21 million, at par with $21 million in Q2 FY16. For the reported quarter, the Company's total operating expenses increased 4.9% to $359 million from $342 million in Q2 FY16.
During Q2 FY17, HD Supply's operating income increased 5% to $180 million from $171 million in Q2 FY16. For the reported quarter, the Company's operating margin was 13.3% of revenue, at par with 13.3% of revenue in Q2 FY16.
During Q2 FY17, HD Supply's net income increased 351% to $442 million on a y-o-y basis from $98 million in Q2 FY16. For the reported quarter, the Company's adjusted net income increased 22% to $127 million on a y-o-y basis from $104 million in Q2 FY16. During Q2 FY17, HD Supply's diluted EPS increased 353% to $2.22 on a y-o-y basis from $0.49 in Q2 FY16. For the reported quarter, the Company's adjusted diluted EPS increased 25.4% to $0.64 on a y-o-y basis from $0.51 in Q2 FY16. The adjusted diluted EPS was in-line with analysts' expectations of $0.64.
HD Supply's Segment Details
Facilities Maintenance - During Q2 FY17, the Facilities Maintenance segment's net revenue increased 4% to $769 million from $741 million in Q2 FY16. For the reported quarter, the segment's adjusted EBITDA increased 3% to $156 million from $151 million in Q2 FY16.
Construction & Industrial - During Q2 FY17, the Construction & Industrial segment's net revenue increased 7% to $584 million from $544 million in Q2 FY16. For the reported quarter, the segment's adjusted EBITDA increased 1% to $69 million from $68 million in Q2 FY16.
Balance Sheet
As on July 30, 2017, HD Supply's cash and cash equivalents decreased 10.6% to $67 million from $75 million in Q4 FY16. During Q2 FY17, the Company's inventories increased 13.8% to $690 million from $606 million as on January 29, 2017.
During Q2 FY17, HD Supply's accounts payable increased 41.8% to $454 million from $320 million in Q4 FY16.
For the reported quarter, the Company's long-term debt, excluding current installments, increased 6.3% to $4.04 billion from $3.80 billion in Q4 FY16.
During H1 FY17, HD Supply's cash provided by operating activities increased 15.2% to $189 million from $164 million in H1 FY16.
Outlook
For Q3 FY17, HD Supply expects net revenue to be in the band of $1.32 billion to $1.36 billion and adjusted EBITDA to be in the range of $200 million-$212 million. The Company estimates adjusted diluted EPS to be in the range of $0.73 to $0.79 for Q3 FY17.
For FY17, HD Supply expects net revenue to be in the range of $5.0 billion to $5.1 billion and adjusted EBITDA to be in the band of $700 million to $730 million. The Company estimates adjusted diluted EPS to be in the range of $2.13 to $2.19 for fiscal 2017.
Stock Performance
On Monday, September 25, 2017, the stock closed the trading session at $35.33, advancing 1.17% from its previous closing price of $34.92. A total volume of 3.24 million shares have exchanged hands, which was higher than the 3-month average volume of 3.19 million shares. HD Supply's stock price rallied 13.67% in the last one month, 12.88% in the past three months, and 10.75% in the previous twelve months. The stock is trading at a PE ratio of 27.80 and currently has a market cap of $6.99 billion.
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