HD Supply Holdings Q3 Profit Up - Quick Facts

(RTTNews) - HD Supply Holdings Inc. (HDS) reported that its net income for the third quarter of fiscal 2015 significantly increased to $250 million from $60 million for the third quarter of fiscal 2014. Net income for the third quarter of fiscal 2015 included $186 million pre-tax gain on the sale of the Power Solutions business unit and $100 million loss on extinguishment and modification of debt. Net income per share increased $0.94 to $1.24 in the third quarter of fiscal 2015 compared to $0.30 in the third quarter of fiscal 2014.

Adjusted net income increased 62.2 percent to $133 million for the third quarter of fiscal 2015 as compared to an Adjusted net income of $82 million for the third quarter of fiscal 2014. Adjusted net income per share increased $0.25, or 61.0 percent to $0.66 in the third quarter of fiscal 2015, as compared to $0.41 in the third quarter of fiscal 2014. The increase in Adjusted net income was primarily attributable to sales growth, gross margin expansion, the leverage of fixed costs through sales volume increases, and a reduction in interest expense.

Preliminary Net sales in November were $534 million which represents 6.0 percent growth versus prior year. Preliminary November year-over-year average daily sales growth by business is Facilities Maintenance 7.4 percent, Waterworks 3.9 percent, and Construction & Industrial - White Cap 11.5 percent. There were 18 selling days in November.

Gross profit increased $51 million, or 8.3 percent, to $666 million for the third quarter of fiscal 2015 compared to $615 million for the third quarter of fiscal 2014. Gross profit was 33.1 percent of Net sales for the third quarter of fiscal 2015, up approximately 100 basis points from 32.1 percent of Net sales for the third quarter of fiscal 2014. The improvement in Gross margin was primarily driven by category management initiatives and favorable mix of products and services.

Net sales of $2.0 billion for the third quarter of fiscal 2015 ended November 1, 2015, an increase of $98 million, or 5.1 percent, as compared to the third quarter of fiscal 2014. The company believes its sales performance represents growth of approximately 300 basis points in excess of its market growth estimate.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.65 per share and revenues of $2.03 billion. Analysts' estimates typically exclude special items.

The company anticipates Net sales in the fourth quarter of fiscal 2015 to be in the range of $1.615 billion to $1.665 billion, Adjusted EBITDA in the range of $160 million to $170 million, and Adjusted net income per share in the range of $0.21 to $0.26. Analysts expect the company to report earnings of $0.27 per share and revenues of $1.64 billion for the fourth-quarter.