Slimmed-Down HD Supply Reports Flat Q3 Sales

With only its Facilities Maintenance segment left going forward, the company's daily sales accelerated in November.

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It's been a heck of a past few months for HD Supply. The company surprised the industrial supply market in August when it announced the sale of its Construction & Industrial - White Cap Unit — a move that completed in October and downsized the company by half. Less than a month later, news broke that home improvement retail giant The Home Depot is acquiring HD Supply in an $8 billion reuniting between the two companies, as the latter spun off from The Home Depot in 2007. Including debt, The Home Depot is paying $9.1 billion in the transaction, which is expected to complete by the end of January.

On Friday, HD Supply reported its 2020 third quarter fiscal results for the period ended Nov. 1, and amid the C&I divestment, it meant the reporting covered a much smaller company comprised only of its Facilities Maintenance unit.

Watch — 5 Minutes With ID: What the Home Depot-HD Supply Deal Really Means

The Atlanta, GA-based company posted total Q3 sales of $828 million, up 0.3 percent year-over-year and compared sequentially with Facilities Maintenance Q2 sales of $761 million.

HD's Q3 gross profit dipped 1.1 percent year-over-year to $348 million at 42.1 percent of net sales (down 60 basis points). Operating profit fell 3.9 percent to $121 million at 14.6 percent of net sales (down 70 basis points), while total profit of $1.61 billion dwarfed the $132 million from a year earlier, primarily due to the $2.8 billion cash gain HD had from the C&I unit sale, minus transaction costs of about $35 million. Adjusted total profit of $75 million was flat compared to a year earlier.

"I am very proud of the team as their focused execution continued to deliver improved results, in the face of turbulent end markets and organizational change," stated Joe DeAngelo, chairman and CEO of HD Supply. “It is a testament to their dedication to our customers and their commitment to safely delivering best-in-class service."

HD Supply did not conduct a conference call alongside the release of its Q3 earnings report.

Monthly results

During Q3, HD Supply's net sales for August, September and October were $268 million, $247 million and $312 million, respectively. On a year-over-year daily sales basis, August increased 1.1 percent; Spetember decreased 0.7 percent; and October increased 0.3 percent.

The company's preliminary November sales were $222 million, representing year-over-year daily sales growth of 2.9 percent.

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