HD Supply Holdings reported net sales of $2 billion for the third quarter of fiscal 2015 ended November 1, 2015, an increase of $98 million, or 5.1 percent, as compared to Q3 2014.
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The company believes its sales performance represents growth of approximately 300 basis points in excess of its market growth estimate.
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.
Operating income increased $50 million, or 27.9 percent, to $229 million for the third quarter of fiscal 2015 compared to $179 million for the third quarter of fiscal 2014.
Operating income as a percentage of Net sales increased approximately 200 basis points during the third quarter of fiscal 2015 as compared to the third quarter of fiscal 2014.
The improvement was primarily driven by improvements in Gross margin, disciplined cost control and a reduction of amortization expense on certain acquisition-related intangible assets.
Adjusted EBITDA increased $35 million, or 15.2 percent, to $265 million for the third quarter of fiscal 2015 compared to $230 million for the third quarter of fiscal 2014.
Adjusted EBITDA as a percentage of Net sales increased approximately 120 basis points to 13.2 percent in the third quarter of fiscal 2015 as compared to 12.0 percent in the third quarter of fiscal 2014.
The increase in Adjusted EBITDA reflects the continued focus on initiative execution to drive growth in excess of estimates of market growth, category management and the leverage of fixed costs through sales volume increases.
Net income increased $190 million to $250 million for the third quarter of fiscal 2015 compared to $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 diluted 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 $51 million, or 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 diluted 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 is primarily attributable to sales growth, gross margin expansion, the leverage of fixed costs through sales volume increases, and a reduction in interest expense.
As of November 1, 2015 HD Supply's combined liquidity of approximately $1,258 million was comprised of $77 million in Cash and cash equivalents and $1,181 million of additional available borrowings under a Senior ABL Facility, based on qualifying inventory and receivables. ■