The company ended the quarter with $38.3 billion in total assets, including $3.7 billion in cash and stockholders' equity of $22.5 billion. The company announced that it completed its $6 billion share repurchase program in the second quarter. Earlier this month, the company's board of directors authorized an additional $1 billion share repurchase program, bringing the total to $7 billion.

"Our company remains committed to creating and returning value to our shareholders, as evidenced by our financial results and our dividend and share repurchase programs," added Nardelli. "In the first six months of the year, we have returned $2.8 billion to our shareholders in the form of dividends and share repurchases."

Return on invested capital was 20.4 percent, up 260 basis points from the second quarter last year.

"In addition to our record sales during the second quarter, the company had record operating margin of 12.3 percent, one of the highest in retail, reflecting strong gross margin expansion and good expense control," said Carol Tome, executive vice president, CFO.

In the first half of the year, 52% of the company's stores, along with four store support centers, achieved a payout through The Home Depot's Success Sharing bonus plan. With this program, The Home Depot will be paying out $30 million in September, almost twice as much as was paid out last year.

The company reiterated its fiscal 2004 sales growth guidance of 10-12 percent and increased its fiscal 2004 EPS growth guidance from 10-14 percent to 14-17 percent.

Enhancing the Core

"Strong sales and average ticket growth during our busiest shopping season suggest our distinctive product assortment and knowledgeable associates offered a compelling shopping experience," said John Costello, executive vice president, Merchandising and Marketing. "We are particularly pleased with the breadth of our sales growth across the store."

Average ticket increased 8.2 percent, or $4.13, to $54.73, a second quarter record. The company experienced average ticket growth in every selling category.

"From the front-end to the back-end of our stores, The Home Depot is enhancing the shopping experience, streamlining operations, and driving business efficiency as never before with unprecedented investments in technology," said Bob DeRodes, executive vice president, CIO.

    Information Technology highlights include:

     - Implemented SAP's core financial systems, improving processing and
       analytical capabilities
     - Completed the rollout of our new human resource management system
     - Expanded self-checkout to more than 830 stores, with nearly 250 million
       transactions to date
     - Announced plans to open a new technology center in Austin, Texas

Extending the Business/ Expanding Markets 

          The Home Depot continued to execute its strategy through the following accomplishments:

     - Grew services revenue by approximately 27 percent to $883 million
     - Acquired White Cap Construction Supply, Inc., which now operates 74 Pro
       distribution branches across the country
     - Continued expansion of tool rental centers to 925 locations
     - Completed the purchase of 20 Home Mart stores in Mexico, bringing the
       total to 42 stores in the $15 billion Mexican market
     - Opened 48 new stores, bringing the total store count to 1,788
     - Announced plans to enter the retail market in China

Finally, as the Olympic and Paralympic Games ramp up in Athens, Greece, The Home Depot is proud to support 71 participating associates from the company's Olympic Job Opportunities Program.

The Home Depot will conduct a conference call today to discuss information included in this news release and related matters at 9:00 a.m. EDT. The conference call will be available in its entirety through a Web cast at http://www.homedepot.com , and will be available through replay at the http://www.homedepot.com site under the investor relations' section.

The adjusted earnings per share included in this press release is reconciled to the comparable generally accepted accounting principles amount in the attached schedule. In January 2004, the company adopted EITF 02-16 "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor." Management believes that excluding the impact of EITF 02-16 allows investors to compare the results of operations without giving effect to this new accounting standard.

Founded in 1978, The Home Depot(R) is the world's largest home improvement specialty retailer and the second largest retailer in the United States, with fiscal 2003 sales of $64.8 billion. During the quarter, The Home Depot added 48 new stores. At the end of the second quarter of fiscal 2004, the company operated a total of 1,788 stores, including 1,569 The Home Depot stores in the United States, 105 The Home Depot stores in Canada, and 42 The Home Depot stores in Mexico. The company also operates 54 EXPO Design Centers, 11 The Home Depot Landscape Supply stores, five The Home Depot Supply stores, and two The Home Depot Floor Stores. The company employs approximately 300,000 associates and today has stores in 50 states, the District of Columbia, Puerto Rico, eight Canadian provinces and Mexico. Its stock is traded on the New York Stock Exchange (HD) and is included in the Dow Jones Industrial Average and Standard & Poor's 500 Index. HDE

Statements of The Home Depot's expectations for sales growth, earnings performance, capital expenditures, store openings and demand for services in this release constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from the company's historical experience and its present expectations. These risks and uncertainties include, but are not limited to, fluctuations in and the overall condition of the U.S. economy, stability of costs and availability of sourcing channels, conditions affecting new store development, the company's ability to integrate the businesses it acquires, the risk that the cost savings and any revenue synergies from acquisitions may not be fully realized or may take longer to realize than expected, the company's ability to implement new technologies and processes, the company's ability to attract, train and retain highly-qualified associates, unanticipated weather conditions, and the impact of competition and regulatory and litigation matters. Undue reliance should not be placed on such forward- looking statements, as such statements speak only as of the date on which they are made. Additional information regarding these and other risks is contained in the company's periodic filings with the Securities and Exchange Commission.

                             THE HOME DEPOT, INC.
                     CONSOLIDATED STATEMENTS OF EARNINGS
                  FOR THE THREE MONTHS AND SIX MONTHS ENDED
                      AUGUST 1, 2004 AND AUGUST 3, 2003
                                 (Unaudited)
      (Amounts in Millions Except Per Share Data and as Otherwise Noted)

                                             %                          %
                          3 Months Ended  Increase   6 Months Ended  Increase
                          8-1-04  8-3-03 (Decrease)  8-1-04  8-3-03 (Decrease)

    NET SALES             $19,960  $17,989   11.0 %  $37,510  $33,093   13.3 %
    Cost of Merchandise
     Sold                  13,299   12,384    7.4     25,081   22,659   10.7
      GROSS PROFIT          6,661    5,605   18.8     12,429   10,434   19.1

    Operating Expenses:
      Selling and Store
       Operating            3,854    3,247   18.7      7,580    6,357   19.2
      General and
       Administrative         350      292   19.9        646      563   14.7
         Total Operating
          Expenses          4,204    3,539   18.8      8,226    6,920   18.9

      OPERATING INCOME      2,457    2,066   18.9      4,203    3,514   19.6

    Interest Income
     (Expense):
      Interest and
       Investment Income       14       15   (6.7)        24       27  (11.1)
      Interest Expense        (17)     (16)   6.3        (31)     (34)  (8.8)
         Interest, net         (3)      (1) 200.0         (7)      (7)   0.0

    EARNINGS BEFORE
     PROVISION FOR
     INCOME TAXES           2,454    2,065   18.8      4,196    3,507   19.6

    Provision for Income
     Taxes                    909      766   18.7      1,553    1,301   19.4
      NET EARNINGS         $1,545   $1,299   18.9 %   $2,643   $2,206   19.8 %

    Weighted Average
     Common Shares          2,207    2,295   (3.8)%    2,225    2,294   (3.0)%

    BASIC EARNINGS PER
     SHARE                  $0.70    $0.57   22.8 %    $1.19    $0.96   24.0 %

    Diluted Weighted
     Average Common Shares  2,214    2,302   (3.8)%    2,232    2,300   (3.0)%

    DILUTED EARNINGS PER
     SHARE                  $0.70    $0.56   25.0 %    $1.18    $0.96   22.9 %


    SELECTED HIGHLIGHTS          Three Months %Increase   Six Months %Increase
                                    Ended     (Decrease)    Ended   (Decrease)
                                8-1-04  8-3-03          8-1-04  8-3-03
    Number of Customer
     Transactions (1)              359     350   2.6 %     675     646   4.5 %
    Average Ticket (1)          $54.73  $50.60   8.2    $54.91  $50.92   7.8
    Weighted Average Weekly
     Sales per Operating Store
     (000's) (1)                  $860    $861  (0.1)     $818    $805   1.6
    Square Footage at End of
     Period (1)                    190     173   9.8       190     173   9.8
    Capital Expenditures          $857    $915  (6.3)   $1,537  $1,671  (8.0)
    Depreciation and Amortization $324    $257  26.1 %    $636    $505  25.9 %

     (1) Excludes all subsidiaries operating under The Home Depot Supply brand
         (Apex Supply Company, Maintenance Warehouse, Your "other" Warehouse,
         White Cap Industries and HD Builder Solutions Group) since their
         inclusion may cause distortion of the data presented due to
         operational differences from our retail stores. The total number of
         the excluded locations and their total square footage are immaterial
         to our total number of locations and total square footage.


                              THE HOME DEPOT, INC.
                             SUPPLEMENTAL SCHEDULE
                             IMPACT OF EITF 02-16*
            FOR THE QUARTERS ENDED AUGUST 1, 2004 AND AUGUST 3, 2003
                                   (Unaudited)
       (Amounts in Millions Except Per Share Data and as Otherwise Noted)

                                            Impact
                                     As      of       As       As       %
                                  Reported  EITF   Adjusted Reported Increase
                                  8-1-2004  02-16* 8-1-2004 8-3-2003(Decrease)
    COST OF MERCHANDISE SOLD       $13,299  $(244) $13,543  $12,384    9.4 %
    GROSS PROFIT                     6,661    244    6,417    5,605   14.5
    SELLING AND STORE OPERATING
     EXPENSES                        3,854    285    3,569    3,247    9.9
    OPERATING INCOME                 2,457    (41)   2,498    2,066   20.9
    NET EARNINGS                     1,545    (27)   1,572    1,299   21.0
    DILUTED EARNINGS PER SHARE       $0.70 $(0.01)   $0.71    $0.56   26.8 %

     * The table includes only those line items in the Consolidated Statements
       of Earnings impacted by the adoption of EITF 02-16.

    In January 2004, the Company adopted EITF 02-16 "Accounting by a Customer
    (Including a Reseller) for Certain Consideration Received from a Vendor."
    The impact in the second quarter of fiscal 2004 in connection with the
    adoption of EITF 02-16 resulted in a reduction of Cost of Merchandise Sold
    of $244 million, an increase in Selling and Store Operating Expenses of
    $285 million and a reduction of Net Earnings of $27 million.  The impact
    on the Company's Diluted Earnings per Share was $0.01 per share in the
    second quarter of fiscal 2004 and $0.03 per share in the first quarter of
    fiscal 2004.  The Company estimates that the impact on its Diluted
    Earnings per Share for the full fiscal year 2004 will be $0.05 per share.
    The Company expects to recognize the remaining $0.01 per share in the
    third quarter of fiscal 2004.


                              THE HOME DEPOT, INC.
                           CONSOLIDATED BALANCE SHEETS
            AS OF AUGUST 1, 2004, AUGUST 3, 2003 and FEBRUARY 1, 2004
                              (Amounts in Millions)

                                              8-1-04      8-3-03      2-1-04
                                          (Unaudited) (Unaudited)   (Audited)

     ASSETS
       Cash and Cash Equivalents              $3,672      $5,209      $2,826
       Short-Term Investments                    -            45          26
       Receivables, net                        1,541       1,379       1,097
       Merchandise Inventories                 9,857       8,621       9,076
       Other Current Assets                      397         313         303
          Total Current Assets                15,467      15,567      13,328

       Property and Equipment, net            20,961      18,263      20,063
       Other Assets                            1,903         782       1,046
          TOTAL ASSETS                       $38,331     $34,612     $34,437

     LIABILITIES AND STOCKHOLDERS' EQUITY
       Accounts Payable                       $7,603      $5,875      $5,159
       Accrued Salaries and Related Expenses     953         873         801
       Other Current Liabilities               4,371       3,641       3,594
          Total Current Liabilities           12,927      10,389       9,554

       Long-Term Debt                          1,124       1,327         856
       Other Long-Term Liabilities             1,830         963       1,620
          Total Liabilities                   15,881      12,679      12,030

       Total Stockholders' Equity             22,450      21,933      22,407
          TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY              $38,331     $34,612     $34,437

SOURCE The Home Depot