Fiscal 2021 was another record year for The Home Depot as we achieved the milestone of over $150 billion in sales.
This resulted in double-digit comp growth for fiscal 2021 on top of nearly 20% comp growth that we delivered in fiscal 2020.
We've grown the business by over $40 billion over the last two years.
For context, prior to the pandemic, it took us nine years from 2009 to 2018 to grow the business by over $40 billion.
Sales for the fourth quarter grew approximately $3.5 billion to $35.7 billion, up 10.7% from last year.
comps of positive 7.6%.
During the fourth quarter, our comp average ticket increased 12.3%.
Comp transactions decreased 3.8%.
Core commodity categories positively impacted our average ticket growth by approximately 185 basis points in the fourth quarter driven by inflation in lumber, building materials, and copper.
For example, in the fourth quarter alone, the pricing for framing lumber ranged from approximately $585 to over $1,200 per 1,000 board feet, an increase of more than 100%.
Big-ticket comp transactions or those over $1,000 were up approximately 18% compared to the fourth quarter of last year.
Sales leveraging our digital platforms grew approximately 6% for the fourth quarter and approximately 9% for the year.
Over the past two years, sales from our digital platforms have grown over 100%.
Our focus on delivering a frictionless, interconnected shopping experience is resonating with our customers as approximately 50% of our online orders were fulfilled through our stores in fiscal 2021.
1 retailer for home improvement, and we look forward to serving our customers in the busy spring selling season.
In the fourth quarter, total sales were $35.7 billion, an increase of approximately $3.5 billion or 10% -- 10.7% from last year.
Our total company comps were positive 8.1% for the quarter with positive comps of 7.3% in November, 10.2% in December, and 7% in January.
were positive 7.6% for the quarter with positive comps of 7.2% in November, 10.9% in December, and 5.4% in January.
All 19 U.S. regions posted positive comps, and Canada and Mexico, both posted double-digit positive comps in the fourth quarter.
For the year, our sales totaled a record $151.2 billion, with sales growth of $19 billion or 14.4% versus fiscal 2020.
For the year, total company comp sales increased 11.4%, and U.S. comp sales increased 10.7%.
In the fourth quarter, our gross margin was 33.2%, a decrease of approximately 35 basis points from last year.
And for the year, our gross margin was 33.6%, a decrease of approximately 30 basis points from last year, primarily driven by product mix and investments in our supply chain network.
During the fourth quarter, operating expenses were approximately 19.7% of sales, representing a decrease of approximately 120 basis points from last year.
Our operating leverage during the fourth quarter reflects comparisons against significant COVID-related expenses that we incurred in the fourth quarter of 2020 to support our associates, the anniversarying of $110 million of non-recurring expenses related to the completion of the HD Supply acquisition in the fourth quarter of 2020, and solid expense management for the quarter.
During the fourth quarter of fiscal 2021, we also incurred approximately $125 million of COVID-related expenses.
For the year, operating expenses were approximately 18.4% of sales, representing a decrease of approximately 170 basis points from fiscal 2020.
Our operating margin for the fourth quarter was approximately 13.5% and for the year was approximately 15.2%.
In the fourth quarter, our effective tax rate was 25.5% and for fiscal 2021 was 24.4%.
Our diluted earnings per share for the fourth quarter were $3.21, an increase of 21.1% compared to the fourth quarter of 2020.
Diluted earnings per share for fiscal 2021 were $15.53, an increase of 30.1% compared to fiscal 2020.
During the year, we opened seven new stores and added 14 new stores through a small acquisition, bringing our store count to 2,317 at the end of fiscal 2021.
Retail selling square footage was approximately 241 million square feet at the end of fiscal 2021.
Total sales per retail square foot were approximately $605 in fiscal 2021, the highest in our company's history.
At the end of the quarter, merchandise inventories were $22.1 billion, an increase of $5.4 billion versus last year.
And inventory turns were 5.2 times, down from 5.8 times from the same period last year.
During the fourth quarter, we invested approximately $830 million back into our business in the form of capital expenditures.
This brings total capital expenditures for fiscal 2021 to $2.6 billion.
During the year, we paid approximately $7 billion of dividends to our shareholders.
And today, we announced our board of directors increased our quarterly dividend by 15% to $1.90 per share, which equates to an annual dividend of $7.60.
And finally, during fiscal 2021, we returned approximately $15 billion to our shareholders in the form of share repurchases, including $4.5 billion in the fourth quarter.
Computed on the average of beginning and ending long-term debt and equity for the trailing 12 months, return on invested capital was 44.7%, up from 40.8% in the fourth quarter of fiscal 2020.
On average, homeowners' balance sheets continue to strengthen as the aggregate value of U.S. home equity grew approximately 35% or $6.5 trillion since the first quarter of 2019.
We adjust this dollar run rate for our historical seasonality to calculate our sales outlook for 2022.
Based on this approach and assuming there are no material shifts in demand, we calculate that sales growth and comp sales growth will be slightly positive for fiscal 2022.
We expect our 2022 operating margin to be flat to 2021.
And we would expect low single-digit percentage growth in diluted earnings per share compared to fiscal 2021.
Over the course of fiscal 2022, we plan to invest approximately $3 billion back into our business in the form of capital expenditures, in line with our annual expectation of approximately 2% of sales going forward.
We have a team of approximately 500,000 associates who are committed to the culture that our founders instilled in our business over 40 years ago.
1 retailer for home improvement.
We've seen several inflection points in our company's history, all spurred by a desire to maintain the growth mentality and entrepreneurial spirit created by Bernie and Arthur when they revolutionized the home improvement industry over 40 years ago.
Approximately 15 years ago, we pivoted from new stores as a driver of growth to growth driven by productivity.
We could have never predicted the more than $40 billion in growth since the end of 2019.
Aligned with these objectives, our goals are: first, to grow the business to $200 billion in sales, which represents incremental growth of approximately $50 billion from where we are today; and second, and just as importantly, deliver best-in-class operating profit dollar growth and return on invested capital.
Over the last two years, as we've grown by over $40 billion in sales, our addressable market has also grown.
We now estimate that our total addressable market in North America is greater than $900 billion.
We estimate that each of these respective customer groups represent about 50% of the total addressable market.
We also estimate that each of these important customer groups represent approximately 50% of our total sales.
For Pro, we believe this addressable end market is over $450 billion.
Within this end market, we believe our addressable maintenance, repair, and operations, or MRO space, has expanded to over $100 billion.
1 home improvement retailer across all of our geographies, we represent a relatively small part of a large and fragmented total addressable market that has expanded significantly over the past two years.
At this point, we saw their spend with The Home Depot grow to more than $100,000 annually but still for mostly unplanned immediate need purchases in store.
As a result, we've seen spend with this customer more than triple to over $300,000 annually.
We believe the ability to serve our Pros' planned and unplanned purchase occasions will be an important driver of growth as we work toward a $200 billion sales milestone.
When I think about our stores, I think about the tremendous amount of productivity over the years, all of which helped us achieve over $600 in sales per retail square foot in 2021.
As we set our sights on our goal of $200 billion in sales, we have many opportunities to improve freight flow throughout the store and drive further space optimization in SKU productivity.
When our founders started The Home Depot over 40 years ago, they transformed an industry.

Summary:
Sales for the fourth quarter grew approximately $3.5 billion to $35.7 billion, up 10.7% from last year.
comps of positive 7.6%.
In the fourth quarter, total sales were $35.7 billion, an increase of approximately $3.5 billion or 10% -- 10.7% from last year.
Our total company comps were positive 8.1% for the quarter with positive comps of 7.3% in November, 10.2% in December, and 7% in January.
were positive 7.6% for the quarter with positive comps of 7.2% in November, 10.9% in December, and 5.4% in January.
Our diluted earnings per share for the fourth quarter were $3.21, an increase of 21.1% compared to the fourth quarter of 2020.
And today, we announced our board of directors increased our quarterly dividend by 15% to $1.90 per share, which equates to an annual dividend of $7.60.
And finally, during fiscal 2021, we returned approximately $15 billion to our shareholders in the form of share repurchases, including $4.5 billion in the fourth quarter.
We adjust this dollar run rate for our historical seasonality to calculate our sales outlook for 2022.
Based on this approach and assuming there are no material shifts in demand, we calculate that sales growth and comp sales growth will be slightly positive for fiscal 2022.
We expect our 2022 operating margin to be flat to 2021.
And we would expect low single-digit percentage growth in diluted earnings per share compared to fiscal 2021.
Approximately 15 years ago, we pivoted from new stores as a driver of growth to growth driven by productivity.