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Home Depot says profit dropped 27.5 pct in fourth quarter

Home Depot says profit dropped 27.5 pct in fourth quarter

The Home Depot Inc. said Tuesday its fourth-quarter profit fell more than 27 percent and a dour housing market contributed to the first annual sales decline for the world's largest home improvement store chain.
The Atlanta-based company said sales and profits in 2008 are expected to worsen as far as continuing operations.
The home improvement industry has suffered as consumers put off renovations in the face of declining home values, lower sales and tighter credit requirements.
Chief Executive Frank Blake, noting that last year was one of the most difficult financially for Home Depot, told analysts during a conference call that the company is "still too often perceived as lagging in customer service."
Executives made clear they are moving away from strategies that they believe aren't working. Chief among them is robust new store growth.
Home Depot said it plans to open only 55 new stores this year. That's about half as many as it opened last year.
"We should be judged by the discipline we bring to executing on our key priorities and the discipline we bring to stepping away from activities that aren't priorities," Blake said.
Home Depot shares rose 41 cents to $29.23 in early trading Tuesday.
The company said it earned $671 million (euro451.12 million), or 40 cents a share, in the three months ending Feb. 3, compared with a profit of $925 million (euro621.89 million), or 46 cents a share, in the same period a year earlier.
Earnings per share from continuing operations in the quarter were 40 cents, compared with 42 cents a year earlier.
Analysts surveyed by Thomson Financial were expecting Home Depot earnings of 43 cents a share in the fourth quarter.
Despite an extra sales week, revenue in the quarter rose only 1.5 percent to $17.66 billion (euro11.87 billion), compared with $17.4 billion (euro11.7 billion) a year earlier. Excluding that extra week, fourth-quarter sales declined 4.7 percent compared with a year ago. Revenue for fiscal 2007 declined 2.1 percent to $77.35 billion (euro52 billion). Spokesman Ron DeFeo said that was the first ever annual sales decline for Home Depot.
Sales at stores open at least a year declined 8.3 percent in the quarter. The company's average sales ticket declined 2.3 percent to $54.96 (euro36.95) in the quarter, compared to $56.27 (euro37.83) a year ago.
Blake said 2008 will be challenging, though he said the company will continue to press on with its key priorities.
"We are focused exclusively on our retail business," Blake said.
The company said it expects to see a total sales decline in fiscal 2008 of 4 percent to 5 percent. It also is projecting a continuing operations earnings per share decline of 19 percent to 24 percent for the full year.
For all of fiscal 2007, Home Depot said it earned $4.4 billion (euro2.96 billion), or $2.37 (euro1.59) a share, compared to a profit of $5.76 billion (euro3.87 billion), or $2.79 (euro1.88) a share, for fiscal 2006. Its $77.35 billion (euro52 billion) in full-year sales compared to $79.02 billion (euro53.13 billion) a year earlier.
At the end of the fourth quarter, Home Depot operated 2,234 stores in the United States, Canada, Mexico and China.
Rival Lowe's Cos., based in Mooresville, N.C., reported Monday that its fourth-quarter profit dropped by a third. But it predicted that sales _ while still hurt by a soft housing market _ would improve slightly in 2008.
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On the Net:
http://www.homedepot.com


Updated : 2020-12-04 01:37 GMT+08:00