Home Depot to Ease Growth, Spending

By Staff -- Home Textiles Today, 5/5/2008 12:00:00 AM

Atlanta —

Home improvement retailer The Home Depot will trim its square-footage growth outlook, in a new plan aimed at upping cash flow.

Besides cutting 50 future stores from its "new store pipeline," Home Depot will close 15 underperforming stores this year.

Reiterating its intention to open 55 new stores for 2008, including 36 new stores in the United States, the 2,258-store retailer said it will still grow square footage by 1.5% per year starting in 2009.

The new strategy will cut about $1 billion out of capital spending over the next three years.

Home Depot noted that total capital spending for the current fiscal year is projected at $2.3 billion, down from $3.6 billion last year.

From this new plan and other measures, $77 billion Home Depot will recognize a charge of about $586 million in 2008 — and even before that charge, the company has projected a 19% to 24% drop in diluted earnings per share from continuing operations for fiscal 2008.