Home Depot Sees Declines, Updates Outlook
By Cecile B. Corral -- Home Textiles Today, 11/23/2009 12:00:00 AM
Citing “a great deal of pressure” in the housing and home improvement markets, the Home Depot reported declines in net earnings, sales and comps in its third quarter.
Net earnings for the third quarter, ended Nov. 1, fell 8.8% to $689 million or $0.41 per share, compared to $756 million or $0.45 per share in the year-ago period.
Sales for the third quarter totaled $16.4 billion, representing an 8.0% decline from last year’s third quarter. Comparable store sales were down 6.9%, and comp sales for U.S. stores were negative 7.1%.
Craig Menear, evp, merchandising, said that the departments that outperformed the company average comp in the quarter were paint, plumbing, flooring, gardening, kitchen and bath, and building materials. Underperformers included lumber, hardware, electrical and millwork.
He added that Home Depot “continued to see strength in DIY repair and simple remodel projects.” However, typical pro and construction categories like plywood performed below the company average.
Even though Home Depot faced a difficult economy in the third quarter, the 1,975-unit home improvement chain did see “some positive signs of stabilization,” said Frank Blake, chairman and ceo. “We grew market share in the quarter, continued to transform our business and improved customer service.”
For the first nine months of the year, sales dipped 9.0% to $51.6 billion from $56.68 billion in the same period last year. Net income was essentially flat at $2.3 billion, up 0.2%.
Based on its year-to-date performance, the company continues to expect sales to decline approximately 9% for the year. Home Depot updated its fiscal 2009 EPS guidance and now expects diluted earnings per share from continuing operations of about $1.50, up 9.5% from fiscal 2008. On an adjusted basis, the company now expects earnings per share from continuing operations of approximately $1.55 for the year, a decline from fiscal 2008 of approximately 13%.
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