Home Depot earnings hammered
Home Depot posted a 66% drop in quarterly profit Tuesday, as it paid to close stores and cut back on expansion plans amid the housing slump, although the results topped analysts’ forecasts.
The world’s largest home improvement retailer said its net income fell to $356 million, or 21 cents per share, from $1.05 billion, or 53 cents per share, in the year-earlier period.
Excluding one-time expenses of $543 million involved in the closing of 15 stores, Home Depot (HD, Fortune 500) reported profit of $697 million, or 41 cents a share.
Analysts surveyed by Thomson Financial had been looking for earnings of 37 cents per share on that basis.
Sales fell 3.4% to $17.9 billion, but narrowly beat Wall Street’s expectations for revenue of $17.6 billion.
"The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country," said Frank Blake, chairman and CEO, in a statement.
Home Depot not only announced plans to close 15 stores during the quarter, but also to remove 50 stores from the future growth pipeline.
Home Depot’s sales were boosted by a calendar shift that favored seasonal benefits. The first quarter included the week from April 29 to May 4, which is a strong week in lawn and garden sales, adding $524 million to sales, Home Depot chief financial officer Carol Tom
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