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Home Depot 1Q profit rises on fewer charges

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[May 19, 2009]  ATLANTA, Ga. (AP) -- Home Depot Inc. said Tuesday that its fiscal first-quarter profit climbed 44 percent on fewer charges, and the nation's largest home improvement retailer beat Wall Street's expectations despite lower sales.

InsuranceThe quarterly results will likely cheer investors, who sent the market higher Monday after smaller rival Lowe's Cos. surpassed analysts' estimates with its first-quarter profit and boosted its full-year outlook.

Atlanta-based Home Depot earned $514 million, or 30 cents per share, for the quarter ended May 3, compared with $356 million, or 21 cents per share, a year ago.

Adjusted profit, which excludes results from its now closed Expo business, was 35 cents per share, down from adjusted profit of 41 cents a year earlier. Home Depot announced in January that it planned to shutter its 34 Expo Design Centers.

Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items, predicted earnings of 29 cents per share.

Prior-year results included $543 million in charges related to previously announced store closings and the shrinking of future store growth plans.

Quarterly sales dropped 10 percent to $16.18 billion as consumers reined in their spending because of the recession, but the results still beat analysts' forecast of $15.86 billion.

"Our markets, and the consumer in general, remain under pressure," Chairman and Chief Executive Frank Blake said in a statement.

Sales at stores open at least a year, known as same-store sales, fell 10.2 percent, with U.S. same-store sales down 8.6 percent.

Same-store sales are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

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Home Depot said the number of transactions during the quarter fell 1.3 percent, while the average ticket dropped 8.2 percent to $52.67.

Home Depot reiterated its guidance for a 7 percent drop in full-year earnings from continuing operations and a sales decline of 9 percent. The retailer anticipates a 2009 same-store sales decline in the high single digits.

Based on prior-year earnings from continuing operations of $2.31 billion and revenue of $71.29 billion, Home Depot is likely to report 2009 earnings of approximately $2.15 billion on sales of about $64.9 billion.

Analysts anticipate full-year profit of $1.35 per share on sales of $65.03 billion.

Home Depot operated 2,238 retail stores at quarter's end.

[Associated Press]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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