Big Boxes Report Dismal And Less Dismal Earnings

Just months after a huge management shakeup, Home Depot turned in a dismal report card yesterday--with fourth-quarter earnings falling to $925 million, down from $1.3 billion in the same period in fiscal 2005. Sales for the period gained 4%, to $20.3 billion.

In its retail division, sales fell 2% to $17.4 billion, and comparable store sales--the number most closely watched by observers--tumbled 6.6% in the fourth quarter. Sales in its HD Supply segment, which the company has said it is considering selling, grew by 64%, to $2.9 billion.

Calling the results "disappointing," the company said it is "encouraged as we head into spring with an expanded assortment in outdoor power equipment, landscape products and a new patio and grill lineup. In 2007 customers will see us focus on product excitement and creating a compelling value proposition in our stores."

The news was better--but not great--from Bentonville, Ark. Wal-Mart Stores Inc., which reported record sales and earnings for the quarter, primarily because of strong international results. Overall, sales for the fourth quarter were $98.1 billion--an increase of 11% over the fourth quarter of fiscal year 2006. And for the fiscal year ended Jan. 31, 2007, sales hit $345 billion--an increase of 12% over fiscal year 2006.



Total U.S. comparable store sales for the fourth quarter increased 1.6%, which is represented by a 1.3% increase for Wal-Mart Stores and a 3.1% increase for Sam's Club. For the first quarter, the company said that it expects U.S. comparable store sales to increase in the range of 1 to 3%.

The company said the results are proof that low prices haven't lost their appeal. "It's a reaffirmation of the proposition that's synonymous with Wal-Mart--saving people money so they can live better," said the company. "Sam Walton started our Company in 1962 with this simple principle. And this is the mission that drives our strategy around the world today."

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