Hurtin' Home Depot Lowers Its Forecast

  • November 14, 2007
Still getting pounded by the struggling U.S. housing market, The Home Depot says its third-quarter sales fell to $19 billion, a 3.5% decrease from the same period last year. And on a comparable-stores basis, sales sank 6.2%. It also lowered its outlook, and now expects earnings will tumble by as much as 11% from last year. In a conference call, company execs say they started the year pessimistically, "but not pessimistic enough."

Results were worst in areas most affected by the poor housing markets, with sales in such Florida markets as Fort Myers and Naples down 20%. In stronger areas, such as Austin, Dallas and San Antonio, Texas, sales results have been positive.

The company says it had negative sales growth in all departments in the quarter except kitchens, which was driven by appliances. Within those declines, some departments did perform better than the company average, including plumbing, kitchen and bath, garden, paint and hardware.

On the flip side, lumber, millwork, lighting and building materials underperformed. And while it lost market share in many areas, it did gain some in paint, appliances and power tools. One bright spot--literally--is Christmas spangles: The company predicts it will be the No. 4 retailer in U.S. holiday decor sales, "with double-digit year-over-year growth."

For the year, the company projects its comparable store-sales will be down between 6 and 7%.

--Sarah Mahoney



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