For many companies, first quarter net earnings of $1 billion would be cause for celebration. But for Atlanta-based Home Depot, Inc., the numbers represent a 30-percent decrease in profit compared to the same period in 2006.
Frank Blake, Home Depot chief executive, pointed to the current soft housing market and erratic weather across the United States as major contributors for the revenue decline. The conditions, he stated, “negatively affected our spring selling season.”
Sales for the first quarter totaled $21.6 billion, less than a one percent increase from the first quarter of fiscal 2006, but total sales in the retail segment declined 4.3 percent to $18.5 billion. Comparable store sales declined 7.6 percent. Total sales in the company’s HD Supply segment grew by 46 percent to $3.1 billion, reflecting sales from acquired businesses.
At the beginning of 2007, Home Depot predicted an earnings per share decline of 4- to 9-percent. Based on first quarter performance, Blake believes that “The home improvement market will remain soft throughout 2007.”
Home Depot now predicts it will be at the low end of its earnings forecast for the year.
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