Home Depot profit drops 26.8% in Q3 on Home Services

Jan

Home Depot profit drops 26.8% in Q3

posted by admin in Home Depot

The Home Depot Inc.s sales and bottom line continued to erode in the third quarter, as the housing market continued its deterioration.

The Atlanta-based home improvement retailer had net income of $1.1 billion on $19 billion in sales, compared with net income of $1.5 billion on $19.6 billion in sales in the third quarter of 2006. Third-quarter earnings fell 17.8 percent to 60 cents a share.

The 3.5 percent decrease in sales reflects negative comparable store sales of 6.2 percent, offset in part by sales from new stores. The average customer ticket in the third quarter was down 1.5 percent to $57.48. Home Depot has five stores in the Albuquerque metro market and one in Rio Rancho.

We are facing a tough environment as housing indicators continue to deteriorate, said Frank Blake, chairman and CEO. Our financial performance in the third quarter reflects these tough conditions. But we are making significant improvements in our business and we will continue to invest thoughtfully for the long-term health of the company.

Home Depot (NYSE: HD) said it remains committed to the $22.5 billion stock buy-back program it announced in June. Home Depot said it has to date bought back $10.7 billion in shares. But because of the volatility in the credit markets and the challenging housing and home improvement markets, the company said it will be cautious completing the recapitalization until a more positive environment develops.

At the end of the third quarter, Home Depot had 2,224 retail stores, which included 1,943 Home Depot stores in the U.S., 160 stores in Canada, 64 stores in Mexico and 12 stores in China. The company also operated 34 EXPO Design Center locations and 11 The Home Depot Landscape Supply stores.