The Home Depot Announces Third Quarter Results on Home Services

Jan

The Home Depot Announces Third Quarter Results

posted by admin in Home Depot

PRNewswire-FirstCall via COMTEX News Network/ — The Home Depot(R), the world’s largest home improvement retailer, today reported fiscal 2007 third quarter consolidated net earnings of $1.1 billion, or $0.60 per diluted share, compared with $1.5 billion, or $0.73 per diluted share, in the same period in fiscal 2006.

Earnings from continuing operations in the fiscal 2007 third quarter were $1.1 billion, or $0.59 per diluted share, compared to fiscal 2006 third quarter earnings from continuing operations of $1.3 billion, or $0.65 per diluted share. Sales for the third quarter totaled $19.0 billion, a 3.5 percent decrease from the third quarter of fiscal 2006, reflecting negative comparable store sales of 6.2 percent, offset in part by sales from new stores.

The sale of HD Supply was completed on August 30, and the Company reflects the results of HD Supply as a discontinued operation. Therefore, the operating results and financial impact of the sale of HD Supply are listed as a one-line item on the income statement (”earnings from discontinued operations”). Earnings from discontinued operations were $20 million, or $0.01 per diluted share for the third quarter of fiscal 2007.

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

“I want to thank our associates, who continue to make great progress in executing our key priorities as well as our vendor partners for their support in this tough selling environment,” said Blake.

Fiscal Year 2007 Financial Outlook

Given that the softness in the housing market is expected to continue for the rest of 2007 and the Company’s commitment to invest in its key retail priorities, The Home Depot expects its earnings per share from continuing operations, on a 52-week basis, will decline by as much as 11 percent from last year. The fiscal 2007 earnings per share outlook reflects 52 weeks and does not include the impact of the 53rd week. The Company will have 53 weeks of operating results in fiscal 2007. The Company projects that the 53rd week will add approximately five cents to its earnings per share outlook for fiscal 2007.

Recapitalization Plan

The Home Depot remains committed to the $22.5 billion recapitalization plan announced in June. Since that time, the Company has completed almost half, or $10.7 billion, of the recapitalization plan. Due to the volatility in the credit markets as well as the challenging housing and home improvement markets, the Company believes it is prudent to take a cautious stance regarding the completion of the recapitalization until a more positive environment develops.

The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at homedepot.com in the Investor Relations section.

At the end of the third quarter, the Company operated a total of 2,224 retail stores, which included 1,943 The Home Depot stores in the United States (including the Commonwealth of Puerto Rico and the territory of the U.S. Virgin Islands), 160 stores in Canada, 64 stores in Mexico, and 12 stores in China. The Company also operated 34 EXPO Design Center(R) locations, and 11 The Home Depot Landscape Supply(R) stores. The Company employs approximately 350,000 associates. The Home Depot’s stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor’s 500 index. HDE

Certain statements contained herein, including any statements related to comparable store sales, the state of the home improvement market, the state of the construction and housing markets, the planned recapitalization of the Company, continuation of reinvestment plans and earnings per share guidance for fiscal 2007, constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on currently available information and are based on our current expectations and projections about future events. These risks and uncertainties include, but are not limited to: economic conditions in North America; conditions affecting customer transactions and average ticket, including, but not limited to, weather conditions; ability to successfully complete the planned recapitalization of the Company; ability to issue debt securities on terms and at rates acceptable to us; and improving and streamlining operations and customers’ in-store experience. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. Additional information regarding these and other risks and uncertainties is contained in our periodic filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended January 28, 2007.