Home Depot Customers Getting Stingier, Profits Sinking

CHICAGO — The Home Depot Inc. said Tuesday that its second-quarter profit sank 24 percent and reiterated its downbeat outlook for the year amid a weak housing market that shows no signs of recovery.

For the three-months ending Aug. 3, the nation's largest home improvement chain said its net income fell to $1.2 billion, or 71 cents per share. That's down from $1.59 billion, or 81 cents per share, during the same period last year.

Meanwhile, revenue slid 5.4 percent to $21 billion, down from $22.2 billion last year. And same-store sales, an important retail industry metric of sales at stores opened at least a year, fell 7.9 percent.

The results handily beat expectations as do-it-yourselfers began to take their hammers and paint brushes out of retirement. Analysts surveyed by Thomson Reuters had projected earnings of 61 cents per share on revenue of $20.58 billion.

Goldman Sachs analyst Matthew Fassler told investors in a research note that the better-than-expected results indicate a "reprieve" from an earlier slowdown by shoppers who postponed projects as the nation's housing market slows.

"These results confirm that the DIY market received a reprieve from some combination of better weather, fiscal stimulus, and a floor in demand," he wrote.

Still, the results paint a grim picture of the cost-conscious American consumer, and Home Depot shares fell 56 cents, or 2 percent, to $26.40 in midday trading.

The company said comparable sales were negative for each of the company's selling departments and the average spending per customer in a visit fell 1.2 percent to $57.58.

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But a bright spot was basic repair jobs that are shoppers are undertaking, even as bigger-ticket purchases continue to fall, executives said.

"Customers are spending to maintain their homes," said Craig Menear, Home Depot's executive vice president of merchandising.

Amid so much economic uncertainty, Home Depot said it expects earnings per share from continuing operations to decline by 24 percent for the year. The company had said in May that it felt "more comfortable" that it would meet the low end of its full-year guidance for a drop of 19 percent to 24 percent in earnings per share, but did not elaborate.

The earnings per-share guidance does not include the company's charge related to the closing of 15 stores and its reduction of 50 stores from its future expansion plan, the company said.

Home Depot also projects that full-year sales should decline by 5 percent.

"As we look forward into the second half of the year, we see continued pressure on our markets," Chief Executive Frank Blake told investors during a conference call.

Home Depot's results come on the heels of better-than-expected second-quarter results from competitor Lowe's Cos. Inc.

The Mooresville, N.C.-based company said second-quarter profit fell nearly 8 percent, but managed to top Wall Street expectations. The company offered a weaker-than-expected outlook for the third quarter, but raised its guidance for the full year.

Comments

[Blatchford]

Home Depot CEO, Frank Blake Implicated In Employee Abuse and Retaliation Lawsuit

A recent case, # 08-5833-CI-019, filed in the Sixth Judicial Circuit Court of Pinellas County, Florida alleges numerous instances of employee abuse including; harassment, falsification of company documents, forgery and retaliation.

Store, district and corporate level management up to and including CEO Frank Blake were aware of, and in numerous instances, participated in the alleged abuses, cover-ups and retaliatory actions.



IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT
IN AND FOR PINELLAS COUNTY, FLORIDA
CIVIL LAW DIVISION


ROBERT E. BLATCHFORD,
Plaintiff,

CASE NO.: 08-5833-CI-019

v.

HOME DEPOT U.S.A., INC.,
a Foreign Corporation,
Defendant.
__________­__________­__________­________/


Respectfully submitted,
SPARKMAN & SPARKMAN, P.A.

By: __________­__________­__________­__

Kevin M. Sparkman, Esquire

Florida Bar No. 721743

Shazia N. Sparkman, Esquire

Florida Bar No. 958921
2100 9th Street North Suite B

Saint Petersburg, Florida 33704
Tel. [phone]
Fax [phone]

Attorneys for Plaintiff

[SCG2]

He only assists in the destruction of America , not partakes in the results.

[SCG2]

^ wrong post sorry!

[SCG2]

The stimulus is petering out. Oh well, no disposable income, and no home, makes for fewer home improvement expenditures.

Maybe China will take up the consumer slack?

[taoist]

HD is just a pain. Picking up drywall and the personel run like deer, as Ralph Nader said and it is true " they cut personel and service and make you the employee as you load all your own stuff." The stores are a mess and as an earlier poster said they are always out of what you need. I only go there if they are the last resort.

[StanTheManic]

Too bad, particularly during the Olympics. It's one of the few American companies that puts its money where its mouth is and employs a lot of our Olympic hopefuls.

[fiduciaryatlarge]

Home Depot can expect to continue losing money because of their business practices. They consistently don't have what I am looking for, either they don't carry it anymore or they didn't reorder it in time. I go there as a last resort now and don't expect much.

[filo]

Meanwhile, revenue slid 5.4 percent to $21 billion, down from $22.2 billion last year.

OMG They lost 1.2 billion...­.....No they just made 1.2 billion less. Puhleese we are talking billions with a B here. Why do companies alway have to make huge amounts more than they did the year before or they are in trouble. Home Depot is still making huge profits folks.


Corporate greed is hurting the country. I have no problem with CEOs making big bucks but how much is enough. Many of them are making obscene money and it is clouding their judgment.

[Javarod]

I agree. Actually I'd be interested in seeing how TruValue and Ace (my place) are doing. I remember reading last year that on a square footage basis they were both beating Lowes and HD in profits, but no real surprise with how they run.

[thebeerdoctor]

Perhaps things will look so bad that Home Depot will call upon congress with a (made in China) tin cup firmly in hand. It seems that corporate jingoism is just not cutting it these days. The price for everything continues to rise, except wages. Sadly, the economic oligarchy continues to believe there is virtue in this trickle.

[totalliberal]

Did these corporations really think that if they paid people less and gave them fewer benefits they'd buy more stuff.
Bushenomics. Harrumph.

[racom]

Exactly right, 'stingy' equates to 'taped out'. No cash due to lost job or low wages, no credit left with all cards maxed out so now the customer is 'stingy'. Hell, maybe the customer no longer has a house to fix. This freakin country is in for a long, hard ride. On financials we have been leaderless for years now. Easy credit, bogus mortgages, and, I love to mix metaphors, 'the cows have come home to roost'!

[Swerinjer]

GOOD. they contribute a LOT to the repugnican party. boycott them while they're down.

[smokeystover39]

We went looking for a new range last month and visited the Sears Outlet - if the price was right and the imperfection (a) couldn't be seen, (b) didn't affect the operation/safety - why not save some bucks?? WRONG!! They had the perfect model with the convection oven, warming drawer and glass top. The dent/ding was in the back and couldn't be seen. OH BOY - let's buy. No-o-o because after adding up all the nickle/dime charges and a smart ass sales pimp we decided to check HD, then Lowes. HD - no selection even close to what we had seen at the Sears Outlet AND what was a distant second was pricey. Off to Lowes - voile' big selection, knowledgea­ble/friend­ly sales person, free delivery - and a super extended low cost warranty. Bottom line: the new range with all the features was within $50.00 of the Sears Outlet price AND no imperfections. So-o-o HD wise up - sales are out there but ya gotta earn 'em.

[darthdarcy]

Goldman Sachs is one of the reasons our economy is in the tank, they are one of the biggest manipulators of the Commodities and Futures in the Oil market...

Let Home Depot go complain to Congress and the Senate that the Oil speculators are destroying so many of America's businesses­..and it's economy..!

[gcallaghan]

I see half finished developments, some with framing exposed to the weather, some just empty slabs, and nobody working or buying. Hwy 50 at rush hour used to be crowded with tailgating one ton pickups. In the morning they rode heavy on their springs, much lighter in the evening.

That was before UU's economic sh!tstorm made landfall.

[Cos1]

Who came up with that heading. It's not stingier. It's choices. People can't refinance anymore every 3 months. The wasteful spending days have come to an end and now people have to repay all those debts. HD had to know that this day would come. Alot of stores got lazy. Expect more stores to follow this same pattern. Alot of them have employees that don't care, act like your interrupting their slow day, have too much attitude toward customers, aren't trained or just will not help customers. How many stores have you been to where the employee is on the cell phone or in a cluster talking and you are expected to wait while they finish their conversation or personal call to get service. More Stores are not kept as clean as they use to be and the merchandise is often overpriced or low quality or broken. Alot of the clothing and other merchandise is just down right ugly and people won't buy it. Stores got use to people not really paying attention because they had the money some were just buying to spend. Now people are more careful and some folks just don't have it.

[leftLibertarian]

Glad I dumped my shares.