Home Depot reports 10 percent jump in earnings
ATLANTA (AP) – The Home Depot Inc., the nation’s largest home improvement chain, reported a nearly 10 percent jump in fourth-quarter earnings on solid sales, particularly at stores open at least a year. The Atlanta-based company’s results, announced before the market opened Tuesday, met Wall Street expectations.
Home Depot shares fell 67 cents, or 1.6 percent, to $41.35 in early trading on the New York Stock Exchange, as the overall market declined broadly.
For the three months ending Jan. 30, Home Depot said it earned $1.04 billion, or 47 cents a share, compared to a profit of $951 million, or 42 cents a share, in the same period a year ago.
Analysts surveyed by Thomson First Call were expecting earnings of 47 cents a share in the quarter. Revenue in the quarter was $16.81 billion, an 11.2 percent increase from the $15.13 billion recorded a year ago. Same-store sales – a measure that compares sales at stores open at least a year – increased 4.6 percent in the quarter and 5.4 percent for the year. The total for the year was the company’s highest since 1999. The company said it has benefited from new products and by increasing market share in appliance sales. It also is continuing to modernize the look of stores.
Home Depot has announced several hiring initiatives in recent months and reiterated its plans to expand to China, though it hasn’t said when it will open its first store there. The latest hiring initiative seeks Hispanics, especially those who are bilingual, for full- and part-time jobs.
“The morale and alignment among our associates has never been higher,” chief executive Bob Nardelli told analysts in a conference call Tuesday.
Home Depot currently has 325,000 employees and 1,890 stores in the United States, Canada and Mexico.
Nardelli said the company spent $1 billion on store modernization in fiscal 2004.
“We know that there is plenty of room for growth,” Nardelli said.
He added, “It is evident that our strategy is working.”
Going forward, chief financial officer Carol Tome reiterated the company’s expectation, which it initially provided in January, that its sales will increase 9 percent to 12 percent in 2005 and that earnings per share will increase 10 percent to 14 percent for the year.
She said the company has started the year on plan and she is confident it will meet its targets.
In fiscal 2004, the company’s average sales ticket increased 7.3 percent to $54.89. Customer transactions were 296 million for the fourth quarter, up 3.1 percent from a year ago. For the year, customer transactions were 1.3 billion, up 3.9 percent from the previous year.
For all of fiscal 2004, Home Depot said it earned $5 billion, or $2.26 a share, compared to a profit of $4.30 billion, or $1.88 a share, a year ago. Twelve-month revenue was $73.10 billion, compared to $64.82 billion a year ago.
Rival Lowe’s Companies Inc. of Mooresville, N.C., reports its fourth-quarter and year-end earnings on Wednesday.
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On the Net:
The Home Depot Inc.: www.homedepot.com
AP-ES-02-22-05 1002EST