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U.S. :Home Depot Profits Climb 35 Percent |
| Home Depot Profits Climb 35 Percent Associated Press - JUSTIN BACHMAN AP Business Writer May 21, 2002 ATLANTA (AP) - The Home Depot Inc., the nation's largest home improvement retailer, reported a 35 percent jump in first-quarter profits as balmy spring weather in many areas spurred Americans' purchases of paint, lumber as well as lawn and garden products. The results, announced Tuesday, beat Wall Street expectations, and came a day after rival Lowe's Cos., the nation's No. 2 home improvement retailer announced a 53 percent jump in first-quarter profits, well exceeding Wall Street expectations. Home Depot said it earned $856 million, or 36 cents a share, in its first quarter ended May 2. That compares to $632 million, or 27 cents per share, in the year-ago period. Analysts polled by Thomson Financial/First Call expected 33 cents per share. Sales for the quarter soared 17 percent to $14.3 billion. Sales at stores open at least a year, known as same-store sales, were up 5 percent. But that was short of the 7.5 percent increase in same-store sales that Lowe's reported on Monday. Home Depot's sales ``were very good results on a stand-alone basis, but mildly disappointing results on a relative basis,'' to Lowe's, J.P. Morgan analyst Danielle Fox said. In afternoon trading on the New York Stock Exchange, Home Depot shares were down 6.6 percent, or $3.18 a share, at $45.32. Atlanta-based Home Depot opened a record 57 new stores during the quarter, including its first smaller, urban retail location in Brooklyn, N.Y. Others are planned in Chicago and Staten Island, N.Y. The smaller stores - 50,000 square feet to 80,000 square feet smaller than a traditional Home Depot - ``gives us many more arrows in our quiver,'' Robert Nardelli, Home Depot's president, chairman and chief executive, said in a conference call. The new stores helped sales increase 17 percent, to $14.3 billion from $12.2 billion in the same period of 2001. But analysts were concerned by the more substantive comparable sales of only 5 percent, said Alan Rifkin, a Lehman Brothers analyst. ``The thinking is, Lowe's is taking (market) share from Home Depot,'' he said. ``While by many metrics, Home Depot has the stronger balance sheet, quite often Wall Street rewards the player who has the better incremental growth. Lowe's is doing a great job of catching up with Home Depot in the urban markets.'' Home Depot officials conceded they are wary about the economy's strength through 2002 and predicted sales will slow slightly from first-quarter levels. The company is expecting sales growth of 2 percent to 4 percent in the second quarter. On Monday, Lowe's executives said same-store sales are likely to increase 4 percent to 6 percent in the second quarter. But Home Depot is enjoying ``its strongest financial condition ever,'' Nardelli said in a statement, citing the company's $5.2 billion in available cash, more than $19 billion in equity and a debt-to-equity ratio under 7 percent. The company also said it was comfortable with analyst forecasts of 47 cents-per-share earnings in the second quarter. Home Depot has 296,000 employees and 1,386 stores in the U.S., Canada and Mexico. On the Net: http://www.homedepot.com |
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