Faced with a “tough environment” in the third quarter ended Oct. 28, Atlanta-based Home Depot saw earnings and sales decline on a weak housing market, with comparable-store sales declining 6.2 percent.
Earnings at the nation’s largest home channel retailer fell 27 percent to $1.09 billion from $1.49 billion in the same period last year. Sales were down 3.5 percent to $18.96 billion from $19.65 billion in last year’s third quarter.
In a statement, CEO and chairman Frank Blake highlighted the difficulties faced by the retailer in a volatile credit and home-building market.
"We are facing a tough environment as housing indicators continue to deteriorate. Our financial performance in the third quarter reflects these tough conditions," Blake said. "But we are making significant improvements in our business, and we will continue to invest thoughtfully for the long-term health of the company."
The company anticipates an 11 percent earnings-per-share decline for the rest of the year, with continued softness in the housing market at least through the end of the fiscal year. Still, the company expects to add about 5 cents to its per-share earnings outlook, due to a 53-week operating schedule this year compared with a 52-week cycle last year.
During the third quarter, Home Depot completed the sale of its HD Supply unit to a group of investment firms. HD Supply now is listed as a discontinued operation -- the unit brought in earnings of $20 million in the third quarter.
Additionally, the company called into question the fate of a $22.5 billion recapitalization plan, of which $10.7 billion has been completed.
“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,” Home Depot said in a statement.
At the end of the quarter, the Atlanta-based retailer operated 2,224 retail stores in the United States, Canada, Mexico and China.