Home Depot Q3 earnings down 30.7 percent
Home Depot posted third-quarter net earnings of $756 million, a decline of 30.7 percent from the same period last year. Comp-store sales in the quarter for the world’s largest home improvement retailer declined 8.3 percent, as total sales dropped 6.2 percent to $17.8 billion.
“The housing and home improvement markets remain challenging,” said Frank Blake, chairman & CEO. “Across our entire business, we are making the adjustments necessary to respond to a tough market environment. We are carefully controlling our discretionary spending, scrutinizing every dollar in capital, and, most important, intensifying our focus on our customers.”
The company said it now believes that its fiscal 2008 sales could be down as much as 8 percent for the year.
Craig Menear, executive vp-merchandising, said Home Depot experienced negative comp-store sales in all categories except building materials, which was driven by strong sales in roofing and insulation — although some of the dollar gains in roofing could be attributed to the increase in petroleum costs.
Other departments that outperformed the company average were plumbing, hardware and lawn and garden, while categories that underperformed the company average included kitchen and bath, millwork, electrical, lumber and flooring. Paint performed at the company’s average comp.
From a regional perspective, northern areas like the Northern Plains and Ohio Valley performed above the company average, while the southern states of Texas, Oklahoma and Louisiana saw an increase of $125 million in incremental sales largely attributable to Hurricanes Gustav and Ike.
In addition, average ticket was down $1.62, or 2.8 percent, from the same quarter last year to $55.86. The company saw a decline in big-ticket sales, with special order kitchens down 30 percent versus last year. Total company transactions were 315 million, down 3.4 percent year-over-year, although Menear said the company saw an improving trend during the last six weeks of the quarter.
“One of our ongoing initiatives has been to reduce promotions and refocus our efforts on being an everyday value provider as part of our portfolio strategy,” Menear said. “Our marketing campaign supporting our new lower prices reinforces the everyday value message.”
In the United States, six of 13 departments gained unit share, with strong gains in several categories, including insulation, carpeting, toilets, power tools and molding — the latter benefiting from the new regional approach to assortments and the addition of new POS that makes it “easier for the customer to shop,” Menear said.
Carol Tome, Home Depot’s chief financial officer, said the company anticipates a challenging sales environment in the fourth quarter, and she projects comps will be down about 8 percent for the year.
Do it Best names education services coordinator
Dave Heffley was recently named education services coordinator for Do it Best, the Fort Wayne, Ind.-based co-op announced.
In this position, Heffley will coordinate promotional materials and special events for the co-op’s buying markets and will be responsible for the coordination of educational classes and materials to increase the awareness of and participation in Do it Best retail solutions.
Heffley joined Do it Best in 1994 as an account specialist and installer for the Retail Data Processing support department. Prior to that, he was a sales representative with John Hancock Insurance and with Monroe Systems.
In addition, Heffley has been actively involved with Do it Best’s employee board, organizing special events and activities for corporate office employees.
Ainsworth reports Q3 loss
Vancouver, B.C.-based forest products company Ainsworth Lumber reported a net loss of C$42.7 million (US$34.6 million) for the third quarter ended Sept. 30, compared to a net loss of C$37.2 million (US$30.2 million) for the same period last year.
Sales for the quarter stood at C$115.3 million (US$93.5 million), down 24 percent from C$150.8 million (US$122.2 million) in the year-ago period. According to the company, reduced shipment volumes due to production curtailments led to the decrease in sales.
Year to date, the company reported a net loss of C$165.1 million (US$133.7 million), a C$133.1 million increase in losses from the same period in 2007.
In July, Ainsworth completed a financial recapitalization, resulting in the “realignment of equity and non-equity interests, significant de-leveraging of the balance sheet and a strengthened liquidity position.” Following the recapitalization, the company’s management team moved to lower overhead costs with a decrease in staff, office space and administrative costs.
Third-quarter OSB shipments were 481,354 msf , down 25 percent from the same period last year, due to decreased customer demand and plant closures. The company permanently closed its Grand Rapids, Minn., OSB mill and indefinitely curtailed production at two other northern Minnesota-based OSB mills in Cook and Bemidji.