Home Depot sees home improvement in Q3 and beyond
Riding an improving housing market around the country, Atlanta-based Home Depot posted third-quarter sales of $18.1 billion, up 4.6% from the same period last year. Comp-store sales increased 4.2% overall, and increased 4.3% in the United States.
Despite a charge of about $165 million to close seven stores in China, the company posted net earnings of $947 million, up 1.4% from $934 million in the year-ago quarter. On an adjusted basis, the company’s net earnings rose 23.3% to $1.1 billion, the company said.
The performance surpassed Wall Street expectations, and comes amid signs of a housing market recovery and improving prospects for spending on the home.
"Our third-quarter results were better than we expected and reflected. In part, what we believe is the start of the path toward the healing of the housing market," said Frank Blake, chairman and CEO.
Based on its performance through the third quarter, Home Depot updated its fiscal 2012 guidance and raised its sales growth guidance to be up approximately 5.2% for the year on a 53-week basis. The company expects fiscal 2012 diluted earnings per share to be up approximately 18% to $2.92 for the year.
At the end of the third quarter, the company had a total of 2,250 stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.
Frank Blake thanks hurricane-area employees
While pointing to sales and earnings growth in the third quarter, Home Depot CEO Frank Blake also thanked employees who continue to work in communities impacted by Hurricane Sandy in the Northeast.
"I particularly want to thank all of our associates who are helping the communities impacted by Hurricane Sandy," Blake said. "They are working under difficult circumstances, often with their own lives and homes disrupted by the storm, and their efforts exemplify our core values."
Estimates of Hurricane Sandy’s damage are in the neighborhood of $50 billion. Many people in New York and New Jersey remain displaced or without power, weeks after the storm’s initial touchdown.
Energizer announces restructuring program
Energizer Holdings has announced a multi-year restructuring plan designed to save the company approximately $200 million, improve profitability and drive long-term growth. The St. Louis, Mo.-based manufacturer expects that a substantial portion of the actions necessary to achieve the targeted savings should be completed by the end of fiscal 2014 and the total savings are expected to be fully realized in fiscal 2015.
These actions are expected to reduce the global workforce by more than 10%, or approximately 1,500 workers. The initiatives to be undertaken include:
Rationalize and streamline operations facilities in the household products division:
• Close Maryville, Mo., battery manufacturing facility;
• Close St. Albans, Vt., battery manufacturing facility;
• Close Tampoi, Malaysia, battery packaging facility;
• Streamline Asheboro, N.C., battery manufacturing and packaging facilities;
• Streamline Walkerton, Canada, packaging facility;
• Streamline lights manufacturing in China;
• Consolidate G&A functional support across the organization;
• Streamline the household products division product portfolio to enable increased focus on the core battery business;
• Streamline the marketing organization within the household products division;
• Optimize the go-to-market strategies and organization structures within the international markets;
• Reduce overhead spending including changes to benefit programs and other targeted spending reductions; and
• Create a center-led purchasing function to drive procurement savings.
The company said it is also looking at its international footprint, legal entity structure and global delivery of transactional services to identify and assess additional scale efficiencies. These assessments will be completed in the coming months.
Ward Klein, Energizer’s CEO, said in a prepared statement: "We believe that these changes enhance Energizer’s ability to continue to compete effectively in the personal care and household products categories. We have redesigned our short term and long term compensation structures to align the organization to achieve the targeted savings, increase return on invested capital and improve shareholder returns. We are fully committed to achieving targeted savings and will pursue these initiatives with urgency and focus.”
The company has created the position of VP global business transformation to oversee the execution of the multi-year program and named Brian Hamm, the current VP finance, household products, to the job. Hamm will report directly to the CEO.
Energizer Holdings is a consumer goods company operating globally in the broad categories of personal care and household products. Energizer’s household products division offers a range of portable power solutions, anchored by the Energizer and Eveready brands.