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Home Depot cleans up in 3Q

The Home Depot Inc. rode a nearly 15 percent gain in sales and strong expense controls to record earnings in the third quarter. The nation's largest home improvement retail chain reported earnings of more than $1.1 billion for the quarter just ended, an increase of 22 percent over the 2002 third quarter

Third-quarter sales were $16.6 billion, or 14.7 percent better than in the third quarter of one year ago. Home Depot's same-store sales rocketed up 7.8 percent, the company's best quarterly performance in this statistic since the fourth quarter of 1999.

"Home Depot grew its share of the home improvement industry this quarter, as our sales increased by $2.1 billion, more than any other home-improvement retailer," said Bob Nardelli, the chain's chairman, president and chief executive officer. "We saw strength across the country and across the majority of our selling departments. In some of our most competitive markets, we posted double-digit comps driven by growth in the number of customer transactions and the amount of the average ticket.

Indeed, customer transactions hit about 313 million for the third quarter, or 9.4 percent ahead of last year's third quarter. The average ticket increased 4.9 percent, to $52.10. Sales per square foot reached $375.45, up 4.2 percent from a year ago.

In another boost for the bottom line, Home Depot cut 100 basis points from its selling, general and administrative expenses as a percentage of sales, to 20.3 percent.

Of particular interest was the increase in self-checkouts at Home Depot during the third quarter. At the end of the period, 760 stores had self-checkout stations and more than 40 million self-checkout transactions took place during the quarter. Nardelli predicted that these transactions would top 100 million by the first week of December.

The Home Depot Inc.

Qtr. 11/2 (x000) 2003 2002 % chg
Sales $16,598,000 $14,475,000 14.7
Operating income 1,823,000 1,496,000 21.9
Net income 1,147,000 940,000 22.0
Earnings per share 0.50 0.40 25.0
Average gross margin 31.3% 31.6%
SG&A percentage 20.3% 21.3%
Nine months 2003 2002 % chg
Sales 49,691,000 45,034,000 10.3
Operating income 5,337,000 4,735,000 12.7
Net income 3,353,000 2,978,000 12.6
Earnings per share 1.46 1.26 15.9
Average gross margin 31.4% 30.8%
SG&A percentage 20.7% 20.3%


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