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Home Depot boosts 2010 guidance based on favorable 2Q results

Sales up 1.8% in 2Q

Atlanta - Home improvement chain The Home Depot enjoyed its third consecutive quarter of positive same-store sales as well as modest inclines in net sales and net earnings, prompting the company to update its fiscal 2010 guidance.

Sales for the second quarter totaled $19.4 billion, representing a 1.8% increase from a year ago's $19.1 billion.

Comparable store sales for the total company came in at 1.7%, and comp sales for U.S. stores were positive 1.0%.

Net earnings were $1.2 billion, or $0.72 per diluted share, compared with net earnings of $1.1 billion, or 66 cents per diluted share, in the same 2009 period.

For the quarter, the number of customer transactions grew 1.9%. However, the actual average ticket remained essentially flat -- $52.30 versus $52.25 a year ago.

For the first half of 2010, net sales increased by 2.9% to $36.27 billion versus $35.24 billion, and net earnings rose 17.6% to $1.91 billion from $1.63 billion.

While the number of customer transactions year to date rose by 3.0% to 692 from 672, actual average ticket decline 1.0% to $52.41 from $52.45.

"We delivered solid results as we continue to build momentum with our merchandising transformation, supply chain enhancements and customer service initiatives," said Frank Blake, chairman and ceo. "I want to thank our associates for their hard work and dedication, and I am proud to announce 97% of our stores qualified for success sharing, our bonus plan for hourly associates, for the first half of fiscal 2010."

Encouraged by the strides it made in the second quarter, The Home Depot - which operates 2,224 total stores of which 1,976 are in the U.S. and its territories -- updated its fiscal 2010 guidance and now expects sales to be up approximately 2.6% for the year. The company also said it expects diluted earnings per share from continuing operations as reported to increase by about 22.6% to $1.90 for the year. This earnings per share guidance includes the benefit of the company's year-to-date share repurchases, but excludes the impact of future share repurchases.

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