Soft housing hampers Home Depot
August 14, 2007-- Home Textiles Today,
Atlanta -- The Home Depot today said it foresees softness in the home and housing markets going into 2008 as it reported a 10% drop in second quarter earnings.
Home Depot reported a profit of $1.6 billion, or 81 cents per diluted share, down 10% from $1.86 billion, or 90 cents per share.
Earnings from continuing operations for the period ended July 29 was $1.5 billion, or 77 cents per diluted share, compared to fiscal 2006 second quarter earnings from continuing operations of $1.7 billion, or $0.82 per diluted share.
The retailer is now reflecting the results of the HD Supply segment as a discontinued operation, which impacted earnings by $66 million, or 3 cent per diluted share. Last week, Home Depot announced that it was in discussions with affiliates of Bain Capital Partners, The Carlyle Group and Clayton, Dubilier & Rice, which may restructure the previously announced agreement for the sale of HD Supply.
Sales for the second quarter totaled $22.2 billion, down 1.8%, as comps fell 5.2%.
"While the challenging housing market continues to present us with a tough selling environment, our financial performance was in line with our expectations," said Frank Blake, chairman and ceo.
Home Depot reiterated its outlook: Earnings per share from continuing operations are likely to decline by 12-15% for fiscal 2007; and consolidated earnings per share are expected to decline by 15-18% for fiscal 2007.
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