Home Depot to Ease Growth, Spending
May 5, 2008,
Home improvement retailer The Home Depot will trim its square-footage growth outlook, in a new plan aimed at upping cash flow.
Reiterating its intention to open 55 new stores for 2008, including 36 new stores in the United States, the 2,258-store retailer said it will still grow square footage by 1.5% per year starting in 2009.
The new strategy will cut about $1 billion out of capital spending over the next three years.
Home Depot noted that total capital spending for the current fiscal year is projected at $2.3 billion, down from $3.6 billion last year.
From this new plan and other measures, $77 billion Home Depot will recognize a charge of about $586 million in 2008 — and even before that charge, the company has projected a 19% to 24% drop in diluted earnings per share from continuing operations for fiscal 2008.