Home Depot Reports Slump in Quarterly Sales, Profit
August 20, 2007,
Last week, The Home Depot said it foresees softness in the home and housing markets going into 2008 as it reported a 10% drop in second quarter earnings.
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 cents 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: that earnings per share from continuing operations are likely to decline by 12-15% for fiscal 2007. Consolidated earnings per share are expected to decline by 15-18% for fiscal 2007.
The Home Depot, Inc.
|Qtr. 7/29 (x000)||2007||2006||% change|
* Home Depot is now reflecting the results of the HD Supply segment as a discontinued operation, which impacted earnings by $66 million, or 3 cents per diluted share, down from $161 million, or 8 cents per share. Including a tax charge of roughly $60 million, the units adjusted earnings for the quarter were $126 million.
|Oper. income (EBIT)||2,557||2,915||(12.3)|
|Per share (diluted)||0.81||0.09||(10.0)|
|Average gross margin||33.1%||33.0%||—|
|6 Months (x000)||2007||2006||% change|
|Oper. income (EBIT)||4,229||5,187||(18.5)|
|Per share (diluted)||1.34||1.60||(16.3)|
|Average gross margin||33.4%||33.6%||—|