Home Depot Cuts Earnings Estimate
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ATLANTA (AP) _ The Home Depot cut its earnings per share estimate for the fiscal year ending in February, citing slowing sales during the holiday season.
The country’s largest home improvement store chain revised its guidance Thursday from $1.57 per share to between $1.53 and $1.55 a share. Analysts surveyed by Thomson First Call were expecting $1.57 a share.
Atlanta-based Home Depot said sales declined up to 10 percent during December, while the company had been expecting a drop of 3 to 5 percent.
The announcement came after the markets closed Thursday and sent Home Depot shares down 9.1 percent, or $2.26, to $22.62 in after-hours trading. The shares had finished the regular session at $24.88, up 86 cents, or 3.6 percent, on the New York Stock Exchange.
For the year, Home Depot said it expects total sales growth of 10 percent and earnings per share growth of 21 to 23 percent on a comparable 52-week basis for fiscal 2002.
Chairman and chief executive Bob Nardelli said ``our sales outlook for fiscal 2002 is short of our long-term target as we continue a major merchandising transformation to enhance both store appearance and product assortments.″
Despite the drop in sales, Nardelli said the company does not need a repeat of last year’s January clearance event.
``These business trends indicate the likelihood of a challenging environment well into the next fiscal year,″ Nardelli said. ``The Home Depot will focus on sales growth opportunities, including development of new products and assortments, as well as reinvestment in our stores, our associates and our systems, all with the goal of improving every customer’s shopping experience.″
The company will detail its plans in an investor conference Jan. 17.
The Home Depot, which had 2002 sales of $53.6 billion, operates more than 1,500 stores in the United States, Canada and Mexico.
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