Home Depot Reports Significant Profit Drop for Quarter
Home improvement industry leader Home Depot today reported a 66 percent drop in quarterly profit as the U.S. housing meltdown hurt sales and it implemented plans to close stores and cut back expansion plans.
The company said earnings fell to $356 million, or 21 cents a share, in the first quarter ended on May 4 from $1.05 billion, or 53 cents a share, a year earlier.
Results included a charge of $543 million to close 15 under-performing U.S. stores and scrap plans to open 50 outlets that had been in the company's pipeline.
Many retailers are slowing store growth as recession worries and higher prices for gasoline and food cut into consumer spending.
But the crumbling U.S. housing market has compounded troubles for Home Depot and smaller rival Lowe's
as plummeting home values, slower sales and tighter credit curb demand for big-ticket renovations.
"The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country," Home Depot Chairman Frank Blake said in a statement.
Published on May 20, 2008
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