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Home Depot's Q2 Profits Up
Aug 20, 2003
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The Home Depot said that sales of items such as John Deere tractors and pressure washers helped the company turn around losses at its older stores as it posted profits of 9.9 percent in the second quarter.

The U.S.'s largest home improvement chain credited a brightening of its stores, an addition of workers on the floor, and better products with helping the store grow in the face of strong competition from Lowe's Cos. Inc.

"They still have a tough road to turn this company around and make it a truly modern retailer," said Barbara Allen, an analyst for Natexis Bleichroeder. "They're doing more things right than they were before, which is kind of a backhand compliment."

Home Depot had company-record earnings of U.S. $1.3 billion, or $0.56 a share, up from $1.18 billion, or $0.50 a share, in the year-ago period.

Lowe's, the No. 2 home improvement retailer, said that second quarter earnings rose nearly 28 percent to $597 million, or $0.75 per share, as homeowners caught up on projects delayed by cold and wet weather. That compared to $467 million, or $0.59 per share, in the same period a year ago. Lowe's also raised its outlook.

Home Depot's sales at stores that have been open for at least a year increased 2.2 percent, reversing three straight quarters of declines.

"The transformation we embarked upon last year is working," said chief financial officer Carol Tome. "It was very disruptive to our business last year. We've learned a lot."

A broad-based combination of improvements at stores nationwide helped propel profits, Ms. Tome said. More people are buying color-matching paint, walk-behind lawn mowers and concrete, she said. Customer service also is improving, she said.

More employees are walking the aisles to help customers because they were freed up by more self-checkout machines. About 60,000 people came to a nationwide do-it-yourself workshop in July. And U.S. television and radio spots emphasizing home projects are helping bring in customers.

Home Depot said it still expects sales for this fiscal year to increase between 9 percent and 12 percent. Quarterly revenue rose 10.5 percent to nearly $18 billion for the quarter from $16.3 billion for the same period a year ago.

For the first half, Home Depot reported earnings of $2.21 billion, or $0.96 per share, on revenue of $33.09 billion. That compares with earnings of $2.04 billion, or $0.86 per share, on revenue of $30.56 billion in the previous year. (AP)

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