The Home Depot Inc., the world's largest home improvement store chain, warned todayt that its earnings will decline this year more than previously expected because of weak conditions in the housing market and the sale of its wholesale distribution business.
The Atlanta, GA, US-based company said it now expects its earnings per share to decline by 15 percent to 18 percent for fiscal 2007. In May, the company had projected an earnings per share decline of 9 percent for the year.
The earlier guidance included an estimated U.S. $0.18 of earnings per share contribution from the company's HD Supply unit for the last six months of the fiscal year.
Last month, Home Depot said it was selling the unit to a group of private equity firms for $10.3 billion. Home Depot said today it was updating its guidance to reflect the unit as a discontinued operation.
The company said it expects total retail sales to be down 1 percent to 2 percent for the year and sales at stores open at least a year to be down in the mid-single digit range.
The fiscal 2007 earnings per share targets reflect 52 weeks and do not include the impact of the 53rd week. The company will have 53 weeks of operating results in its fiscal 2007 financial results. Home Depot projects that the 53rd week will add approximately $0.3 to its consolidated earnings per share guidance for fiscal 2007.
Home Depot, which has more than 2,000 stores in the US, Canada, Mexico and China, said today it will open approximately 108 new stores in fiscal 2007. (Reuters)