Home Depot hammered: Q1 net income plummets
The Home Depot Inc.'s profit sank 66 percent in the first quarter, as the home improvement retailer continued to battle the slumping housing market and weakening economy and also took a $543 million charge to close stores.
Atlanta-based Home Depot (NYSE: HD) had net income of $356 million and earnings of 21 cents a share, compared with net income of $1 billion and earnings of 53 cents a share in the first quarter of 2007.
Sales for the first quarter dropped 3.4 percent to $17.9 billion due to negative comparable store sales of 6.5 percent, offset in part by sales from new stores.
The results for the first quarter of 2008 also included a $543 million charge related to closing 15 stores , cutting 1,300 jobs and removing 50 stores from future growth plans.
The average customer ticket in the first quarter dropped 2.8 percent to $57.36 http://paydayintime.com.
"The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country," said Frank Blake, chairman and CEO. "… We will continue to invest wisely in our core retail business to earn our customers' confidence and ensure the long-term health of our business. In addition, our decision to close stores and remove planned stores from our pipeline demonstrates our commitment to disciplined capital allocation."
At the end of the first quarter, Home Depot had 2,258 retail stores.
Rival Lowe's Cos. reported Monday its first-quarter profit fell nearly 18 percent to $607 million, or 41 cents a share.