Home Depot Reports Tough Fourth Quarter

The Home Depot (Atlanta), the world's largest home improvement retailer, reported a fiscal 2008 fourth quarter consolidated net loss of $54 million, compared with net earnings of $671 million in the same period last year.

These results reflect a pre-tax business rationalization charge of $387 million, related to its exit of Expo, THD Design Center, YardBIRDS and HD Bath businesses; a pre-tax write-down of the company's investment in HD Supply of $163 million; and a loss from discontinued operations of $52 million, net of tax.

Sales for the fourth quarter totaled $14.6 billion, a 17.3 percent decrease from the fourth quarter of fiscal 2007. The fourth quarter of 2008 consisted of 13 weeks compared with 14 weeks of sales in the fourth quarter of fiscal 2007. Excluding the additional week in 2007, sales declined by 12 percent from the fourth quarter of fiscal 2007.

Comparable store sales for the fourth quarter dropped 13 percent and were negatively impacted by the calendar shift in 2008. Excluding the calendar shift, comparable store sales were negative 11.5 percent.

“Despite the difficult economic conditions, the company made important progress in key areas,” says chairman and ceo Frank Blake. “We improved customer service ratings, reduced inventory by over $1 billion while achieving the best in-stock rate we have had for several years and launched an effective new lower price campaign. And we made strategic business decisions, exiting non-core businesses and significantly reducing square footage growth, which will better position us for the future. The hard work and dedication of our associates made these accomplishments possible.

“We expect the home improvement market in 2009 will remain just as challenging as 2008, but we will continue to invest in our associates and stores to set a strong foundation for the long term health of our company,” says Blake.