Tough Year at Home Depot

The Home Depot Inc. (Atlanta) said it was cutting its earnings estimates for the fiscal year ending Feb. 2, 2003, citing slowing sales during the holiday season.

The world's largest home-improvement retailer said sales declined up to 10 percent in December, more than twice the drop the company had been expecting.

“Earnings performance is exceeding the high end of the growth guidance we outlined a year ago,” said chairman, president and ceo Bob Nardelli, “but our sales outlook for fiscal 2002 is short of our long-term target as we continue a major merchandising transformation to enhance both store appearance and product assortments.

“November results were consistent with our expectations, but lower customer transactions and lower- than-expected performance in traditional gift categories like hardware and power tools severely impacted December results. These business trends indicate the likelihood of a challenging environment well into the next fiscal year. [We] will focus on sales growth opportunities, including development of new products and assortments, as well as reinvestment in our stores, our associates and our systems, all with the goal of improving every customer's shopping experience.”

Nardelli said the retailer would outline specific action plans during its annual investor conference and simultaneous webcast on Friday, Jan. 17, 2003.