Home Depot 4Q Sales Decline
Atlanta The Home Depot announced Tuesday that its fourth-quarter profit fell more than 27% and that a suffering housing market contributed to the first annual sales decline for the world’s largest home-improvement store chain.
Home Depot said it earned $671 million in the three months ending Feb. 3, compared with a profit of $925 million in the same period a year earlier.
Despite an extra sales week, revenue in the quarter rose only 1.5% to $17.66 billion, compared with $17.4 billion a year earlier. Excluding that extra week, fourth-quarter sales declined 4.7% compared with a year ago.
Revenue for fiscal 2007 declined 2.1% to $77.35 billion. Spokesman Ron DeFeo said that was the first-ever annual sales decline for Home Depot.
Same-store sales declined 8.3% in the quarter. The company’s average sales ticket declined 2.3% to $54.96 in the quarter, compared with $56.27 a year ago.
The company said it expects to see a total sales decline in fiscal 2008 of 4% to 5%.
Home Depot said it plans to open only 55 new stores this year. That’s about half as many as it opened last year. Home Depot has been scaling back the number of new store openings in recent years.
Lampert, the Eli Manning of retail?
HOFFMAN ESTATES, Ill. The New York Giants triumph over the highly favored New England Patriots in the Super Bowl earlier this month, has become an example of coming from the bottom to win it all. Sears Holdings chairman Edward Lampert is one of the latest to use the Giants win, even going as far to compare himself, and the leaders of his company, to quarterback Eli Manning.
The Giants analogy, and Eli Manning comparison, is applied mainly to the company’s Kmart division. In a letter to investors, posted on the Sears Holdings investor relations Web site, Lampert said during Kmart’s bankruptcy in 2002, the unit was “like an undrafted free agent who nobody thought had a chance to play in the big leagues.” Lampert went on to say, “Like Eli Manning, we know what it’s like to be underestimated and questioned, but we intend to keep working on our game to achieve our full potential.”
Sears Holdings reported net income of $426 million, or $3.17 per diluted share, for the fourth quarter ended Feb. 2, compared with net income of $811 million, or $5.27 per diluted share, for the fourth quarter ended Feb. 3, 2007. For the fiscal year ended Feb. 2, 2008, net income was $826 million, or $5.70 per diluted share compared with net income of $1.5 billion, or $9.58 per diluted share, for the fiscal year ended Feb. 3, 2007.
Circuit City investor seeks to replace board
RICHMOND, Va. Circuit City Stores today acknowledged that it has received two proposals from shareholder Wattles Capital Management regarding its board of directors. Wattles holds approximately 6.5% of the outstanding shares of the company’s common stock.
Circuit City reported that Wattles proposed the idea of replacing the company’s Circuit City 12-member board of directors with its own nominees. Circuit City said its board of directors will review carefully the shareholder’s proposals and the qualifications of the nominees in accordance with its fiduciary duties, mindful that the proposal would give the shareholder absolute control of the entire board, which would be disproportionate to its relative ownership of the company’s shares.