Tim Gillespie Home Depot Recent Article

Tim Gillespie Home Depot Recent Article - earnings per...

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No improvement for Home Depot, Lowe's Posted Aug 26 2008, 01:57 PM by Todd Harrison The slumping housing market continues to take a bite out of home improvement - and there’s no immediate relief in sight. Consumers are pressed by high gasoline and food prices, leaving less cash to upgrade the kitchen or bathroom. Home Depot and Lowe’s have already taken a hit. Home Depot, the sector leader, said second-quarter 2008 sales fell to $21 billion, a 5.4% decline from the same quarter a year ago. Comparable store sales declined 7.9%, but were offset in part by sales from new stores. Home Depot’s net earnings fell to $1.2 billion, or $0.71 per share, compared with $1.6 billion, or $0.81, for the same period a year ago. Lowe’s, Home Depot’s chief rival and the number-2 home improvement chain, said second quarter earnings fell 7.9%. Lowe’s said comparable stores sales in the second quarter fell 5.3%, but ringing cash registers at new stores boosted overall sales about 2.1%, to $14.5 billion from $14.2 billion. However,
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Unformatted text preview: earnings per share fell about 4.7%, to $0.64 from $0.67. The outlook wont improve in the fall and winter, typically slow seasons for the home improvement business. Most analysts dont see a sector turn around until 2009 at the earliest; some believe the home improvement market will remain slack until 2010. Both retailers launched new promotions, but backed away. The move is almost certain to reduce sales in the short-term, but the cost of the promotions made the sales of little long-term value to the retailers. Home Depot had cut carpet instillation for an entire house to $99 from $199. It also waived interest payments for as much as a year on purchases of at least $299 on its proprietary credit card. Neither promotion goosed sales. Lowes boosted the price of its whole-house carpet instillation by $50 to $249 after the promotion cut into profits in the first and second quarters....
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This note was uploaded on 02/25/2012 for the course FINANCE 410 taught by Professor Conway during the Spring '12 term at Regis University.

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