ATLANTA–The Home Depot reported a 27 percent drop in quarterly net profit, and said the housing crisis contributed to its first yearly sales decline of 2.1 percent. Sales for fiscal 2007 were $77.3 billion, or 2.1 percent below fiscal 2006. Comparable-store sales for the year declined 6.7 percent.
For the fiscal 2007 fourth quarter, Home Depot posted net earnings of $671 million, compared with $925 million in the prior-year period. Quarterly sales totaled $17.7 billion, a 1.5 percent increase from the fourth quarter of fiscal 2006.
Home Depot said it would scale back its store-opening plans by half, and warned that annual sales for 2008 would be off, amid a “challenging” home improvement environment, the continued housing crisis and credit woes.
Frank Blake, chairman and chief executive officer, said Home Depot can expect a total sales decline of 4 to 5 percent for fiscal 2008, with negative comp-store sales “in the mid- to high-single-digit range.” The retailer expects to open 50 new stores, down from 100-plus new stores in 2007, and reduced capital expenditure guidance of $2.3 billion, from $3.6 billion.
“This was a difficult year financially, but I believe the progress we made on our key priorities set the foundation for the long-term health of our company,” Blake said in a statement.