Home Depot Earnings, Sales Plummet

Atlanta, GA, May 20, 2008--The Home Depot reported first quarter net earnings of $356 million, or $0.21 per diluted share, compared with $1.0 billion, or $0.53 per diluted share, in the same period in fiscal 2007.

These results include a one-time charge of $543 million related to the closing of 15 stores and removal of 50 stores from the future growth pipeline. Excluding the charge, the company reported earnings of $697 million, or $0.41 per diluted share.

Sales for the first quarter totaled $17.9 billion, a 3.4 percent decrease from the first quarter of fiscal 2007, as sales at existing stores fell 6.5 percent, offset in part by sales from new stores.

Also the company said that an additional week in the fourth quarter of 2007 added approximately $536 million to sales because of a seasonal timing change.

"The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country," said CEO Frank Blake in a press release.

"Our decision to close stores and remove planned stores from our pipeline demonstrates our commitment to disciplined capital allocation. This discipline and reinvestment in our existing stores will benefit our shareholders, associates and customers," said Blake.

At the end of the first quarter, the Company operated a total of 2,258 retail stores, which included 1,970 The Home Depot stores in the United States (including the Commonwealth of Puerto Rico, the territory of the U.S. Virgin Islands and the territory of Guam), 166 stores in Canada, 69 stores in Mexico, 12 stores in China, as well as 2 THD Design Centers, 5 Yardbirds stores and 34 EXPO Design Center locations.