Atlanta, GA, Dec. 6, 2002--Home Depot’s net sales for the third quarter of fiscal 2002 increased 8.9% to $14.5 billion from $13.3 billion for the third quarter of fiscal 2001. For the first nine months of fiscal 2002, net sales increased 12.4% to $45.0 billion from $40.1 billion for the comparable period in fiscal 2001. According to the firm, the sales increase for both periods was primarily attributable to new stores opened since the end of the third fiscal quarter of last year (1,471 stores open at the end of the third quarter of fiscal 2002 compared with 1,295 at the end of the third quarter of fiscal 2001).
Comparable store-for-store sales decreased 2% for the third quarter of fiscal 2002 and increased 1% for the first nine months of fiscal 2002. Home Depot stated that the decrease in comparable store-for-store sales for the third quarter of fiscal 2002 was attributable to a number of factors, including the ongoing aggressive merchandise reset campaign which interrupted customer traffic as necessary investments were made to position stores for future growth; depressed lumber prices; pressure on millwork as the firm anniversaried last year’s energy conservation product demand; and the firm’s cannibalization strategy. Merchandise resets are expected to continue through the fourth quarter of 2002 into fiscal 2003. The increase in comparable store-for-store sales for the first nine months of fiscal 2002 was primarily due to strong sales in kitchen and bath driven by appliances, as well as strong sales in paint and in flooring.
In order for the firm to achieve its long term strategy of market dominance, Home Depot is strategically opening (“cannibalizing”) stores near market areas served by existing stores to enhance service levels, gain incremental sales and increase market penetration. As of the third quarter of fiscal 2002, new stores cannibalized 22% of existing stores and the firm estimates that store cannibalization reduced comparable store-for-store sales by approximately 4%, about the same as in prior periods. As more than 30% of Home Depot’s existing stores were cannibalized in some of its most productive divisions, including New England and the West Coast, the weighted average weekly sales per store decreased during the third quarter of fiscal 2002 to $754,000 from $805,000 in the third quarter of fiscal 2001.
