Atlanta, GA, Jan. 17--Home Depot will increase capital spending 21% to $4 billion in fiscal 2003 to enhance the customer's shopping experience and reinvigorate sales performance.
Home Depot expects to deliver sales growth of between 9% and 12%, and earnings growth of between 9% and 14% in the coming year. The firm also expects to open 200 stores and add 40,000 associates in the coming year. The company also confirmed its current estimates of 10% sales growth and 21% to 23% earnings growth for the fiscal year ending February 2 on an adjusted 52 week basis.
"We have embarked on a transformation of Home Depot from a young, decentralized business toward a more mature and balanced company with predictable and sustainable growth potential," said Bob Nardelli, chairman, president & CEO. "These changes are the logical transition following Home Depot's success over the past 23 years as the fastest retailer in history to exceed $50 billion in sales.
"In fiscal 2002, the transformation produced many positive results at The Home Depot, which are evident in margin expansion, better product assortments, earnings growth, strong cash flow and a 20% dividend increase. While necessary, the level of change has proven to be disruptive, putting pressure on our sales performance. Over the coming year, we will increase our investment in our associates, existing stores, and new information systems. At the same time, we will be focused to preserve and enhance the customer experience while accomplishing these necessary changes.
"We anticipate that our continuing transformation and business trends will reflect a challenging economic environment into fiscal 2003, as evidenced by our expectation of 9% to 12% sales growth for the year. At the same time, we will take advantage of Home Depot's strong financial condition by opening stores in underserved markets to deliver sales gains."
The firm expects to launch a $250 million store remodeling program in the coming year. Executive vice president and CFO, Carol Tome, said that spending for 2003 on store level initiatives, remodels and technology will be $880 million, or 22% of the $4.0 billion capital spending budget.
She also said that Home Depot had completed its previously announced $2 billion common stock repurchase program during the fourth quarter.
