Atlanta, GA, Jan. 3--Slow sales during the holiday season have led Home Depot to lower its earnings estimates for its fiscal year ending in February. The firm now expects earnings of between $1.53 and $1.55 a share--well below the $1.57 a share forecast by analysts surveyed by Thomson First Call.
Although retailers have been warning for weeks now that holiday sales were not nearly as strong as hoped, the extent of Home Depot's losses were still striking. Home Depot1s overall sales declined up to 10% during December. The company had been expecting a drop of 3% to 5%.
For the year, Home Depot said it expects total sales growth of 10% and earnings per share growth of 21% to 23% on a comparable 52 week basis for fiscal 2002.
The company hesitated to say things would improve in 2003.
3These business trends indicate the likelihood of a challenging environment well into the next fiscal year,2 chairman and chief executive Bob Nardelli said. 3The Home Depot will focus on sales growth opportunities, including development of new products and assortments, as well as reinvestment in our stores, our associates and our systems, all with the goal of improving every customer's shopping experience.2
Home Depot is also making progress in eliminating some products that come from environmentally sensitive areas. The company, the nation's largest wood retailer, has been under pressure from environmentalists to alter its timber policy.
Officials said they have reduced purchases of Indonesian lauan, a tropical hardwood grown in rainforests that is used in door components, by 70%. It has also focused on buying redwood from two companies committed to promoting sustainable forests.
The company sells more than $5 billion of lumber, plywood, doors and windows a year. Of particular concern was the amount of wood it bought from cutters in Malaysia, Indonesia and Ecuador, which have seen their forests reduced by 11% in the past decade.
