The company, whose entry into Hawaii has been the subject of frequent rumors, would bring new competition to Eagle Hardware & Garden, which operates a 175,000-square-foot store at Waikele Center, and long-time local retailer City Mill Home Improvement Centers.

"We're certainly looking at it," said Amy Friend, a Home Depot spokeswoman.

Friend said the company is eyeing several properties but she declined to identify the sites.

She said that Home Depot probably won't open a new Hawaii store until 1999, noting that the company first wants to study ways of shipping building materials and other hardware goods to the state. Friend said that Home Depot wants to ensure that it will be able to transport merchandise efficiently to meet customers' needs.

Founded in 1978, Home Depot operates more than 460 stores in 31 states and Canada and has more than 80,000 employees. The company said its share of the nation's home improvement market is about 12 percent, making it one of the largest in the business.

A typical Home Depot store includes 105,000 square feet of retail space for home improvement merchandise as well as 25,000 square feet for garden supplies. Each outlet carries between 40,000 and 50,000 items and some stores include restaurants.

For its fiscal year 1995, Home Depot had a net profit of $731.5 million on revenues of $15.5 billion.