ATLANTA >> Shares of Home Depot sank 13 percent today after the company lowered its earnings estimates for the fiscal year ending in February, citing sluggish holiday sales. Home Depot lowers
earnings outlookPoor holiday sales will cut into profit,
By Harry R. Weber
the big-box retailer says
Associated PressThe country's largest home improvement store chain said yesterday it expected 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.
The announcement came after the markets closed yesterday. In trading today on the New York Stock Exchange, Home Depot shares fell $3.50, or 14.1 percent, to $21.38.
Shares of chief rival Lowe's Companies Inc. also fell, despite the fact the Wilkesboro, N.C.-based company reconfirmed its sales and earnings expectations for the fourth quarter and year. Shares of Lowe's closed at $36.92, down $2.43 on the NYSE.
Quarter-to-date comparable store sales are within the company's previous guidance of 2 to 4 percent, the company said.
For the year, Lowe's expects total sales to increase by about 20 percent and earnings per share of $1.78, an increase of 37 percent over fiscal 2001.
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 Depot said its overall sales declined up to 10 percent during December. The company had been expecting a drop of 3 to 5 percent.
For the year, Home Depot said it expects total sales growth of 10 percent and earnings per share growth of 21 percent to 23 percent on a comparable 52-week basis for fiscal 2002.
The company hesitated to say things would improve in 2003.
"These business trends indicate the likelihood of a challenging environment well into the next fiscal year," chairman and chief executive Bob Nardelli said. "The 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."
The company will detail its plans in an investor conference Jan. 17.
Also yesterday, Home Depot said it is 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.
Home Depot