Home Depot Reports $54M Q4 Loss

Atlanta Home Depot reported a fourth-quarter loss of $54 million on Tuesday, compared to net earnings of $671 million for the same period in fiscal 2007. The company blames the deficit on its plan to shut its four smaller home-improvement brands, EXPO, THD Design Center, YardBIRDS and HD Bath, and the reduction of support-staff functions.

Sales for the fourth quarter, ended Feb. 1, totaled $14.6 billion, a 17.3% decrease from the fourth quarter of fiscal 2007. The fourth quarter of 2008 consisted of 13 weeks compared with 14 weeks of sales in the fourth quarter of fiscal 2007.

For fiscal 2008, net earnings were $2.3 billion, compared to $4.4 billion for fiscal 2007. This reflected a $1.1 billion charged related to the recently announced business rationalization charge of $387 million, and the write-down of Home Depot’s investment in HD Supply in the fourth quarter. This write-down totaled $163 million.

The net-earnings drop also reflected a $564 million store-rationalization charge associated with the closing of 15 stores and the removal of 50 stores from the chain’s new store plan announced earlier this year.

Sales for fiscal 2008 were $71.3 billion, a decline of 7.8% compared to fiscal 2007. Excluding last year's extra week, sales declined by 6.5% and same-store sales declined 8.7%.

"Despite the difficult economic conditions, the chain made important progress in key areas," said Frank Blake, chairman and CEO. “We made strategic business decisions, such as exiting non-core businesses and significantly reducing square footage growth, which will better position us for the future.”