10:00AM New York – Home improvement retailers Home Depot and Lowe’s report declining revenue and earnings and offered a weak outlook for the current quarter.

The Home Depot, Inc., a home improvement retailer today reported sales decreased 3.4% to $17.9 billion compared to $18.5 billion for the same quarter for 14th week of 2007.

First quarter net earnings declined 66% to $356 million or $0.21 per diluted share compared with $1.0 billion or $0.53 per diluted share in the same period of 2007. These results reflect a nonrecurring charge of $543 million due to the recently announced closing of 15 stores and removal of 50 stores from the future growth pipeline. Comparable store sales fell 6.5%.

Only yesterday Lowe’s, the second largest retailer reported revenue declined 1.3% and earnings fell 18%.

Operating income decreased 56.5% to $728 million from $1.6 billion for the period of last year. Cost of sales declined 3.6% to $11.8 billion from $12.2 billion. Gross profit fell 3% from $6.07 billion compared with $6.26 billion for the same quarter of 2007. Total operating expenses increased 16.4% to 5.3 billion from $4.6 billion.

At the end of the first quarter, the Company operated a total of 2,258 retail stores which included 1,970 The Home Depot stores in the United States, 166 stores in Canada, 69 stores in Mexico, 12 stores in China, as well as 2 THD Design Centers, 5 Yardbirds stores and 34 EXPO Design Center locations. The Company employs more than 300,000 associates.

""The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country,"" said Frank Blake, chairman and chief executive.

The Home Depot, Inc. stock (HD: chart) in the last one year traded as high as $40.87 in July 2007 and $24.73 in Jan of 2008. At the opening the stocks fell $1.05 to $27.82.


Lowe’s Companies, Inc., said that sales for the quarter declined 1.3% to $12 billion from $12.2 billion in the first quarter of 2007.

Net income decreased 17.9% to $607 million or $0.41 diluted earnings per share compare to $739 million or $0.48 in the same quarter of 2007. Comparable store sales for the first quarter declined 8.4%.

During the quarter, Lowe''s opened 20 new stores. As of May 2008, Lowe''s operated 1,554 stores in the United States and Canada representing 176.4 million square feet of retail selling space, an 11.1% increase over last year.

Second Quarter 2008 outlook

The company expects to open approximately 23 new stores. Total sales are expected to increase 1%. Comparable store sales expect to decline 6 to 8%. Store opening costs are expected to be $22 million. Earnings per diluted per share in the quarter are expected to be $0.54 between $0.59.

Fiscal year 2008 outlook

The company expects to open approximately 120 new stores in 2008. Total sales are expected to increase approximately 1%. Comparable store sales expect to decline between 6% and 7% and store opening costs expected to be approximately $106 million. Diluted earnings per share are expected between $1.45 and $1.55 for the fiscal year ending January 30, 2009.

Lowe’s Companies, Inc. (LOW: chart) stock in the last one year has traded as low as $20.31 in Jan 2008 and $32.99 in June of 2007. In the morning trading today the stock edged 49 cents lower to $23.79.