Home Depot Sales Climb 8.1%, Net Jumps 13.6%
By Jeff Malester -- TWICE, 5/23/2005
Atlanta — A broadened assortment of merchandise, as well as additional “innovative and distinctive” products, carried The Home Depot to an 8.1 percent increase in fiscal first-quarter sales and record average customer ticket.
Sales in the three months, ended May 1, rose to $19 billion, up from $17.6 billion in the year-ago period. Comp-store sales moved up 2.1 percent.
The home improvement retailer achieved a record average ticket of $58.25 in the first three months, representing an increase of 5.7 percent, compared with last year's $55.11. However, weighted average weekly sales per operating store dropped 2.3 percent to $757 from $775.
Operating income at Home Depot increased 14.5 percent in the first quarter, hitting nearly $2 billion, up from $1.7 billion in the same quarter in 2004. Net earnings came in at $1.2 billion, a 13.6 percent rise over the $1.1 billion reported year-on-year.
Looking at Home Depot's product assortment, the retailer said, “According to an independent third party, the company's [major] appliance share, on a rolling 12-month basis, increased by [nearly 2 percentage points] in the first quarter.” The retailer attributes the increase to a broadened product assortment and efforts made by store sales people. “The addition of the LG appliance line, expected during the second quarter, will continue to expand our selection,” said John Costello, executive merchandising and marketing VP.
During the first quarter, Home Depot opened 21 new stores across North America and Mexico, bringing its total store count to 1,911.
Home Depot, which earlier announced it will dispose of its interest in the underlying real estate of 15 Expo Design Center locations, said these stores “at some point” will close in the future. The retailer plans to convert five Expo stores to The Home Depot format. The remaining 34 Expo stores are profitable and will continue operating.
In the first quarter, the company recorded $86 million of expense related to the anticipated disposition of its interest in the underlying real estate of Expo and $20 million of expense related to inventory markdowns. It said, excluding the impact of the Expo announcement, it leveraged expenses in the first quarter.
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