Atlanta — Buffeted by the downturn in the home-improvement market, The Home Depot reported a $54 million loss in its fiscal fourth quarter, ended Feb. 1, while sales declined 17.3 percent to $14.6 billion for the period.
The loss also reflects one-time charges and write-downs of $602 million related to the closing of Home Depot Expo, the decline in value of its 12.5 percent interest in distributor HD Supply and a loss from discontinued operations.
Comp-store sales fell 13 percent during the quarter, which had one less selling week than the year-ago period. Excluding the calendar shift, comp sales declined 11.5 percent.
Despite the weak results, Wall Street lauded the home-improvement chain for outperforming its chief rival Lowe’s, which reported significant gross margin declines during its own fiscal fourth quarter. In a research note, Credit Suisse analyst Gary Balter labeled Home Depot’s expense and inventory control "superb," and cited its higher comps and "solid" gross margin.
He attributed the latter to Home Depot’s decision, unlike Lowe’s, to avoid a price war with Sears in appliances.
In a statement, Home Depot chairman/CEO Frank Blake said "Despite the difficult economic conditions, the company made important progress in key areas," including customer service, reducing new store openings, exiting non-core businesses, cutting prices and reducing inventory by more than $1 billion while improving in-stock levels.
"We expect the home-improvement market in 2009 will remain just as challenging as 2008," Blake said, "but we will continue to invest in our associates and stores to set a strong foundation for the long-term health of our company."