Atlanta - Second-quarter net profits at The Home Depot declined 7.2 percent to $1.1 billion, and net sales sank 9 percent to $19 billion, reflecting consumers' continuing economic concerns, the retailer reported this morning.
Same-store sales for the No. 1 home-improvement chain fell 8.5 percent in total and 6.9 percent in the United States for the three months, ended Aug. 2.
"Concerns about the housing market, rising unemployment and softness in the overall economy continue to pressure consumers," said chairman/CEO Frank Blake. Nevertheless, he said the company "performed well" in a down market thanks to greater operating productivity and market share gains.
Analysts agreed. According to Credit Suisse's Gary Balter, Home Depot's results exceeded expectations given the challenging environment, and its same-store sales surpassed those of chief rival Lowe's for the first time in recent memory.
"Under Frank Blake and his very strong team, this story is also about reinvesting in the basics of retailing, customer service, systems, distribution and merchandising, providing an additional lift that Lowe's would not enjoy," Balter observed in a research note.
Yesterday, Lowe's reported a 19 percent drop in second-quarter profits and a 9.5 percent decline in same-store sales.
Home Depot's second-quarter results included a net impact to operating profit of $20 million from the previously announced closing of the company's 34 Expo Design Centers and related specialty stores, and a tax benefit of approximately $50 million arising from a favorable foreign tax settlement.