Home Depot announces 2004 sales, earnings targets

Home improvement retailer The Home Depot said at its Jan.16 annual meeting for equity analysts and investors that it expects to deliver fiscal year 2004 sales growth of between 9 percent and 12 percent, and earnings growth of between 10 percent and 14 percent, excluding the estimated impact of Emerging Issues Task Force, Issue 02-16.

Comparable stores sales for fiscal 2004 are expected to increase 3 percent to 6 percent.

Including the estimated impact of EITF 02-16, which reflects an accounting change for certain advertising co-op allowances received from vendors, and which the company discussed at the end of the second quarter 2003, the company expects 2004 earnings growth of 7 percent to 11 percent.

In addition, the company laid out its capital spending plan of $3.7 billion for fiscal 2004, including investments in store modernization and maintenance, technology and the addition of 175 new stores.

"Since January 2001, we have invested nearly $10 billion in business growth and transformation efforts that are now a fundamental part of our structure," said Bob Nardelli, chairman, president and CEO of The Home Depot.

"Over the past three years, we have taken a disciplined approach and executed a market-focused, customer-centric strategy that has produced positive results for our shareholders. In the last three years, sales increased by approximately 41 percent and earnings per share grew by approximately 66 percent," he added.

Carol Tome, executive vice president and CFO, discussed fiscal 2003 and 2004 guidance and said, "Our financial results are proof that our strategies are working. We expect fiscal 2003 sales to grow 11 percent, including 2003 comparable store sales growth of approximately 3.8 percent. The company is raising its fiscal 2003 earnings per share guidance of 15 (percent to) 17 percent, with earnings per share now forecast to grow in the range of 17 (percent to) 19 percent."

Tome also discussed the company's broadening business model.

"Our fiscal 2004 capital plan of $3.7 billion is concentrated on making investments in store modernization, maintenance, technology, as well as new stores. We are accelerating our store modernization plans in 2004, spending $1 billion in both capital and expense, double what we spent in 2003, as we are experiencing a positive impact from our resets and remodels," Tome said.

Tome also noted that as of Jan. 6, the company has completed approximately $3.4 billion of its $4 billion share repurchase program.

The company has returned approximately 45 percent of earnings to shareholders through its share repurchase program and dividends over a three-year period.

In addition, the company's cash balance at fiscal year end 2003 is expected to be $2.5 billion and at fiscal year end 2004, the company expects a $3 billion to $3.2 billion cash balance.

Founded in 1978, The Home Depot reported fiscal 2002 sales of $58.2 billion. The company employs approximately 315,000 associates and has 1,695 stores, including one in Springfield at 2104 E. Independence.