The Home Depot announces sales, earnings expectations

The Home Depot, which operates a store in Springfield at 2104 E. Independence, announced Jan. 13 at its annual meeting with investors that it expects its fiscal year 2005 sales will grow between 9 percent and 12 percent. The company also said that it anticipates that earnings per share will grow between 10 percent and 14 percent. The company plans to add 175 new stores and continue its investment in store modernization and technology through a capital spending plan of $3.7 billion. Comparable store sales for fiscal 2005 are expected to increase 4 percent to 7 percent.

“We are clearly on track with the transformation of the company and our strategy of building multiple business platforms for solid, sustainable growth well into the future,” said Bob Nardelli, The Home Depot chairman, president and CEO, in a news release.

“We are staying on our strategy of enhancing the core, extending the business and expanding the market,” he said.

Carol Tome, executive vice president and chief financial officer for The Home Depot, added, “For fiscal year 2004, we surpassed key growth targets for sales, earnings and year-end cash position.”

During the meeting, The Home Depot made these forecasts for financial performance for fiscal year 2004, which ends Jan. 31.

• Sales growth of 12.5 percent, to $72.9 billion;

• Same-store sales growth of approximately 5 percent, the company’s best annual performance since 1999;

• Earnings per share of $2.26, an increase of 20 percent; and

• Gross margin expansion of approximately 160 to180 basis points.

As of Dec. 23, 2004, the company has completed approximately $6.4 billion of its $7 billion share repurchase program and, during the past three years, has returned approximately $8.8 billion in cash to its shareholders in the form of dividends and share repurchases.

John Costello, executive vice president of merchandising and marketing, announced that The Home Depot will continue its aggressive pace of introducing new products in 2005, supported by continued investment in store modernization.

Major new product introductions in 2005 include an expanded assortment of storage and organization products, new lighting and fan products, new fashion rug brands and Ralph Lauren metallic paints.

Also on tap for the year are expanded countertop displays, high-end kitchen cabinet and appliance vignettes and expanded lighting showrooms.

Costello also announced that The Home Depot has formed a new partnership with LG Electronics to bring a third line of home appliances to the company’s product offering in the second quarter of the year. The new line includes laundry systems, dishwashers, refrigerators and air conditioners.

Carl Liebert, senior vice president of operations for The Home Depot, said that centralized distribution will serve the company’s evolving store formats.

“The new distribution model, which will be in pilot by year-end 2005, will allow us to simplify our store operations, improve inventory turnover and more efficiently serve new formats and businesses,” Liebert said.

In 2005, The Home Depot expects to continue to build on the growth of its business in services and installations. In late 2005, the company will roll out its new special order services initiative, a platform that will provide a seamless link between customers, associates and installers.

“With over 11,000 installations per day, The Home Depot is emerging as a major force through installation services, and we expect to continue our double-digit growth into 2005,” said Frank Blake, executive vice president of business development for The Home Depot.

The company indicated that during fiscal 2005, it will continue to expand globally by adding 19 stores in Canada and 10 stores in Mexico.

The Home Depot also is strategically positioned to enter China.

The Home Depot, which is traded on the New York Stock Exchange under the

symbol HD, was founded in 1978. The company posted sales of $64.8 million in fiscal year 2003.