The housing downturn is now firmly established in retailing, too. Retailer Home Depot (HD) and homebuilder D.R. Horton (DHI) reported weak results for the third quarter on Nov.14, as the fortunes of the latter company sank on cooler activity in the sector, leading to lower income for the retail giant.
Home Depot is also predicting a chilly fourth quarter, with per-share profits falling 12% to 16% from a year ago. “I know there are a lot of points of view out there, but I still think we have deeper to go than we have seen,” Chief Executive Bob Nardelli said on a conference call with analysts. “I do not think we have seen bottom yet. I do not see anything that says it’s going to get significantly better in ‘07,” he added.
For the three months ended Oct. 29, Home Depot’s net earnings sank 3.1% compared to the same quarter of 2005. The company’s sales in stores open more than a year dropped 5.1% during the quarter, as the housing market slowed and fewer customers looked for ways to upgrade or settle into new homes. Net income fell to $1.49 billion, or 73 cents per diluted share, from $1.54 billion, or 72 cents a share, in the same period last year. The mean analyst estimate had been for 75 cents per share, according to the San Francisco research firm StarMine. Home Depot’s total sales grew 11.3% year over year, to $23.1 billion during the third quarter of 2006.
Tags: Mortgages, Real Estate, Homes, Market Conditions
