Home Depot, Atlanta, said Nov. 14 that it had disappointing third-quarter results because of the tough housing market.
The company’s net earnings during the three months ended Oct. 29 fell 3.1 percent compared to the same quarter of 2005 to $1.49 billion. Sales for the third quarter of fiscal 2006 totaled $23.1 billion, an 11.3 percent increase from the third quarter of fiscal 2005.
Total sales in HD Supply grew by 159 percent to $3.5 billion, driven by acquisitions as well as organic growth. During the quarter, Home Depot acquired Burrus Contractors Supply, a concrete accessories distributor with three locations in Texas and Louisiana; Edson Electric Supply, a Phoenix-based electrical distributor that operates 11 locations throughout Arizona; and Grafton Utility Supply, an electrical utlity distributor in Canada. Bob Nardelli, Home Depot’s chairman, president and CEO, is planning to integrate those businesses into HD Supply, which supplies professional customers in a variety of construction and industrial trades.
Home Depot Supply entered the electrical industry in a big way with its purchase of Hughes Supply, Orlando, Fla., in March 2006.
Nardelli blamed the housing market for the recent shortfall. “Our sales performance was softer than we anticipated, but I believe we are making the right decisions to strengthen our core retail business and build our HD Supply platform to ensure that we emerge even stronger when the housing cycle rebounds,” he said.
Home Depot’s total sales grew 11.3 percent year-over-year to $23.1 billion during the third quarter 2006. Home Depot opened 26 new stores, including one relocation, with two new stores in Canada and one new store in Mexico, bringing its store count to 2,104.
Nardelli thinks his company’s sales during fiscal 2006 will grow by about 12 percent.