updated 1/19/2006 11:11:26 AM ET 2006-01-19T16:11:26

The Home Depot Inc. rolled out a bold plan Thursday that projects annual earnings-per-share growth of up to 14 percent over the next five years as the company continues to pump more cash into its business serving professional contractors, but slows the rate at which it opens new stores.

The nation’s largest home-improvement store chain said ahead of an investor conference that yearly earnings-per-share growth should be in the range of 10 percent to 14 percent from 2006 to 2010.

“It’s all about getting more out of our existing assets,” Chief Executive Officer Bob Nardelli told investors at the conference. “It’s all about store productivity.”

The company said it will open 400 to 500 stores over that period, which is a slower rate than the 150 to 200 stores it has been building in each of the last several years. Nardelli said new store formats and products will be just as important as new stores. He also said the company wants to continue increasing its online and catalogue business.

Home Depot said it expects annual sales growth over the next five years of 9 percent to 12 percent.

A major part of the company’s growth plans over the next five years will focus on its division that serves business customers, such as homebuilders, professional contractors, municipalities and maintenance professionals. By 2010, the company expects that Home Depot Supply will generate 18 percent to 19 percent of overall sales. Home Depot Supply expects to operate in more than 1,500 locations by the end of the decade.

In recent months, Home Depot has been acquiring businesses that serve some of its niche markets.

“This isn’t about buying sales, it’s about establishing multiple platforms for growth that build off our strength,” Nardelli said at the investor conference.

For 2006, Atlanta-based Home Depot said it projects sales and earnings-per-share growth on track with its five-year targets. But if it closes its acquisition of Hughes Supply near the end of the first quarter or at the beginning of the second quarter, the company said it projects 14 percent to 17 percent sales growth in 2006.

The company also reiterated its sales and earnings forecasts for 2005. The company, which has more than 345,000 employees, reports its fourth-quarter and year-end 2005 earnings on Feb. 21.

Home Depot has 2,028 stores in the United States, Canada and Mexico. It plans to expand to China, but has not said when it will open stores there, nor how many.

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