Video: Home Depot pounds out a profit

updated 2/24/2004 1:18:59 PM ET 2004-02-24T18:18:59

The Home Depot reported a nearly 39 percent jump in fourth-quarter profit on a 14 percent rise in sales, saying its growth and the renovation of its stores into a softer, cleaner look are paying off.

The results, announced Tuesday, beat Wall Street expectations.

The nation's largest home improvement store chain said that for the three months ending Feb. 1, it earned $951 million, or 42 cents a share, compared to a profit of $686 million, or 30 cents a share, in the same period a year ago.

Analysts surveyed by Thomson First Call were expecting earnings of 39 cents a share.

Sales in the quarter were $15.13 billion, compared to $13.21 billion in the year-ago period. Same-store sales — a measure that compares sales at stores open at least a year — increased 7.6 percent in the quarter.

"These record results reinforce the fact that our strategy of investing nearly $10 billion in business growth and transformation over the past three years is producing the desired results for our customers and our shareholders," said chief executive Bob Nardelli. "The Home Depot is a company with a proud past and a bright future."

On Monday, its chief rival, Lowe's Cos., Inc. reported a 28 percent rise in profit to $407 million for the three months ended Jan. 30.

Last month, Atlanta-based Home Depot said it would continue its plan to lure customers with brighter stores, easier checkout and a number of new products in 2004. Home Depot had 300,000 employees and 1,707 stores at the end of fiscal 2003 in the United States, Canada and Mexico.

The company has said it will spend $3.7 billion in 2004 to modernize its stores, upgrade technology and open 175 new stores.

Home Depot also has been trying to broaden its employee base to appeal to more customers. Earlier this month, the company and the AARP formed a national partnership to recruit people older than 50 to fill jobs at Home Depot.

Full-year earnings for Home Depot were $4.30 billion, or $1.88 a share, compared to $3.66 billion, or $1.56 a share, a year ago. Twelve-month revenue was $64.82 billion, compared to $58.25 billion a year ago.

Also Tuesday, Home Depot reiterated its guidance for 2004. It said its fiscal 2004 sales growth will be 9 percent to 12 percent and full-year earnings per share growth will be 10 percent to 14 percent, excluding an accounting change. It expects its earnings per share growth for the year to be 7 percent to 11 percent including the accounting change.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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