The Home Depot Inc., which has suffered under the weight of the collapsing housing market, reported a fiscal fourth-quarter loss of $54 million Tuesday mostly due to its plan to shut its four smaller home-improvement brands.
Adjusted results topped analysts’ estimates, however, and its shares climbed on the news.
The nation’s largest home improvement retailer lost 3 cents per share during the quarter, compared to a profit of $671 million, or 40 cents per share, a year ago. Excluding the charge related to the closings and other items, the Atlanta-based company earned 19 cents per share.
Last month Home Depot said it planned to close Expo Design Centers, YardBIRDS, Design Centers and HD Bath, a bath remodeling business. The company has been hurt as fewer of its customers are buying new homes and spending money on repairs and remodeling.
Home Depot has said it plans to eliminate 7,000 jobs, or about 2 percent of its 300,000 workers. Most of the cuts affect workers at the four businesses being closed.
“We expect the home improvement market in 2009 will remain just as challenging as 2008, but we will continue to invest in our associates and stores to set a strong foundation for the long-term health of our company,” said Chairman and Chief Executive Frank Blake.
There was little cause for optimism about the housing market after a widely watched index showed Tuesday that home prices tumbled by the sharpest annual rate on record in the fourth quarter. The Standard & Poor’s/Case-Shiller U.S. National Home Price Index plunged 18.2 percent from the same period a year ago — the largest drop in its 21-year history.
The dismal housing market also hurt Home Depot’s rival Lowe’s Cos. Inc., which said last week that its fourth-quarter profit fell 60 percent and revenue slid 4 percent.
At Home Depot, revenue for the period ended Feb. 1 slid 17 percent to $14.61 billion from $17.66 billion last year. Same-store sales sank 13 percent for the quarter. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.
Analysts, who generally exclude one-time factors, had forecast a fourth-quarter profit of 15 cents per share on revenue of $14.67 billion.
There was also one less week in the quarter compared with the prior-year period.
Home Depot expects 2009 profit from continuing operations to fall about 7 percent, which implies earnings of approximately $2.15 billion. The company anticipates full-year total sales down about 9 percent, or to about $64.9 billion. Analysts predict annual revenue of $66.41 billion. Meanwhile, Home Depot said plans to open 12 new stores.
For the year, the company’s profit fell 49 percent to $2.26 billion, or $1.34 per share, down from $4.4 billion, or $2.37 per share. Earnings from continuing operations dropped to $2.31 billion, or $1.37 per share, compared with $4.21 billion, or $2.27 per share. Adjusted earnings from continuing operations were $1.78 per share.
Full-year revenue dipped 8 percent to $71.29 billion from $77.35 billion, while same-store sales slid 8.7 percent.