by Calculated Risk on 11/14/2006 11:29:00 AM

From Reuters: Home Depot cuts outlook amid housing downturn

Home Depot Inc. on Tuesday reported a 3 percent drop in third-quarter profit that missed Wall Street estimates, and sharply cut its forecast for earnings growth this year as the U.S. housing slowdown crimps spending on big-ticket projects.

The world's largest home improvement retailer said weakness would likely continue into 2007, and its shares fell 1 percent.

"I don't think we've seen the bottom yet," Home Depot Chairman Robert Nardelli said during a conference call. "I don't see anything that suggests it's going to get significantly better in '07."
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Total sales rose 11.3 percent to $23.1 billion, falling short of analysts' average estimate of $23.3 billion. Sales at stores open at least a year, an important retail measure, fell 5.1 percent.
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Other key metrics weakened. The average purchase fell 1 percent to $58.33, the first decline in four years, while average weekly sales per store fell 7 percent. Home Depot cited softness in most departments and said consumers were taking on fewer costly improvements such as kitchen renovations and flooring projects.