It was probably predictable that the housing market would catch Home Depot (HD) from behind and drag it to the ground. That certainly happened last quarter.
Home Depot reported a fiscal 2008 fourth quarter consolidated net loss of $54 million, or $0.03 per share, compared with net earnings of $671 million, or $0.40 per share.
Sales fell 13.7 percent to $14.6 billion from the fourth quarter of fiscal 2007. Last year had one less week so all of the weakness was not in sales per day. Same-store sales were off over 9%.
To make matter worse, Home Depot expects sales to be down another 9% this year.
The news shows how the retail industry’s problem has moved from the streets and malls into operations which allow people to improve their homes which they may not be able to sell for years. Since their house is the largest asset that most Americans have, the fact that they would let it go to pot is extraordinary. It is an excellent indication of how broke people really are.
Douglas A. McIntyre
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