Shares of Home Depot Inc. declined Tuesday, after the world's largest home-improvement store chain said adjusted profit beat expectations but cautioned it is more comfortable with the low end of its 2008 forecast.
The company said profit totaled 41 cents per share, excluding one-time items, topping analysts' expectations for earnings of 37 cents per share. However, same-store sales, or sales in stores open at least one year _ a key retail metric _ fell 6.5 percent, while revenue fell 3 percent to $17.91 billion.
The company did not give a detailed outlook for the rest of 2008. It said only that it is "more comfortable" with the low end of its previous guidance for a 19 percent to 24 percent decline in adjusted earnings per share from continuing operations.
Goldman Sachs analyst Matthew Fass said a seasonal shift that led to a later start to the fiscal year helped results. Adjusted for the shift, same-store sales fell about 9 percent to 9.4 percent, he said, adding that the results show that the home-improvement sector is "bumping along the bottom, lagging housing turnover by several months."
He expected shares to fall due to the company's reticence about guidance, and expectations that rose during the quarter.
Indeed, shares fell $1.50, or 5.2 percent, to $27.37. The stock has fallen from June 2007 high of $41.19 to bottom at $23.77 in January, and has since traded in a tight range.
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