It's been a home improvement extravaganza this week in The Motley Fool Take, with both Home Depot and Lowe's reporting earnings. Lowe's has been gaining on the orange-aproned behemoth, but you can never count the Depot out. Read our Dueling Fools special for opposing viewpoints on the companies.
In today's Motley Fool Take:
- Home Depot Hangs Tough
- Quote of Note
- Head Off Layoff Blues
- Shameless Plug: Sources for Stock Ideas
- Fleming Still Flailing
- Discussion Board of the Day: Living Below Your Means
- Quick Takes: Monsanto, Clear Channel, Overture, more
- And Finally...
Home Depots Hangs Tough
Sales for the quarter ended Feb. 2 slipped 2% to $13.2 billion, and comps dropped 6%. Using a 13-week basis for comparison (2001's Q4 had 14 weeks, while this year's only had 13), sales were actually up 5%. For the year, they improved 9% to $58.2 billion, with comps flat.
Home Depot's quarterly comps, while negative, ended stronger than the retailer -- and the market -- had expected. The company warned last month that comps could fall for the quarter by as much as 10%.
Earnings for the year reached $3.66 billion, 20% ahead of 2001's results. Quarterly earnings dropped, however, to $686 million from $710 million. Per share, Home Depot turned out $0.30 in Q4, three cents better than analysts anticipated.
The company opened 61 new stores in Q4 and 203 total during the year. It now peddles lumber, nails, and the like in 1,532 stores, and will expand its reach by opening 200 more in 2003. As announced last month, the retailer will shell out an additional 21% for capital expenditures in 2003 as it builds, remodels, and updates stores, both new and old.
Reports that Home Depot is being eaten alive by rival Lowe's
Quote of Note
"Ah, but a man's reach should exceed his grasp, or what's a Heaven for?" -- Robert Browning
Head Off Layoff Blues
When's the best time to negotiate a severance package? Actually, it's when you get hired.
Having provisions spelled out up front in case of a layoff is a negotiation tool often used by upper-level executives. But even if you're not a corner-office hire, there's no reason that you can't ask for a few assurances if worse comes to worst.
When you get a formal job offer, ask for an agreement to be included (e.g., three months' pay in severance, etc.). Should you lose your job, you'll have your contract or offer letter with specific guarantees and possibly legal rights in hand. (Just remember where you filed the sucker!)
If you're already working and have been taking advantage of the Employee of the Month parking spot, then there's usually not much wiggle room on negotiating a better deal -- especially in a mass layoff situation. Most companies consult with a pack of lawyers to make sure the fateful day goes smoothly. While they aren't too fearful of lawsuits, they are concerned about bad press -- both their outside reputation and internally with remaining employees.
Still, there are some measures you can take to soften the layoff blow. Here are a few tips we got from our resident Human Resources Fool:
Get everything you've been promised in writing. It probably will be, anyway. Remember, you cannot be forced to sign something on the spot. Take the paperwork with you and agree to drop it off after you've had time to review it with a cool head. Consult a lawyer if need be -- especially if a lot of money is on the line, or if you were axed before a bonus/commissions/vesting period or some other important deadline. (If you are dismissed "with cause," your former employer may not owe you one red cent.) Then schedule a time to come back with questions and to show off your new tan.
If you have some notice before the day the ax finally falls, do a little research. Call friends who have been through it -- in this economy, chances are a few of your pals can commiserate -- and compare severance package notes. If nothing else, misery loves company.
Volunteer to stay for another 30 or 60 days. If you can set your emotions aside, offer to help with the transition, shutting down your department or training your remaining coworkers. Leaving on good terms is worth it to your employer. And by prolonging full pay and benefits, you can push off your severance for a little while. Added bonus: a glowing reference and the satisfaction of being a bigger person than most.
Consult the employee manual. If you're determined to walk out the door with one of your employer's valuables, take the employee manual. You can glean some important info about policies, procedures, and how long you can hang on to that sweet dental coverage.
For more job-related tips, check the Ask the Headhunter discussion board, where folks chat about everything from negotiating a better salary in a weak economy to avoiding career suicide.
Shameless Plug: Sources for Stock Ideas
Everybody's looking for stock ideas -- well, okay, maybe not everybody -- but where do start? First and foremost, begin with a source you can trust. But get a good deal, too. Right now, when you subscribe to our monthly gem The Motley Fool Select, you'll also get our annual compendium Stocks 2003 for free -- bundled together like twins on a cold winter's walk in the park. It's a classic combo no Fool will want to be without.
Fleming Still Flailing
Shares of Fleming
The investigation reportedly centers on the company's accounting and vendor trade practices, as well as some past earnings and same-store sales presentations.
Besides the layoffs, which will involve about 1,800 employees, the realignment announced today also includes some facility closures. Management estimates the program -- which will result in charges of some $290 million, with an actual cash cost of about $115 million -- will provide $60 million in annual savings.
Along with the SEC investigation, the other major issue for the nation's top wholesale food supplier has been the loss of its top customer, Kmart. After months of uncertainty, Kmart severed the relationship, and suddenly Fleming had lost about 20% of its revenue stream.
These issues -- combined with credit downgrades from Moody's, Fitch, and Standard & Poor's -- have sent the stock into a frightening nosedive. Since March of last year, the company has lost 90% of its value.
Chief Financial Officer Mark Shapiro scoffs at suggestions Fleming might fall into bankruptcy, telling Dow Jones Newswires earlier this month that cash flow remains positive and there is no material debt maturing until 2007.
Maybe so, but this is currently a very risky stock, and not one we're interested in at this time.
Discussion Board of the Day: Living Below Your Means
Are you pinching pennies? Would you like to learn how to spend less than you earn? All this and more -- in the Living Below Your Means discussion board. Only on Fool.com.
Wanna hear a corny joke? What did Baby Corn say to Mom Corn? Where's Pop Corn? Well, speaking of corny, Monsanto
Remembering the Titan
Calgon, take me away! Calgon Carbon
Broadcaster Clear Channel
Proving that AltaVista was simply an appetizer, Overture
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- Nine Stocks to Watch: Tom Jacobs and Jeff Fischer offer parting words on the Rule Breaker Portfolio's holdings.
- Hasbro's Back in the Game: Matt Richey says its reputation may still be tainted, but its fundamentals aren't.
- Overstock Overrated: Overstock bites the hand that needs it. My, what big teeth you have.
- Leaving Work for Baby: A 1993 law granting more parents unpaid leave from work after childbirth had little effect.
- In Fool's School, step-by-step Foolish investing. Here's a path you can follow -- with lots of resources.
Bob Bobala, Robert Brokamp, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim
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