Home Depot swings to Q4 profit

The world's largest home improvement retailer posted fourth-quarter earnings of $342 million, compared with a loss of $54 million in the same period last year.

Total company comp-store sales increased 1.2% in the quarter, as sales declined 0.3% to $14.6 billion. The company's 20 cents per share earnings were higher than Wall Street analysts' consensus estimate of 17 cents.

“Despite the tough economic environment, we were able to make solid progress against our key initiatives in 2009,” said Frank Blake, chairman and CEO, in a prepared statement. “For the year, we grew U.S. share by more than 100 basis points; we continued to restructure our distribution network, with our Rapid Deployment Centers, now serving more than 65% of our U.S. store base; and we enhanced overall customer service as measured by third-party surveys.”

In the fourth quarter, the company’s sales performance was driven by gains in kitchen and bath, paint, flooring and plumbing, as well as its international businesses.

Like rival Lowe's, Home Depot's sales performance improved significantly in the fourth quarter, compared with the full year.

For fiscal 2009, the company reported net earnings of $2.7 billion, compared with $2.3 billion in fiscal 2008. Sales for the year declined 7.2% to $66.2 billion, and total company comp-store sales were negative 6.6%.

“In the face of a very tough selling environment, our associates did an amazing job in 2009,” Blake added. “Their hard work and dedication made these accomplishments possible.”  

In its guidance for fiscal 2010, the company revealed it intends to continue its cautious approach to store expansion by opening only six net new stores. It also expects to see comparable-store sales growth of 2.5% next year.