The Home Depot reported fiscal second quarter profits fell 7.2 percent, spurred by high unemployment rates and a still-difficult housing market. The drop in profits, however, was less than expected, buoying the company and prompting share prices to rise. Sales in garden products performed better than average.
According to a New York Times story, Home Depot reports transactions in the United States increased year-over-year for the first time in five years and same-store sales rates improved in Florida and California.
Despite the bright spot in same-store improvement, CEO Frank Blake says he does not expect positive same-store sales to register until the second half of 2010.
“Concerns about the housing market, rising unemployment and softness in the overall economy continue to pressure consumers,” Blake says. “Our business performed well in a down market, we captured market share and drove operating productivity. The combination made for a solid quarter relative to our plan.”
The second quarter results also reflect the impact of closing EXPO stores. Home Depot earned $1.12 billion for the three months that ended Aug. 2. That’s down from $1.2 billion during the same three months last year.
The company cut costs to the tune of 8 percent of the operating expenses; however, revenue dropped 9 percent.