NEW YORK - Home improvement retailer Home Depot cut its 2007 earnings outlook on Tuesday, citing weakness in the U.S. housing market and said it was launching a tender offer for 250 million shares.
Home Depot said it expected 2007 earnings per share to fall 15 percent to 18 percent from a year earlier, to a range of $2.30 to $2.36 per share.
The company earned $2.79 per share in fiscal 2006.
Home Depot said it expected 2007 total retail sales to decline by 1 percent to 2 percent and same-store sales to fall by mid-single digits.
Previously, Home Depot had forecast total sales growth of 0 percent to 2 percent.
The Atlanta-based company said its updated targets reflect its HD Supply business, which provides building materials to contractors, as a discontinued operation. That business is set to be sold for $10.3 billion to a group of private equity firms.
Home Depot's May forecast, which had included the discontinued business, had called for a 9 percent decline in annual profit.
Stripping out a contribution by the HD Supply business, the company's earlier forecast had estimated a 15 percent decline in full-year profit to $2.36 per share.
"While we expect the housing market to remain challenging for the rest of 2007 and into 2008, we plan to continue our reinvestment plans for the long-term health of our business, understanding that it will put short-term pressure on earnings," Chief Financial Officer Carol Tome said in a statement.
The company also said it was launching a tender offer for 250 million shares for between $39 and $44 per share, or up to $11 billion. The tender offer is set to expire on August 16, it said.

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