Home Depot Inc., the largest home- improvement retailer, said on Tuesday its first-quarter profit fell 66 percent as consumers grappling with the deepest U.S. housing slump in over 25 years left the company's sales affected.
Home Depot fell 6 percent at $27.17 in morning trade on the New York Stock Exchange after rising soon after it released its results before the market opened.
Net income decreased to $356 million, or 21 cents a share, from $1.05 billion, or 53 cents, a year earlier, on costs to close stores, Home Depot said today in a statement.
Profit excluding some expenses was 41 cents a share, beating analysts' estimates by 4 cents.
Results included a charge of $543 million to close 15 underperforming U.S. stores and scrap plans to open 50 stores that had been in the company's agenda.
The company managed well in a difficult environment, Sanford Bernstein analyst Colin McGranahan said in a research note, adding that modest gross margin expansion was also a positive sign.
Revenue for the three months through May 4, excluding the wholesale-supply unit Home Depot sold last year, fell 3.4 percent to $17.9 billion.
Sales fell 3.4 percent to $17.9 billion, exceeding analysts' estimates of $17.63 billion. Sales at stores open at least a year fell 6.5 percent. The total excluded the wholesale-supply unit Home Depot sold last year.
The crumbling U.S. housing market has affected Home Depot and smaller rival Lowe's Cos as home values continue to plummet which results in slower sales in housing renovations.
On Monday, Lowe's said first-quarter profit fell 18 percent while total sales declined 1.3 percent. The Mooresville, North Carolina, retailer cut its full-year earnings forecast.