In the first quarter of fiscal 2005, the company recorded $86 million of expense related to the anticipated disposition of its interest in the underlying real estate and $20 million of expense related to inventory markdowns. The remaining 34 EXPO stores are profitable and will continue operating. Affected EXPO customers will be served by existing The Home Depot and EXPO stores.
The Home Depot reported net earnings of $1.2 billion, or 57 cents per diluted share, for the first quarter of fiscal 2005, up 16.3% compared with last year's first quarter. Sales for the period increased 8.1% to $19 billion. Growth in comparable store sales was 2.1%.
The company reconfirmed its fiscal 2005 sales growth guidance of 9% to 12% and its earnings per share growth guidance of 10% to 14%.
The Home Depot achieved a record average ticket of $58.25 for the first quarter of fiscal 2005, an increase of 5.7% compared to the prior year. This was attributed to improvements made in its product mix, including an expanded assortment of patio furniture, outdoor grills and power tools. The Home Depot plans to expand its appliance offerings with the LG line during the second quarter.
In the first quarter, the company opened 21 new stores across Canada, Mexico and the United States, bringing the total store count to 1,911.
The growing demand for “do-it-for-me” services led to 16% growth of the company's services business during the first quarter. The Home Depot saw strong growth in categories such as roofing, kitchens, countertops, windows and carpet installation and expects to sustain double-digit growth in this area.
At the end of the first quarter, 9% of The Home Depot's stores were located in Canada and Mexico. Also, the company continues to build upon its plan to enter the retail market in China.
The company also reported a double-digit sales increase for The Home Depot Supply in the first quarter. It operates five The Home Depot Supply stores, 11 The Home Depot Landscape Supply stores, and two The Home Depot Floor Stores.