The Home Depot Reports Record Second Quarter
“This quarter we demonstrated our strategy of enhancing our core through various initiatives aimed at improving store efficiency and customer service while executing on expanding our business through The Home Depot Supply to build strong, sustainable platforms for growth,” Bob Nardelli, chairman and president/CEO, said in a statement.
The company affirmed its fiscal 2005 sales growth guidance of 9-12% and increased its earnings per share growth guidance from 10-14% to 14-17%.
The Home Depot said it continues to invest in its stores to improve store efficiency and the overall customer shopping experience. In 2004, the focus was on enhancing the front-end of the store through self-checkout and a new point-of-sales system. For 2005, the company's focus is to enhance the receiving process. Back-end automated receiving (BEAR) is in more than 1,000 stores and will be in all U.S. and Canadian stores by the end of the third quarter. Among other things, this initiative improves operational execution and productivity, enabling the company to reallocate resources to the selling floor.
Through its approach of adding innovative and distinctive merchandise, the company said it achieved a record second quarter average ticket of $57.54, up 5.1% over the prior year.
During the second quarter, the company opened 44 net new stores, including the acquisition of seven Contractors' Warehouse stores in California. As of late August, the total store count was 1,940.
The company reported its services business grew 28% during the second quarter of fiscal 2005. The Home Depot saw strong growth in categories such as roofing, countertops, kitchens, windows and soft flooring. In the second quarter, the company expanded its services platform through the acquisition of Viplex Industries, which is involved in the window and siding installation market in California.
The Home Depot Supply reported strong double-digit sales growth during the second quarter. It represents about 4% of the company's total sales. The Home Depot Supply operates on three platforms: Maintenance, Repair and Operations (MRO), Builder and Professional Supply. The company said it has expanded its market through The Home Depot Supply over the past four years.