Home improvement revenues continue to ebb nationwide as The Home Depot, the world's largest retailer in the category, reported this morning that third-quarter 2009 net earnings shrank to $689 million, nearly a 9% slide from $756 million in the third quarter of 2008, in part because of continued weak sales to pros.
Sales dropped 8% to $16.4 billion from $17.8 billion in the July-September 2008 period. Sales worldwide only at those stores open in both years fell 6.9% while comparable-store sales in the United States decreased 7.1%.
"Pro sales are under significantly more stress than DIY (do-it-yourself) sales, and we have not seen a significant recovery in the pro business," chairman and CEO Frank Blake told analysts in a conference call. Sales categories in which pros typically predominate, such as lumber, electrical, hardware, and millwork, all underperformed in comparison with sales of more DIY-related categories, such as paint, flooring, plumbing, and gardening supplies, company officials said. The third quarter's average sales ticket of $51.89 was 7.1% lower than in the July-September 2008 period, and the number of sales tickets worth $900 or more--a category that accounts for 20% of all transactions--dropped 10% from the year-earlier period. In contrast the number of sales tickets worth no more than $50 rose slightly.
The news comes a day after Lowe's, The Home Depot's chief rival, announced its third-quarter profits fell 30% to $344 million in the third quarter from $488 million in the year-earlier period. Sales at Lowe's fell 3% to $11.37 million.
"There is still a great deal of pressure in the housing and home improvement markets, though there are some positive signs of stabilization," Blake said in a prepared statement.
"Our business continues to perform well in a difficult environment," Blake's statement added. "We grew market share in the quarter, continued to transform our business and improved customer service." He did not during the analysts' call that there were some signs of improvement in the most hard-hit residential areas of the country, particularly California, Nevada, and Arizona.
The Atlanta-based retailer also announced that it expects sales to be down 9% for the year.
At the end of the third quarter, The Home Depot operated 2,242 stores, which includes 1,975 in the United States.