Home Depot's Not So Awful News

Interesting news out of Home Depot (HD) yesterday. The company raised FY 2009 earnings guidance. Or more accurately, it said the earnings decline won’t be as bad as originally thought.

Last year, HD earned $1.78 a share. In May, the company said that it expects to see EPS fall by 26% and sales to fall by 9%. That translates to full-year earnings of $1.32. Yesterday the company said to expect EPS to fall by 20% to 26%. A 20% drop works out to $1.42 which is slightly above Wall Street’s consensus of $1.40.

Make no mistake, this isn’t great news but it’s not awful and all the news until now has been awful. HD’s earnings peaked in 2007 at $2.83 a share so we’re going to see earnings fall in half—so has the stock price.

At its current price, I wouldn’t say Home Depot is a good buy, but it’s not unreasonable to see year-over-year earnings increases within a few quarters. If there’s more good news from HD, it could be a good buy before the end of the year.

Disclosure: No position

Comments

[HVAC:]

Holy Cow! Your rose colored glasses must be fogged over.
This company will see further declines in my opinion.
The stores in my area are almost empty compared to a yr ago.
removing cashiers in a warehouse atmosphere with bulky non scannable items is frustrating.

Sincerely:
A Tradesperson

Jun 11 08:05 AM

[prudentinve...:]

My local HD has been eerily quiet in recent weeks. It was in a frenzy in Spring 08. This is merely an anecdotal observation, perhaps without real significance, but makes me stay clear of HD at current levels.

Jun 11 04:30 PM

[James Quinn:]

All is well.

theburningplatform.com...

Jun 11 08:26 PM

[2Labradors:]

HD is a great buy here around 24 bucks. Pretty decent dividend too. This is a great play on the (supposed) housing "bottom". Whether housing bottoms in a few months or a few years, HD is sure to benefit and pull through strong.

Jun 11 10:08 PM

[HDnotforme:]

So seriously here is the thing. Home Depot is hiring people for 90 days, PERIOD.! Yes, now the biggest do-it-yourself store is worse than Wal-Mart. Yes. I am an employee at the Home Depot. However my 90 days is almost up. Yes I was informed after the interview process that the job is only for 90 days. I am not the first round of 90 day employees they have gone through. Myself as well as roughly 10-15 other people at the store I work at will be out of a job within the next month or so. Honestly if I had known all of these before I even applied I wouldn't have. I would have gone right into the place I hate the most, Wal-Mart, and got me a nice job while I am in college, and not worry about finding another, and another, and another. So is this what things have come to? Home Depot pinching so many pennies, that giving an employee medical after 90 days costs them too much, so we are all just disposable? Huh. Where am I? Some sort of twilight zone? Seroisly here is the problem.
The 90 day employees have been told there is no way in hell they will be kept on, so what gives them incentive to even try to do a good job? Home Depot has 30,000 plus products in every store, after almost 2 months, I just barely know my own department, let alone a few things around the store. So Home Depot is just cycling through people that don't know anything. Well... Customers will find out. Why do I want to shop somewhere where I know that 50% of the people have no clue what they are talking about, especially when Home Depot prides themselves on having experts in every area of home building, from electric to carpet to plants. I can't get advice anymore at Home Depot because nobody knows a thing. Also what about other employees. With 90 dayers comming in both as a large group every new time period, as well as one or two new ones every week, all of the permanent employees are left to train and retrain people like myself who had little to no knowledge of the department I was put in. Now that I know just enough to help people without involving one of the permanent employees, I am getting canned. Fine, I knew I would. But really, that doesn't make it any better.
So what if all business' decide to do this little hop skip and a jump to get around 'paying' for something that they do not even need to offer. Personally I would take a job over crappy health insurance any day.
The cyclical nature of the Home Depots new strategy allows an employee to work there one time, and one time only. I, or any other person can not re-apply, or be re-hired starting the 90 day process again. After the 90 days, we are NOT re-hireable. Nice. Thanks a lot Home Depot for being so "American".
Honestly I think the policy is no more than sad. As permanent people leave, such as I have seen in the past two months, they are not being replaced. Nope. Not at all. My department has lost 3 permanents, leaving 4 permanents, one which only works weekends, and 2 of us 90 dayers. So perhaps another one or two permanents drop off in the next cycle or two of 90 dayers. It will be THE BLIND LEADING THE BLIND. LOL. Yes it will. Come to Home Depot so we can show you how to... well we are a DO-IT-YOURSELF store. Ha Ha.
Now, my long rant may not have been completely coherent, and definatley had no defined paragraphs with a thesis and introduction. But I hope people read this and realize what is going on here. Yes, automotive plants have closed, people have lost jobs and been put on furloughs, but seriously people. What is going on? I wish I knew.
Well folks, have a great summer, and next time you hit up the Home Depot for your do-it-yourself projects. Either ask the person you talk to how long they have worked there, or just forget about it and go to some place you respect, such as your locally owned and operated lumber yard, hardware store, locksmith, or nursery. These places could use your business, don't let these large corporations control your thoughts that they have smarter sales people or lower prices. Who wants to shope somewhere with a commercial that says "That's the power of the Home Depot" anyway.

Jun 15 12:50 AM

[Bonzohazard:]

I was hired on temp, but not informed of said status. Fact is, i have 20 days left, and I have three department heads and an operations manager batting for me and talking to the store managers. Yesterday, the operations manager approaches me and tells me of his progress, and informs me that I will likely be getting a FT sales position on the floor. I work the Freight now, and instead of giving up and buckling under my worries and stress, I just woked hard, showed my worth. I'm not a success story yet, but hopefully I will be.

Jul 10 07:29 AM