Home Depot Cautious On Housing Market

ATLANTA-Home Depot executives are predicting that a continued lagging home-construction market will likely not improve until some time in 2008 and will drag on the company’s sales this year. Officials forecast same-store sales to drop in 2007 in the mid-single digits, while total sales are expected to come in between flat and a 2% gain.

Earnings per share are also expected to decline this year, by 3% to 8%. But with initiatives that the company’s leadership plans to put into place this year, earnings and sales are each expected to rise 5% annually beyond 2007.

To invigorate the company, executives plan to spend $2.2 billion this year on investments in employee recruitment, training and benefits; promotional pricing of products; merchandising; the renovation of stores; and initiatives like customer-loyalty programs. Total capital expenditures this year are projected to increase 29%, to $4.5 billion.