Home Depot sales decline

Bloomberg News Service

Home Depot Inc.'s fourth-quarter earnings fell 3.4 percent and sales declined for the first time in the history of the world's largest home-improvement chain because of customer defections to rival Lowe's Cos.

Net income dropped to $686 million, or 30 cents a share, from $710 million, or 30 cents, a year ago, the Atlanta-based company said in a statement. Revenue fell 2 percent to $13.2 billion in the three months ended Feb. 2, while sales at stores open at least a year slumped 6 percent.

Home Depot has two stores on O'ahu, one in Kona, one on Maui and one under construction on Kaua'i that is scheduled to open this summer. It is also planning a sixth store in Hilo.

Chief Executive Officer Robert Nardelli's reliance on combining divisions and keeping inventory lean to cut expenses is no longer helping to boost profit. The retailer is counting on a $250 million store-renovation program to help compete with Lowe's, which also emphasizes home-decor items. Lowe's has been expanding into bigger cities where Home Depot has dominated.

"Home Depot now has to find a new formula for growth," said John Waterman, chief investment officer of Rittenhouse Financial Services.