Home Depot plans $3.7 billion upgrade
By Mark Niesse
Associated Press
ATLANTA — The Home Depot raised its earnings estimates yesterday for its current fiscal year and announced plans to lure customers with upgraded brighter stores, easier checkouts and a number of new products.
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The world's largest home improvement retailer said it will spend $3.7 billion in 2004 to modernize its stores, improve technology and open 175 new stores.
The Home Depot said it will spend $3.7 billion this year to renovate stores and open new ones, including one at Kapolei, O‘ahu. The Maui store in Kahului, above, figured in Home Depot’s estimated 15 percent to 17 percent growth this year.
"The excitement for me is really the execution of a strategy we laid out three years ago," said chief executive Bob Nardelli as the company revealed its plans and earnings expectations for the next year.
The Atlanta-based company also said its 2003 earnings per share would rise 17 percent to 19 percent, compared with a previous estimate of 15 percent to 17 percent growth. The 2003 fiscal year ends Feb. 1.
Wall Street wasn't impressed, though, focusing instead on the company's 2004 earnings forecast, which was below what analysts had hoped for. The company said that this year it expects full-year earnings per share to grow between 7 percent and 11 percent — between $1.94 and $2.02 per share. Analysts had predicted $2.04 a share, or 12 percent growth.
Investors also noted that the company's pace of expansion slowed. The company opened 200 new stores in 2001 and 2002 and had planned to do the same in 2003, but fell short of that goal by 25 stores, opening only 175.
Shares of Home Depot closed down 49 cents, or 1.4 percent, at $34.94, on the New York Stock Exchange.
The company's new strategy includes new items such as John Deere tractors, the Ridgid line of power tools, expanded offerings of ceiling fans and new kinds of paint. Home Depot also will roll out in-home vending machines, doors that can be custom painted with photo-like images and a variety of chandeliers.
The retailer wants to continue expanding into Canada and Mexico, increase customer service and offer more services to everyone from individuals to heavy industry, Nardelli said.
Customer satisfaction at the stores is directly linked to technology improvements, such as self-checkout, cordless price-scan guns, quick price look-up and return policies that don't require receipts, said Chief Information Officer Bob DeRodes.
"We are developing an overall shopping experience that addresses our customers' aspirations."
