on Monday said it was closing its Expo stores and cutting 7,000 jobs, as it ratcheted back expectations for both 2008 and 2009.
The majority of the job cuts, 5,000, are related to the company's decision to shutter 34 Expo Design Center stores, 5 YardBirds stores, two Design Center stores and a bath remodeling business known as HD Bath, with seven locations. In a statement, Home Depot said the Expo business "has not performed well financially and is not expected to anytime soon."
"Even during the recent housing boom,
Expo was not a strong business," the company said. "It has weakened significantly as the demand for big ticket design and decor projects has declined in the current economic environment. Continuing this business would divert focus and resources from the Company's core 'orange box' stores."
The remaining 2,000 job cuts will come from a continued shift to a more local-based support model in various field functions and a paring back other administrative functions in stores, the company said. In total, the job cuts comprise 2% of the company's workforce.
While Home Depot said it would cut capital expenses by $1 billion in 2009, it does expect to open 12 new stores.
The company said it expects 2008 sales to decline 8% from a year ago and profits to slide 24%, before charges associated with the store closings. The consensus analyst estimate predicts a 7.5% slide in revenue to $71.53 billion and a 23.8% drop in profits to $1.73.
For 2009, Home Depot sees "continued weakness in sales," but said it would provide per-share profit guidance on its fourth-quarter earnings call on Feb. 24.
Home Depot shares were rising 5.9% to $23 in recent trading.
This article was written by a staff member of TheStreet.com.