The Atlanta-based home improvement retailer made $1.49 billion, or 73 cents a share, compared with the year-ago $1.54 billion, or 72 cents a share. Sales rose 11% from a year ago to $23.09 billion. Analysts surveyed by Thomson Financial were looking for a 75-cent profit on sales of $23.3 billion.
Total sales in the retail segment grew 1.1% to $19.7 billion. Comparable store sales declined 5.1% in the third quarter. The U.S. retail home improvement market has slowed significantly due to a slowing overall economy, declining home prices and equity extraction, and slowing housing turnover, Home Depot said.
Total sales in HD Supply grew by 159% to $3.5 billion, driven by acquisitions as well as organic growth.
"In the face of a very challenging housing environment, our associates showed an unwavering focus on taking care of our customers, and I want to thank them for their hard work and dedication," said CEO Bob Nardelli. "Our sales performance was softer than we anticipated, but I believe we are making the right decisions to strengthen our core retail business and build our HD Supply platform to ensure that we emerge even stronger when the housing cycle rebounds."
In the third quarter, Home Depot repurchased 24 million shares.
The company expects to post a 4%-5% gain in 2006 earnings from the year-ago $2.72 a share, on a 12% sales rise. That puts the company's earnings target at around $2.85 or so. Analysts were looking for $2.95 a share.