Home Depot’s Profit Off 66%
It appears you won’t be doing too much home improvement if
- You don’t have access to home equity to add that fancy kitchen
- You don’t have confidence your home’s value is going to increase with improvement
That’s what I’m getting from Home Depot’s staggering 66% drop in quarterly profit which is blamed squarely on the housing downturn that has taken the wind of out consumer spending on home improvement projects (for the above-two reasons).
From Market Watch on the disaster quarter for Home Depot:
Home Depot Inc. reported Tuesday that first-quarter net income fell 66% after consumers hurt by the declining housing market curtailed home-improvement spending and by costs it incurred to close stores and abandon some new openings in its pipeline.On a conference call with analysts, Chief Executive Frank Blake said there are more risks than opportunities throughout the rest of the year as Home Depot sees significant cost pressures from rising prices of copper, oil and other basic commodities. Housing turnover, down over 30% from the highs in 2005, remains a concern, he said.“Housing and home improvement markets remain difficult,” he said. “Conditions worsened in many areas of the country.”