The Home Depot Inc., the world's largest home improvement store chain, warned Tuesday that its earnings will decline this year more than previously expected because of weak conditions in the housing market and the sale of its wholesale distribution business.
The Atlanta-based company said it now expects its earnings per share to decline by 15 percent to 18 percent for fiscal 2007. In May, the company had projected an earnings per share decline of 9 percent for the year.
The earlier guidance included an estimated 18 cents of earnings per share contribution from the company's HD Supply unit for the last six months of the fiscal year.
Last month, Home Depot said it was selling the unit to a group of private equity firms for $10.3 billion. Home Depot said Tuesday it was updating its guidance to reflect the unit as a discontinued operation.
The company said it expects total retail sales to be down 1 percent to 2 percent for the year and sales at stores open at least a year to be down in the mid-single digit range.
'We look at the overall market and say there's still correction that lies ahead of us,' Chief Executive Frank Blake, referring to the housing market, told investors hours after Home Depot gave the lowered guidance. 'But again, we're pretty far along in the correction process.'