Home Depot sees further sluggish home sales into ‘08

New York -- At the Goldman Sachs retailing conference held here on Sept. 5, Home Depot CEO Frank Blake predicted 2007 would continue to be a tough year in the home improvement industry, while “our assessment is that much of '08 will continue to face into headwinds."

Blake said Home Depot expects earnings-per-share will fall 12 percent to 15 percent in 2007, not including the benefit of a planned $10.7 billion share repurchase plan.

"We had hoped that we'd start to see some bottoming and some beginning of the (housing) recovery in the back half of '07," Blake told investors and analysts during the conference, which was broadcast over the Web. "We don't think that's going to happen. From my perspective it's going to be a longer path than certainly I would have initially envisioned.”

Craig Menear, executive vp-merchandising for Home Depot, said the company was focusing on a number of marketing initiatives, including selling “whole projects” to consumers and concentrating on the company’s core categories.

“We are in the project-selling business,” Menear said. “At the same time, we’ve got to have the right position in the store. Today we’re working through the budgeting process to really go after the key segments, and that’s a really different approach than what we had in previous years.”

Menear also outlined a "focused bay" merchandising strategy where product assortments are divided into four categories: leadership, traffic/commodity, core and emerging.