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Home Depot, Limited gain
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February 22, 2000: 12:48 p.m. ET
Two big retailers beat 4Q forecasts on strong sales growth
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NEW YORK (CNNfn) - Home Depot and Limited Inc. posted better-than-expected fourth-quarter earnings Tuesday, reflecting a surge in sales.
Additionally, Limited announced a $200 million share repurchase program.
For the quarter, Home Depot, the Atlanta-based home improvement retailer, earned $578 million, or 25 cents per diluted share, up nearly 40 percent from $418 million, or 18 cents per diluted share, a year earlier.
The net earnings growth marked the company's biggest quarterly profit gain since 1992. Analysts polled by research firm First Call Corp. predicted earnings of 24 cents a share for the latest quarter.
Home Depot posted sales for the quarter of about $9.17 billion, up 26 percent from $7.26 billion a year ago as the company opened 52 new stores, boosting its worldwide chain to more than 900.
Sales from stores open at least a year also were strong, climbing 9 percent for the period despite severe weather in several parts of the country during November and December, which depressed sales somewhat.
For the year, Home Depot earned $2.32 billion, or $1 per diluted share, up from $1.61 billion, or 71 cents a share, in 1998. Sales jumped 27 percent to $38.4 billion, including a 10 percent increase in comparable-store sales.
Sales were helped by a strong increase in building material sales, which was helped by an unseasonably warm winter during early 1999.
Home Depot President and CEO Arthur Blank told analysts in a conference call Tuesday that the company's successful appliance business initiative, now in 23 markets nationwide, will continue to use General Electric (GE: Research, Estimates) as its primary supplier.
Whirlpool (WHR: Research, Estimates) shares have suffered recently out of concern the company might be left out of the initiative all together.
Blank hinted that other appliance makers eventually may be included in the program, but for now the retailer is happy with GE's line.
Home Depot (HD: Research, Estimates) shares climbed 3/4 to 54-1/2 shortly before noon Tuesday.
Limited Inc.
Limited Inc. (LTD: Research, Estimates), the Columbus, Ohio-based clothing retailer, posted fiscal fourth-quarter earnings of $572.3 million, or $1.31 a share, up from $423.5 million, or 92 cents a share, a year earlier.
Analysts surveyed by First Call had projected earnings of $1.18 a share.
Improved performance of the company's apparel brands, which include Express, Lerner New York, Lane Bryant, Limited Stores and Structure, spurred the strong results combined with a healthy report of another Limited line, Intimate Brands Inc., (IBI: Research, Estimates), the company said.
Sales for the quarter rose to $3.3 billion from $3.1 billion a year ago. Comparable store sales increased 5 percent.
For the fiscal year, ended Jan. 29, net income rose 40 percent to $445.5 million, or $1.93 a share, from $318 million, or $1.35 a share, a year ago. Sales rose to $9.5 billion from $8.8 billion, with comparable store sales increasing 9 percent.
Results for the quarter were affected by a change in accounting for gift certificates, store credits and layaway sales, which reduced fiscal year earnings by 4 cents a share and year-ago earnings by 3 cents a share.
The company also approved a $200 million share repurchase program, which it will conduct in the open market or through privately negotiated transactions, the company said.
"Our decision to authorize a share repurchase program demonstrates our confidence in the strength of The Limited Inc. and our future, and our commitment to creating sustained growth in shareholder value," said Chairman and CEO Leslie Wexner.
The Limited Inc., through Express, Lerner New York, Lane Bryan, Limited Stores and Henri Bendel, operates 2,913 specialty stores. The company also owns about 84 percent of Intimate Brands Inc., which includes the Victoria's Secret, Bath & Body Works and White Barn Candle Co. brands.
Limited shares were up 1/4 to 30-7/8 in late-morning trading Tuesday. 
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Home Depot
The Limited
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