Attention to customer comfort pays off nicely for Home Depot

Lowe's, the No. 2 home improvement chain, also saw profits rise.
ATLANTA (AP) -- More attention to customer service and technology upgrades helped Home Depot post its best quarterly gain in same-store sales in four years and a 22 percent gain in profits in the third quarter.
The results, announced last week, handily beat Wall Street expectations. The nation's largest home improvement store chain also raised its full-year earnings per share growth guidance.
In the last several months, the company has pumped millions of dollars into renovating its stores to give them a softer look, something rival Lowe's has benefited from. Home Depot stores are brighter, aisles are cleaner and more employees are helping customers on the floor. Hundreds of self-checkout terminals have been added to make the purchase process swifter.
"We are staying on strategy by investing in our associates, our stores and technology," chief executive Bob Nardelli said.
Earnings report
Atlanta-based Home Depot said it earned $1.15 billion, or 50 cents a share, for the three months ending Nov. 2, compared with a profit of $940 million, or 40 cents a share, for the same period a year ago.
Analysts surveyed by Thomson First Call were expecting earnings of 46 cents a share.
Revenue in the quarter was $16.6 billion, a 15 percent jump from the $14.48 billion the company recorded a year ago.
Same-store sales -- a measure that compares sales at stores open at least a year -- increased nearly 8 percent in Home Depot's best quarterly comparable sales performance since the fourth quarter of 1999. Same-store sales are considered a good indicator of retail health.
"Our customers are experiencing a better shopping environment as a result of the significant progress we are making in every area of our business," Nardelli said. He said, however, there is room for improvement in some areas, noting there is still plenty of opportunity for same-store sales growth.
Lowe's profit
Lowe's, the nation's No. 2 home improvement store chain, reported a profit Monday of $452 million in the third quarter, a 33 percent jump from a year ago. It cited a robust 12 percent gain in same-store sales. In a conference call with analysts, Nardelli said Home Depot's stores in competitive markets -- including Charlotte, N.C., Indianapolis and Washington -- performed particularly well in the quarter.
Chief marketing officer John Costello said Home Depot's brand presence, its "You can do it, we can help" advertising campaign and its do-it-yourself clinics are helping drive company growth.
Home Depot said that in the quarter its average sales ticket grew 5 percent to $52.10 compared to a year ago, the highest average ticket in the company's history. It cited increased sales of lumber, appliances, outdoor power equipment and building materials.
For the first nine months of the year, Home Depot said it earned $3.35 billion, or $1.46 a share, compared with earnings of $2.98 billion, or $1.26 a share, for the same period a year ago. Nine-month revenue was $49.69 billion, compared to $45.03 billion in 2002.
Home Depot reiterated its annual sales growth guidance of 9 percent to 12 percent and raised its full year earnings per share growth guidance to 15 percent to 17 percent. It had earlier projected full-year earnings per share growth to be 9 percent to 14 percent.
Home Depot operates 1,643 stores in the United States, Canada and Mexico, including local stores in Boardman and Niles. The company has about 300,000 employees. It will have increased its employee rolls by 40,000 by the end of the year.