Home Depot has announced a 30% profits drop in its first quarter and a lower forecast for yearly earnings as the US housing market continues to slow.
The US housing market has been slowing since the end of 2005, and according to the International Herald Tribune newspaper, sales of homes may fall 2.9% this year, with new construction on single-person homes dropping to their lowest level since 1997.
Home Depot said net income dropped 30% from $1.48 billion (£0.75 billion) to $1.05 billion (£0.53 billion) in the three months ending April 29. Although, sales rose 0.6 % to $21.6 billion (£10.9 billion) this was the smallest increase in four years.
At a retail level, store sales fell 4.3%.
New ceo, Frank Blake, who replaced Robert Nardelli in January, said the home improvement market would 'remain challenging' for the rest of this year.
The first quarter figures were worse than expected, he said, as poor weather in the eastern half of the United States reduced sales of patio furniture and grills.