Home Depot stock will hit an all-time high today. They just reported excellent results according to their press release, which will be parroted by the pundits on CNBC. They are one of the better run retailers in the country. The reason they are doing relatively well is that they stopped building stores years ago, closed underperforming stores, and focused on the existing stores. They now operate 2,260 stores.

The MSM faux business journalists will be reporting the wonderful sales and profit figures versus last year. The internet is a wonderful thing. It took me two minutes to find their 3rd Quarter 2006 earnings announcement, which I’ve included below.

They are boasting about the $19.5 billion of sales they achieved this quarter. Seven years ago they achieved $23.1 billion of sales with 150 less stores. For the mathematically challenged, their sales are 16% lower than they were seven years ago.

But it gets better. They are thrilled with the $1.4 billion profit in the current quarter. It seems they generated a profit of $1.5 billion in 2005 and 2006.  So, in 2005 they made a profit of $1.5 billion on revenue of $20.4 billion, with 300 less stores than they operate today. I would say the ROI on those additional 300 stores hasn’t been so hot. No biggie. It only cost them $3 billion to build those stores to generate $100 million LESS profit.

You won’t get this info from Jim Cramer or the bimbos on CNBC. They will just continue the charade. Their job is to misinform and obfuscate the fact that our retail world is in a terminal contraction phase. Even the best retailers make less money today than they made in the mid-2000’s. Those are the facts.


The Home Depot Announces Third Quarter Results; Raises Fiscal Year 2013 Guidance

ATLANTA, Nov. 19, 2013 /PRNewswire via COMTEX/ — The Home Depot®, the world’s largest home improvement retailer, today reported sales of $19.5 billion for the third quarter of fiscal 2013, a 7.4 percent increase from the third quarter of fiscal 2012. On a like for like basis, comparable store sales for the third quarter of fiscal 2013 were positive 7.4 percent, and comp sales for U.S. stores were positive 8.2 percent.
Net earnings for the third quarter were $1.4 billion, or $0.95 per diluted share, compared with net earnings of $947 million, or $0.63 per diluted share, in the same period of fiscal 2012. For the third quarter of fiscal 2013, diluted earnings per share increased 50.8 percent from the same period in the prior year. The prior year results reflect a nonrecurring charge of approximately $165 million, net of tax, or $0.11 per diluted share, due to the closing of seven stores in China. On an adjusted basis, the Company reported a 28.4 percent increase in diluted earnings per share from the same period in the prior year.


The Home Depot Announces Third Quarter 2006 Results

Sales of $23.1 billion Net earnings of $1.5 billion Earnings per share of $0.73

ATLANTA, Nov 14, 2006 /PRNewswire-FirstCall via COMTEX News Network/ — The Home Depot(R), the world’s largest home improvement retailer, today reported third quarter net earnings of $1.5 billion, or 73 cents per diluted share, compared with $1.5 billion, or 72 cents per diluted share in the same period in fiscal 2005.

Sales for the third quarter of fiscal 2006 totaled $23.1 billion, an 11.3 percent increase from the third quarter of fiscal 2005.

9 thoughts on “IT’S ALL RELATIVE – ISN’T IT?”

  1. Yes, even on Valentines Day you can phone a HomeDepot # and have roses sent to your honey.
    Business is that good, it is a wonderful world.

  2. Admin must not be aware that the Dow Jones Industrial Average just soared above 16,000 for the first time in the history of the index.

    Bulls are rejoicing, pigs are flying, and jackasses are buying.

    Don’t get left out! NOW is the time to buy!

  3. I wonder if abysmal Q4 2013 sales numbers will cause the market to crash.

    Also, these little one-off pieces are some of my favorite stuff you write Admin. Stores like JCP, Sears and Home Depot are the cornerstones of retailing in my town and many just like it. Your long tirades are always appreciated and greatly anticipated, but learning that national trends match my personal anecdotal evidence really strengthens my resolve to not get caught with my pants down when the shit hits the fan.

    Thank you, and keep up the good fight!

  4. Stock goes up on less earnings when compared to that of 7 yrs earlier, only in America. Like Stuck said, better get out there and buy, buy, buy, especially on margin, that way you “make more” when the price goes down, right? John


    Wal-Mart’s Response To The Weakest Holiday Season Since 2009: $98 TVs

    Submitted by Tyler Durden on 11/19/2013 08:59 -0500

    The last week has seen retailers begin to push “the promotional panic button” as holiday sales are expected to collapse to the weakest since 2009 (as we discussed here, here, and here). As Bloomberg reports, faced with wary shoppers and a shorter holiday season, retailers are piling on deals as they jockey for market share and are faced with “too much inventory, which doesn’t bode well for 2014.” U.S. retail sales excluding autos and gasoline grew 0.2% in October, half the month-earlier gain leaving this year likely to be the worst and most promotional shopping season since 2008 and perhaps Wal-Mart’s $98 32-inch flat-screen TV is just the start of the deflationary spiral that benefits the stagnant incomes of the middle-class.

    Via Bloomberg,

    U.S. retailers are discounting earlier than ever as they brace for the weakest holiday shopping season since 2009.

    Wal-Mart Stores Inc. (WMT) is dangling a 32-inch flat-screen TV for $98, down from $148 last year. Sears Holdings Corp. has waived layaway fees and its Kmart chain is introducing a rent-to-own program. More than a dozen retailers are opening earlier, or for the first time, on Thanksgiving Day. Among the attention-grabbing stunts: a $1 million jackpot for one of the first shoppers to visit Gap Inc. (GPS)’s Old Navy chain on Black Friday.

    For the fourth year in a row, disposable incomes in 2013 have only inched up.

    “The consumer is more deal-driven than ever,” Ken Perkins, president of researcher Retail Metrics LLC, wrote in a Nov. 14 note. “Discretionary dollars for holiday spending are limited for the large pool of lower- and moderate-income consumers due to lack of wage gains this year coupled with the increased payroll tax.”

    “We will be seeing promotions significantly above the current 30 percent off, which are the opening table stakes,” said Craig Johnson, president of Customer Growth Partners, a New Canaan, Connecticut-based consulting firm. Stores have too much inventory, which “doesn’t bode well for 2014.”

    The earlier openings are no panacea because they’ll simply pull purchases forward, rather than driving incremental sales, said Pam Goodfellow, a director at Prosper Insights & Analytics, a Worthington, Ohio-based research firm.

    “Once they have spent their money, it is hard to coax them back out into the stores,” she said.

  6. As usual excellent retail analysis. Brief anecdote, I drove by the South Shore Plaza in Braintree, a southern suburb of Boston on Sunday. They were packed at 1:00 pm, backed up onto the highway. WTF, the zombies in Massachusetts are continuing to shop to the bitter end.

    1. Sign Of The Times – Wal-Mart Launches Employee Food Drive

      Submitted by Michael Snyder of The Economic Collapse blog,

      You may find what is happening at one Wal-Mart in Ohio very hard to believe. At the Wal-mart on Atlantic Boulevard in Canton, Ohio employees are being asked to donate food items so that other employees that cannot afford to buy Thanksgiving dinner will be able to enjoy one too. You can see a photo of the donation bins that has been posted on Twitter right here. On the one hand, it is commendable that someone at that Wal-Mart is deeply concerned about the employees that are so poor that they cannot afford to buy the food that they need for Thanksgiving. On the other hand, this is a perfect example that shows how the quality of the jobs in this country has gone down the toilet.

      Wal-Mart is the largest employer in the United States and it had operating income of 26.5 billion dollars last year. Wal-Mart is not required to pay their employees a decent wage, and it is very unlikely that anyone will force them to. But they should. Because Wal-Mart does not pay decent wages to their employees, the rest of us end up with the bill. As you will see below, huge numbers of Wal-Mart employees end up on Medicaid and other government assistance programs. Meanwhile, those that control Wal-Mart continue to enjoy absolutely massive profits.

      The following is a short excerpt from a local news story about the donation bins that have been set out at the Wal-Mart in Canton, Ohio. As the story notes, this does not appear to be a nationwide program, and the donation bins are only available in an employee-only area…

      The storage containers are attractively displayed at the Walmart on Atlantic Boulevard in Canton. The bins are lined up in alternating colors of purple and orange. Some sit on tables covered with golden yellow tablecloths. Others peer out from under the tables.

      This isn’t a merchandise display. It’s a food drive – not for the community, but for needy workers.

      “Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.

      It just seems really crazy that the largest employer in the country pays so little that some of their employees cannot even afford to eat Thanksgiving dinner.

      Is this what the future of America is going to look like?

      According to official Wal-Mart numbers, more than half of their hourly workers make less than $25,000 a year.

      That breaks down to about $2,000 a month before taxes.

      Could you survive on that?

      Could you afford to support a family on that?

      It turns out that a lot of Wal-Mart employees simply cannot get by without financial help from the government, and the numbers are staggering. A recent Businessweek article discussed one study that found that 300 employees at just one Wal-Mart in Wisconsin actually receive a combined total of nearly a million dollars a year in public assistance…

      “A decent wage is their demand—a livable wage, of all things,” said Representative George Miller (D-Calif.). The problem with companies like Wal-Mart is their “unwillingness, not their inability, to pay that wage,” he said. “They hand off the difference to taxpayers.” Miller was referring to a congressional report (PDF) released in May that calculated how much Walmart workers rely on public assistance. The study found that the 300 employees at one Supercenter in Wisconsin required some $900,000 worth of public assistance a year.

      And according to Politifact, in many states Wal-Mart employees represent the largest single group of people enrolled in the Medicaid program…

      In Florida, Wal-Mart topped all companies operating in Florida with the largest number of employees and family members (12,300) eligible for Medicaid, according to a 2005 Tampa Bay Times story. Wal-Mart also ranked highly (No. 2) for dependents enrolled in Florida Healthy Kids or KidCare, trailing Miami-Dade County employees.

      In Missouri, where Wal-Mart is the largest employer behind state government, the state’s social services department determined Walmart employees outnumbered all others with employees and family members enrolled in MO HealthNet, the state’s Medicaid plan, in the first quarter of 2011. However, at almost 14 percent, it did not represent the highest percentage of workers enrolled or responsible for an enrollee (Dollar General, for instance, was much higher at 42 percent).

      And in Pennsylvania, a 2006 Philadelphia Inquirer investigation revealed the company had the highest percentage of employees enrolled in Medicaid. One in six of Walmart’s 48,000 Pennsylvania employees were enrolled in Medicaid, costing the state about $15 million a year (it’s likely higher because the Inquirer’s story did not cover employees’ dependents on Medicaid, or any other public assistance such as food stamps).

      This is a disgrace.

      Your taxes and my taxes are going to subsidize Wal-Mart.

      The government has to take more money from all the rest of us because Wal-Mart will not pay their workers a decent wage. Because Wal-Mart will not support them, we end up supporting them.

      Meanwhile, the six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.

      So why do people still work there?

      Well, because there is a huge shortage of jobs in this country. As I noted yesterday, the total number of working age Americans without a job has increased by 27 million since the year 2000.

      Right now we have a growing unemployment crisis in this country that is being seriously downplayed by the mainstream media.

      According to John Williams of, if long-term discouraged workers were still included in the official government employment figures like they were back in 1994, then the broadest measure of unemployment would now be approaching 25 percent. In fact, according to his charts unemployment in the U.S. is now worse than it was at any point during the last recession.

      And even the New York Times is admitting that long-term unemployment in America is up by 213 percent since 2007.

      At this point, there are millions upon millions of desperate Americans that will take just about any job that they can get.

      Meanwhile, the quality of the jobs in this country continues to go downhill very rapidly.

      For example, did you know that about 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968?

      And did you know that 65 percent of all American workers make less than $40,000 a year before taxes?

      For much more on this, please see my previous article entitled “15 Signs That The Quality Of Jobs In America Is Going Downhill Really Fast”.

      At the same time, the good paying high tech jobs that our politicians have been promising us continue to disappear. For instance, 19,507 biopharma jobs were eliminated between January 1, 2013 and October 31, 2013. That is a 68 percent increase over the pace of biopharma job losses during the same period last year.

      So are there any areas of the country that are actually doing well right now?

      Well, yes there is. In fact, the Washington D.C. region has added more “1 percent households” over the past decade than anyone else has…

      The winners in the new Washington are not just the former senators, party consiglieri and four-star generals who have always profited from their connections. Now they are also the former bureaucrats, accountants and staff officers for whom unimagined riches are suddenly possible. They are the entrepreneurs attracted to the capital by its aura of prosperity and its super-educated workforce. They are the lawyers, lobbyists and executives who work for companies that barely had a presence in Washington before the boom.

      During the past decade, the region added 21,000 households in the nation’s top 1 percent. No other metro area came close.

      I used to live in the D.C. area, and I can tell you that the folks out there are living the high life at your expense.

      In one recent article, I noted that the average federal employee living in the Washington D.C. area received total compensation worth more than $126,000 in one recent year.

      Of course you and I are paying the bill for this too. The U.S. national debt is on pace to more than double during the eight years of the Obama administration, and our politicians seem to have no trouble continuing to steal about 100 million dollars from our children and our grandchildren every single hour of every single day.

      Meanwhile, thousands of other communities all over the nation are slowly being transformed into rotting, festering hellholes. The following is an excerpt from a recent CNBC article that discussed what is happening to Trenton, New Jersey…

      When a city is badly broken, it can be very tough to fix.

      Just ask Darren Green, president of a coalition of community groups in Trenton, N.J., where deep budget cuts in 2011 forced the city to lay off a third of its police force.

      “We’re at a place now where it’s very dangerous to walk the streets,” he said, his thoughts periodically interrupted by the distant sound of passing sirens. “The school system is dysfunctional and not working. You have young people who are robbing elders. Young people who are destroying communities. With no leadership and the community in disarray, there’s a lot of bad here.”


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