The world’s biggest home improvement retailer, Home Depot, revealed that consolidated profit plunged by nearly 50 per cent last year as it suffered amid the US housing slump.

Consolidated net earnings plummeted from US$4.4bn to US$2.3bn in the year to February 1.

The figure reflected a US$1.1bn charge, including business rationalisation costs of US$387 million and other one-off expenses.

In the fourth quarter, the US giant recorded a consolidated net loss of US$54m, compared with profits of US$671m for the comparable period the previous year.

Sales in the quarter slid 12 per cent, excluding an additional week in 2007. Like-for-like sales fell 11.5 per cent.

Annual sales fell 6.5 per cent to US$71.3bn, excluding the extra week in 2007 and like-for-likes dropped 8.7 per cent.

Chairman and chief executive Frank Blake said: "Despite the difficult economic conditions, the company made important progress in key areas.

"We improved customer service ratings, as measured by customer surveys and third parties. We maintained sound inventory control. We launched an effective new lower price campaign. And we made strategic business decisions, exiting non-core businesses and significantly reducing square footage growth, which will better position us for the future.

"We expect the home improvement market in 2009 will remain just as challenging as 2008, but we will continue to invest in our associates and stores to set a strong foundation for the long term health of our company.”.

At the end of the fourth quarter, Home Depot operated 2,274 stores.

Last week, rival chain Lowe’s revealed it also suffered in the fourth quarter, with a 60.3 per cent slump in profits to US$162m in the period, ending January 30. Like-for-like sales dropped 9.9 per cent and total sales fell 3.8 per cent to US$9.98bn.

In the year to the same date, earnings plummeted 21.9 per cent to US$2.2bn. Comparable store sales slid 7.2 per cent and total sales were down 0.1 per cent to US$48.2bn.

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