Dow component Home Depot announced Wednesday that it expects only small growth in sales this year, with earnings per share falling. But investors shouldn’t be too concerned about this year’s numbers, David Schick, retail analyst at Stifel Nicolaus, told “Squawk Box.”
Home Depot is focused on long-term growth rather than short-term returns, according to Schick. The world’s largest home-improvement chain store is set to invest $2.2 billion in 2007 into improving its business.
“The important thing is to keep in mind what they are talking about and working on in 2008 and beyond,” Schick said.
Overall sales in the Atlanta-based company look set to be flat to up 2% in 2007, and earnings per share are expected to fall 4% to 9%, according to the company’s own predictions. A weak U.S. real estate market has impacted sales expectations.
“I don’t think people want to see the amount of work that has to be done,” said Schick, but added that he doesn’t think the market wants to see short-term expectations that are easily beatable.