Home Depot to raise spending amid slim sales

Home Depot Inc. said Wednesday that it would pump $2.2 billion into improving its business this year even as it expected lower earnings and slim sales growth, partly because of a continued slump in the housing sector.

The operator of home-improvement centers said that for fiscal 2007 it expected sales growth in the range of flat to an increase of 2%, a decline in sales at stores open at least a year in the middle-single-digit percentages and an earnings-per-share decline of 4% to 9%.

Including the effect of a 53rd week in its fiscal year, consolidated sales are expected to increase by 1% to 2%, and earnings per share are expected to decline by 3% to 8%, Home Depot said.

Chief Executive Frank Blake said the Atlanta-based company did not expect residential construction and the housing market to improve until late 2007 or early 2008.

Shares of Home Depot fell 23 cents Wednesday to $39.59.