UPDATE 4-Home Depot ups forecast; says worst of housing over
* Forecasts 2009 EPS to be flat to down 7 pct
* Sees better margins through operational efficiencies
* Says the worst of U.S. housing correction over
* Maintains sales expectations for year
* Shares give up most gains after rising 3.2 pct (Recasts; adds details from conference, analyst comment, byline)
NEW YORK, June 10 (Reuters) - Home Depot Inc (HD.N) raised its 2009 profit forecast as the biggest home-improvement chain said Wednesday it sees better margins this year through improved efficiencies.
After seeing its sales hit by the housing market slump and resulting recession, Home Depot said economic indicators signal the worst of the U.S. housing correction has passed. [ID:nWNAB8413]
Home Depot, which has been upgrading service and products in its stores to win back market share from rival Lowe's Cos Inc (LOW.N), said earnings could be flat this year, rather than falling as it previously forecast.
Shares of Home Deport were up 9 cents to $24.44 in afternoon trading, paring gains of as much as 77 cents, or 3.2 percent, earlier on Wednesday.
The company's year-to-date performance in 2009 was ahead of plan, Home Depot Chief Financial Officer Carol Tome told a meeting with analysts which was also webcast. [ID:nWNAB8489]
The company said it plans to step up efforts to improve its distribution network by introducing more "rapid deployment centers" and more marketing campaigns targeting Hispanic communities.
Home Depot said its supply chain was not the best and had more room for improvement.
"We are playing a bit of catch-up," a company executive told the analyst meeting.
From appointing more bilingual staff to making items easier to locate in aisles, Home Depot plans a renewed focus on customer service at its stores.
Home Depot said its strategic initiatives and a revival of the home improvement market will allow it to achieve an operating margin of about 10 percent and a return on invested capital of about 15 percent. Continued...
