Home Depot won't abandon professional installation

ATLANTA -- The Home Depot Inc. doesn't expect future growth for its professional home installation service, but the company's chief executive vowed Thursday that the struggling business would not be abandoned either.

Customers have complained about the quality of work done by the people Home Depot hires to do home installation of kitchen appliances, flooring and other items.

CEO Frank Blake said during the Atlanta-based company's annual investor and analyst conference that Home Depot wants to use the unit to drive customers into its core retail stores.

"It means we'll be less interested in growing the business than ensuring that we get it right," Blake said.

Blake said that while Home Depot doesn't expect the unit to be an independent driver of growth for the company, that "doesn't mean we will exit the business."

He added, "Without a doubt, our customers have a need for a 'do-it-for-me' solution, but if we can't effectively execute, we'll be more interested in serving the pro who does it for our customer than in providing the service directly ourselves."

Last December, Home Depot announced that it was cutting 950 jobs in the unit and shifting work from three centers to its stores in a bid to improve customer service.

Home Depot said it would have eight call centers left in North America after closing the three.

The call centers give price quotes and complete orders for customers who go into stores and order flooring and other types of home installations.

"We know we have additional work to do to improve customer service," Blake said.

Home Depot has been hit hard by the slumping housing market. Last month, it reported a 66 percent drop in first-quarter profit.

"We see more negatives than positives for the remainder of this year," Blake said at the investor and analyst conference.

He reiterated Home Depot's previous guidance, which projects a fiscal 2008 sales decline of 4 percent to 5 percent and an earnings per share decline for the year of 19 percent to 24 percent.

Blake said the long-term fundamentals of the industry remain strong. He said housing stock continues to get older, driving the need for housing repairs and thus being a potential driver of growth for Home Depot in the future.