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ATLANTA—Despite declines in comp-store sales and earnings, The Home Depot is continuing with programs to reinforce customer service, and creating showcases for bath items, executives said at its first quarter conference call.

Poor April weather through much of the country and declining housing starts, particularly in key markets such as Florida, led to a 4.3% drop in total retail sales, and a 7.6% drop in comparable store sales.

“We continue to work through our issues on performance and execution. We remain committed to reinvesting in our retail business, despite the challenging quarter,” said Frank Blake, chairman & CEO.

The company is planning to roll out showrooms for bathroom cabinets, fixtures and other items, though no timetable was given. Bath has been one of the weaker segments thus far this year.

“We are continuing to lose share in bath,” said Craig Menear, executive vice president, merchandising. “[The showrooms] will make it easier for our customers to shop. Other underperforming items will be address throughout the year.”

During the quarter, the company opened 26 new stores, and closed two stores. One unit was relocated.

Sales for the first quarter totaled $21.6 billion, a 0.6% increase from the first quarter of fiscal 2006. Total retail sales declined 4.3% to $18.5 billion, and comparable store sales declined 7.6%. Total sales in the HD Supply segment (still being reviewed for its strategic alternatives) grew by 46% to $3.1 billion, reflecting sales from acquired businesses. The chain reported net earnings of $1.0 billion for the quarter, compared with $1.5 billion in the same period in fiscal 2006.

At the end of the first quarter, Home Depot operated a total of 2,170 retail stores, which included 1,895 The Home Depot stores in the United States (including Puerto Rico and U.S. Virgin Islands), 155 stores in Canada, 63 stores in Mexico, and 12 stores in China. The Company also operates 34 EXPO Design Center locations, and 11 The Home Depot Landscape Supply stores.

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