Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Home Depot (HD) -- Ignore unavailable to you. Want to Upgrade?

To: JEFF who wrote (127)	3/31/1998 3:46:00 PM
From: John Carson	Read Replies (2) \| Respond to of 1169

Tuesday March 31, 3:06 pm Eastern Time Home Depot stock up, margins seen expanding NEW YORK, March 31 (Reuters) - Shares of Home Depot Inc rose on Tuesday after Merrill Lynch said the home-improvement retailer's gross margins were due to expand dramatically as it started to directly import the goods it sold. The stock rose 1-3/16 to 67-1/8 after Merrill analyst Peter Caruso said Home Depot's plans to import goods itself, without relying on third-party importers, could add 10 to 15 percent to the company's present 28 percent gross margin level. ''All of Wall Street knows Home Depot is developing a self-import program,'' Caruso said. ''But what Wall Street does not realize yet is the impact on gross margins.'' At a field trip to the company's headquarters last Friday, Caruso said Home Depot described how gross margins could rise to 38 to 43 percent if it switched to directly importing goods. Home Depot now directly imports three percent of its products. Within five years, Home Depot hoped to directly import 10 percent of its products. Caruso said this could add nearly nearly $1 billion in incremental gross profits. ''The company is setting itself up for quarter after quarter after quarter of margin expansion,'' Caruso said. He raised his growth rate estimate on the company to 25 percent from 23 percent.