Reading between the lines: Home Depot hints at more closings

Many were surprised when they heard that Home Depot was closing all 34 of its Expo Home Design Centers, but if you are a regular reader of its financial reports, you certainly would have seen signs of major financial stress. Home Depot (NYSE: HD) first discussed a "store rationalization plan" in its first quarter of 2008 report. At that point, it closed 15 stores and removed about 50 stores from the future growth pipeline.

In the third quarter report (December 2008), Home Depot said, "We recognized $564 million in total pretax charges for the first nine months of fiscal 2008 related to the store rationalization plan, including $3 million in the third quarter of fiscal 2008." Clearly, the store rationalization plan was not complete and more cuts were to come.