HomeBase Loss Bigger Than Had Been Expected

HomeBase Inc., battling heavy competition in the home-improvement arena, posted a hefty third-quarter loss Tuesday that almost doubled what analysts were expecting.

The home-improvement retailer said it lost $10.3 million, or 27 cents a share, including $4.8 million in expenses from launching five new House2Home home decorating superstores. A year ago, the company earned $3.9 million, or 10 cents a share.

Analysts were expecting the company to post a loss of about 14 cents a share, according to a First Call/Thomson survey.

Sales fell 12% to $334.4 million. Sales at stores open at least a year, a key indicator of performance, slumped 12.5%. The company cited sagging lumber prices as a major factor in the lower same-store sales.

HomeBase said sales at the five new House2Home test stores were stronger than expected. The company now has five House2Home home-furnishings stores, including one in Foothill Ranch.

During their first eight weeks, the stores logged $14.6 million in sales, or about $2.9 million per store, a pace well ahead of what would be needed to produce anticipated annual sales of $14 million to $16 million per store, HomeBase said.

The announcement came after the close of regular trading in U.S. markets. The stock closed at $1.88, up 13 cents a share, on the New York Stock Exchange.