By Mark Clothier Nov. 18 (Bloomberg) -- Home Depot Inc., the world's largest home-improvement retailer, posted third-quarter profit that fell less than analysts estimated and repeated its earnings forecast for the year. Sales for 2008 may decline 8 percent, more than the company previously said. Net income decreased 31 percent to $756 million, or 45 cents a share, from $1.09 billion, or 60 cents, a year earlier, Atlanta-based Home Depot said today. Sales for the three months that ended Nov. 2 retreated 6.2 percent to $17.8 billion, also beating estimates. U.S. consumer spending has slowed as housing values decline and the jobless rate climbs, causing consumers to cut back on living-room renovations and cabinet purchases. Home Depot has responded by slashing corporate expenses and closing stores, helping maintain profitability. ``This is proof that this industry doesn't have to be on sale to sell product,'' David Schick, an analyst with Stifel Nicolaus & Co., said in a telephone interview. ``You don't paint the room necessarily because paint was on sale. You paint the room because it was time to paint the room.'' He recommends investors buy Home Depot shares. Sales for the year that ends Feb. 1 may decline more than the 5 percent Home Depot had forecast, the company said. The retailer reaffirmed its projection that earnings per share for will drop 24 percent excluding some costs. ``The housing and home improvement markets remain challenging,'' Chief Executive Officer Frank Blake said in a statement. ``Across our entire business, we are making the adjustments necessary to respond to a tough market environment.'' Lowe's Decline Lowe's Cos., Home Depot's largest rival, said yesterday that third-quarter profit fell 24 percent and trimmed its full- year earnings forecast. Third-quarter sales in stores open at least a year dropped 8.3 percent, Home Depot said. Schick estimated a 9 percent drop, while Colin McGranahan, an analyst with Sanford C. Bernstein & Co., predicted a 9.5 percent decline. Gross margin, the share of sales after subtracting the cost of goods sold, rose to 33.7 percent from 33.4 percent. Home Depot rose 70 cents, or 3.5 percent, to $20.70 at 8:13 a.m. in trading before the New York Stock Exchange opened. The shares have dropped 26 percent this year, putting it on course for a fourth straight annual decline. Lowe's has retreated 16 percent. Twenty-four analysts surveyed by Bloomberg estimated average third-quarter profit of 38 cents a share. Nineteen projected sales of $17.6 billion. The unemployment rate jumped to 6.5 percent in October, the highest level since 1994. Employers have cut more than a half million workers from payrolls in the past two months. Home values slid 17 percent in 20 U.S. metropolitan areas in August, according to the S&P/Case-Shiller price index. Home Depot runs 2,268 stores, 1,970 of which are in the U.S. Lowe's has about 1,600 stores. To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net

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