Profits at Home Depot, America’s largest home improvement retailer, fell less than expected in the third quarter as the company focused on cutting back its expenses.

The company, which has 2,242 stores, posted a 8.9 per cent fall in profits to $689 million, or $0.41 per share, for the quarter ending 1 November 2009, as the housing and renovation markets remained weak. But this was ahead of the 36 cents expected by analysts polled by Bloomberg.

Frank Blake, the company’s chairman and chief executive, said that although the trading environment remained difficult, he detected some positive signs of stabilisation in the housing market.

“We grew market share in the quarter, continued to transform our business and improved customer service. I want to thank our associates for their hard work and dedication," he said.

Sales fell eight per cent to $16.4 billion, with the average value of each shopper’s transaction declining 7.1 per cent to $51.89 , as customers cut back on big ticket items. The number of transactions fell from 315 to 314 million, but the company reduced selling, general and administrative expenses by 8.4 per cent to $3.87 billion.

The company raised its full year earnings outlook to a fall of 13 per cent to $1.55 a share for the year, up from a previous projection of a 15 to 20 per cent decline. It maintained its previous projection for sales of a nine per cent decline for the year.

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