ATLANTA – The Home Depot®, the world’s largest home improvement
retailer, today updated its plans for square footage growth. The strategic plan outlined Thursday centers on the Company’s capital efficiency model to improve free cash flow, provide stronger returns for the Company and invest in its existing stores to continue improving the customer experience.

For the current fiscal year, the Company reiterated its intention to open 55 new stores, including 36 new stores in the U.S. Starting in the 2009 fiscal year, The Home Depot intends to grow square footage by approximately 1.5 percent per year.

The Company has determined that it will no longer pursue the opening of approximately 50 U.S. stores that have been in its new store pipeline, in some cases for more than 10 years.

Accordingly, the Company will record a charge of approximately $400 million related to capitalized development costs and ongoing obligations associated with those future store locations.

Aggregate new store capital spending will be reduced by approximately $1 billion over the next three years, thereby providing stronger returns and enhancing the Company’s capital efficiency model.

“This is a continuation of our disciplined approach to capital allocation that we outlined last year. We will invest in our core retail business, in this case our existing stores, which drive our most profitable sales. Our capital efficiency model will also provide improved returns for our shareholders through dividends and share repurchases,” said Frank Blake, chairman and CEO.

Continued investments in the Company’s existing retail stores will include maintenance, merchandising resets and other initiatives to improve all elements of the customer’s shopping experience.

The Company reiterated that its total capital spending for the current fiscal year is projected to be approximately $2.3 billion, down from $3.6 billion last year.

The Company also announced that, following a thorough evaluation of its store portfolio, the Company will close 15 underperforming U.S. stores that do not meet the Company’s targeted returns.

The closing stores represent less than 1% of the Company’s existing store portfolio.

These closings will impact approximately 1,300 associates. The store managers and assistant store managers at these locations will be offered other store management positions within the organization. The Company will work to place the rest of the associates in other
comparable store positions where available.

“Closing a store is always a difficult decision because it affects both our people and our communities,” said Blake. “But, as with our decision to slow future store growth, this is the right decision and will bring long-term benefits to our associates and to our shareholders. We put our real estate projects through a tight capital efficiency model. This model prioritizes locations that make the most efficient use of capital, reduce cannibalization and drive higher returns. By building fewer stores, in the best locations, and making sure our existing stores are profitable, our company will be in a much stronger competitive position.”

As a result of the store closings and impairment, the Company will record a charge of approximately $186 million, including inventory markdowns of $11 million and severance of $8 million.

The Home Depot will close 15 underperforming U.S. stores that do not meet the Company’s targeted returns.

The store locations are as follows:

• #2015 East Fort Wayne, Indiana
• #2032 Marion, Indiana
• #2310 Frankfort, Kentucky
• #379 Opelousas, Louisiana
• #2819 Cottage Grove, Minnesota
• #6901 East Brunswick, New Jersey
• #6904 Saddle Brook, New Jersey
• #6171 Rome, New York
• #3702 Bismarck, North Dakota
• #3874 Findlay, Ohio
• #3865 Lima, Ohio
• #4552 Brattleboro, Vermont
• #4932 Beaver Dam, Wisconsin
• #4933 Fond du Lac, Wisconsin
• #4913 NW Milwaukee, Wisconsin