Solid foundation

ATLANTA — Home Depot chief executive Bob Nardelli admits the home improvement retailer’s image has had its highs and lows, and, this might be a jolt, he says both are probably unjustified.

“The company probably was never as good as was perceived and it sure in the hell is not as bad as it is perceived today,” Nardelli told The Associated Press in an interview Wednesday.

But Nardelli said his strategy is working and he’s not about to change course.

“Look at the data,” Nardelli said. “We are gaining share. Our earnings were two times our nearest competitor in the first quarter… Just go down the list, and you’ll say, ‘Gee, I think they’re doing pretty good.’ ”

Is Atlanta-based Home Depot beating rival Lowe’s?

“You draw that opinion,” Nardelli responded.

In the numbers game, Home Depot, which operates the nation’s largest home improvement store chain, is winning. It reported a 21 percent jump in profit to $1.1 billion in the period ending May 2, compared to an 8 percent increase to $455 million for North-Carolina-based Lowe’s Companies Inc.

But in the image game as reflected in the stock market, Home Depot has been lagging. Since Nardelli joined the company as chairman and CEO in 2000, Home Depot’s stock price has fallen more than 12 percent. Lowe’s stock price has risen more than 33 percent during the same period.

On Wednesday, Banc of America Securities’ Aram Rubinson lowered his rating for Home Depot from buy to neutral, citing the effect a slowdown in sales in the housing market could have on the company’s revenue. Its stock fell 9 cents to close at $35.67 Wednesday on the New York Stock Exchange.

Nardelli said he is unfazed.

“Look, the dot-com companies had a lot of image. They had a lot of ‘p’ and no ‘e,’ ” he said, referring to stock price and earnings. “And I would have thought that Wall Street would have learned from being burned with that. So, what I’m looking for is bricks and clicks.”

Nardelli said the 1,740-store chain’s program to make its stores cleaner and brighter and increase the number of its locations will continue. Acknowledging persistent concerns about customer service, he said Home Depot has work to do in that area but he believes it is improving.

“I’m not going to come off strategy to try and influence a quarterly stock price,” Nardelli said. “I believe we’re going to stay the course and over time the market is going to recognize that.”

He added, “At some point, I think there is going to be that awakening.”

During the interview, Nardelli also was asked about his successes, challenges, politics and his future.

He said he is proud of the financial success of the company and its effort to modernize its stores. He said his greatest challenge is being able to convey that more effectively to the public.

“I’m not looking for a pat on the back,” Nardelli said. “Quite honestly, I’m looking for fair evaluation of this company.”

As for his future, Nardelli, who took over at Home Depot after not getting the top job at General Electric, said that, like his strategy, he is staying the course.

“This is what you train for and to have this laboratory, if you will, and this company, where else would you go?” Nardelli said. “We own orange. We own home improvement.”