Hardware Chains Target B.C. -- Home Depot, Eagle Plan Vancouver Sites

ATLANTA - Home Depot Inc., which posted record quarterly earnings in line with analysts' expectations, said yesterday it will launch its first venture into foreign terrain with the opening of five stores in fast-growing Vancouver, B.C.

Seattle-based Eagle Hardware & Garden Inc., already squaring off against Home Depot on its home turf, also is looking at Vancouver sites.

Bernard Marcus, Home Depot's chairman and chief executive officer, said the Atlanta-based company expects the first Canadian store to open in late 1994, with the rest to open in 1995.

"Going into Vancouver is a natural progression of our recent entry into Seattle and the Pacific Northwest," Marcus said.

Home Depot recently opened a store in Tacoma and plans others in the Seattle area.

Entering Vancouver is not likely to be easy for Home Depot or Eagle. Aikenheads, a Toronto-based chain of warehouse-style home improvement stores, reportedly has staked out six Vancouver sites.

Eagle yesterday announced a public stock offering that could raise as much as $62.6 million if all the shares are sold. It will use that money to fund its expansion drive and to pay off debt.

The prospect of invasion has some Vancouver home-improvement merchants buzzing.

"If we get a situation where all these new people come to town at the same time, it's going to be a bloodbath," said Tim Delesalle, the managing director of Lumberland, Vancouver's home-improvement market leader.

Atlanta analyst Dan Wewer predicted success for Home Depot in its new frontier.

"I think it'll be a terrific market for them," he said. "There aren't any warehouse home center stores in that part of Canada yet."

Wall Street reacted favorably to Home Depot's quarterly results yesterday. Its stock rose $1.75 a share, to $44.25, in New York Stock Exchange trading.

In the fiscal first quarter ended May 2, Home Depot had record earnings for the 29th consecutive quarter, despite poor winter weather. First-quarter net earnings were $106.8 million, or 24 cents a share. That's up 34 percent from year-earlier net earnings of $79.5 million, or 18 cents a share.

Sales increased 33 percent in the quarter to $2.18 billion from $1.64 billion in the first quarter of 1992.

Though hurt by poor weather, sales at stores open at least one year still increased 7 percent.

Without counting strong sales in South Florida because of the Hurricane Andrew relief effort, the chain's same-store sales would have risen 5 percent.

Home Depot opened 10 new stores and relocated two stores in the first quarter, bringing its total number of stores to 224 in 28 states.