May 1 (Bloomberg) -- Home Depot Inc., the world's biggest home-improvement retailer, will eliminate 1,300 jobs, close 15 stores and scrap plans for 50 more as the U.S. housing slump cripples sales.

Home Depot rose the most in a month in New York trading after saying today it will slow its expansion of floor space to 1.5 percent next year from 2.5 percent this year. The Atlanta- based chain maintained its forecast for a decline in earnings per share of 19 percent to 24 percent this year.

Since taking over in January 2007, Chief Executive Officer Frank Blake has sold the company's commercial-builder unit and closed landscape and floor outlets to focus on retail stores, where customer service trails that of Lowe's Cos. Home Depot lost 33 percent of its market value last year.

``Given the slower economic environment, it's probably an appropriate action to cut their expansion and reduce their expenses,'' Walter Todd, a principal at Greenwood Capital Inc. in Greenwood, South Carolina, said in a phone interview today.

The moves will cost Home Depot $586 million, mostly in the first quarter, the company said.

Home Depot rose $1.07, or 3.7 percent, to $29.87 at 4 pm. in New York Stock Exchange composite trading.

The job cuts, which represent less than 1 percent of the company's workforce, are Home Depot's third this year. The retailer reduced staff at its Atlanta headquarters by 500 people and said last month it may cut as many as 1,000 jobs as it reduces human-resources departments in stores by half to shift more workers to the sales floor.

Full Timers

Of the 1,300 store jobs being cut, 50 are managers and assistant managers. The retailer employs about 331,000 people, two-thirds of them full-time.

Home Depot had 2,193 stores, not including design and specialty centers, at the end of 2007. Of those, all but 243 were in the U.S. The company boosted its store square footage last year by 4.9 percent.

The retailer said in February that fourth-quarter profit fell 27 percent and forecast earnings below analysts' estimates after the deepest housing slump in a quarter century showed no sign of receding.

Sales, which dropped for the first time last year, will decline as much as 5 percent during a ``challenging'' 2008, Blake said in February.

Home Equity

``The home-equity rug has been pulled out from consumers,'' Paul Larson, equity strategist at Morningstar Inc., said yesterday in a Bloomberg Television interview. ``They can no longer use home equity to finance purchases.'' Larson says Home Depot and Lowe's Cos Inc. shares are ``undervalued.''

Lowe's, the second-largest U.S. home-improvement retailer, also is scaling back expansion. It is opening 20 fewer stores than planned, mostly in California and Florida, among the areas hardest hit by the housing slump. The chain operates about 1,530 stores, and plans to open about 120 this year.

Residential construction in the U.S. fell at an annual rate of 27 percent in the first quarter, the most since 1981, according to figures from the Commerce Department.

Blake's predecessor, Robert Nardelli, was replaced in January 2007 after overseeing two straight years of share declines while taking in one of the highest executive-pay packages in the U.S. He was criticized by some shareholders for his compensation and for taking the company's focus off its retail stores.

Nardelli is now CEO of Chrysler LLC, a position he took in August after the automaker was taken private by buyout firm Cerberus Capital Management LP.

The following is a list of the locations where Home Depot intends to close stores:

East Fort Wayne, Indiana
Marion, Indiana
Frankfort, Kentucky
Opelousas, Louisiana
Cottage Grove, Minnesota
East Brunswick, New Jersey
Saddle Brook, New Jersey
Rome, New York
Bismarck, North Dakota
Findlay, Ohio
Lima, Ohio
Brattleboro, Vermont
Beaver Dam, Wisconsin
Fond du Lac, Wisconsin
NW Milwaukee, Wisconsin

To contact the reporter on this story: Duane D. Stanford in Atlanta at mnol@bloomberg.net.

Last Updated: May 1, 2008 16:14 EDT