June 10 (Bloomberg) -- Home Depot Inc., the world’s largest home-improvement chain, said fiscal 2009 profit may decline less than it had projected, or not at all, after it reduced expenses to counter falling sales. The shares rose.

Profit from continuing operations may be unchanged or fall 7 percent, compared with the 7 percent drop the company forecast May 19, Atlanta-based Home Depot said today in a statement. The chain said it still anticipates a 9 percent decline in sales.

The retailer, led by Chief Executive Officer Frank Blake, has reduced expenses, shuttered its Expo design chain and frozen 2009 base salaries for officers as declining housing starts depress demand for home improvements.

“Our economic engine is no longer driven by new square footage,” Blake told analysts on a conference call today. “Instead it is driven by discipline, capital allocation and productivity and efficiencies within our existing stores.”

Home Depot rose 4 cents to $24.39 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have rebounded by 6 percent this year, after sinking for four straight years.

Efforts to improve customer service, ranging from better cashier training to hiring more Spanish-speaking employees, will help Home Depot regain lost sales, Blake said.

Over the past three years, average sales per square foot have tumbled to about $275 from $350, with total revenue falling about $15 billion, Blake said.

“The single most important and profitable source of growth for us is to recapture over the next several years the $15 billion lost over the last three,” said Blake, CEO since January 2007.

Analysts project profit of $1.41 a share this year, the average of 27 estimates compiled by Bloomberg.

(Home Depot started a presentation at 8:30 a.m. New York time. For the Web cast, click http://ir.homedepot.com.)

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net

Last Updated: June 10, 2009 16:17 EDT