US DIY giant Home Depot has raised its forecast for its current financial year after reporting a smaller than expected 7.2% profit fall in the second quarter compared with the same period last year.

In the three months to August 2, the company said it had net earnings of $1.12 billion, compared with $1.2 billion last year.

Battered by recession and the near-collapse of the US housing market, the home improvement giant's sales were down 9.1% from a year earlier at $19.1 billion.

In raising its 2009 outlook, the company said it expected earnings per share growth of between zero and 7%. It previously forecast a decline of between zero and 7%.

'Concerns about the housing market, rising unemployment and softness in the overall economy continue to pressure consumers,' said Home Depot CEO Frank Blake.

Home Depot operates a total of 2,240 retail stores, including 1,974 in the US, and employs more than 300,000 people. It runs a smaller international operation, with 178 stores in Canada, 77 stores in Mexico and 11 stores in China.