Home Depot Cleaning Up This Spring

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Home Depot ( HD ) is one of the most fully mature companies on the market, which is to say, they have been around long enough that they have already expanded rapidly in the areas conducive to rapid expansion, fallen into slow growth in areas conducive to slow growth and failed entirely in areas conducive to failure. Their cavernous stores are loved by professionals and do it yourselfers, as well do-it-for-me-ers, and while they do well when people are buying houses, they do just as well when many people are merely renovating. Home Depot shares the market with Lowe’s ( LOW ), of course, and the stores are so similar that they are starkly differentiated only by Home Depot’s deep commitment to a witheringly flat, stale shade of orange.

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Home Depot To Offer Same Day Delivery

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Home Depot Inc.’s next refurbishment project: building out the capability to offer same-day delivery.

The retailer plans to spend at least $300 million on supply chain, technology and online improvements, including building new fulfillment centers and overhauling its warehouse technology systems. It plans to open three new fulfillment centers in California, Atlanta and Ohio over the next two years.

The moves are aimed at boosting online sales, including a same-day delivery service aimed at customers and professional contractors who might be in the midst of a home improvement product and want lumber, tiles or screws in a matter of hours.

“It’s a big investment,” Chief Financial Officer Carol Tome said during the retailer’s investor conference on Wednesday.

Retail heavyweights Wal-Mart Stores Inc. WMT +0.22% and Amazon.com Inc.AMZN -0.09% have both been testing same-day delivery in certain markets, but neither has rolled out the option to customers nationwide. Wal-Mart, which offers same-day delivery service in five markets, said customers have until noon to place orders on about 10,000 top-selling items and can choose a four-hour window to receive delivery.

Home Depot wants to allow shoppers to place orders by 5 p.m. and choose a one-hour delivery window. Customers will be able to receive real-time delivery updates via their mobile phones and choose from 100,000 items, said Mark Holifield, Home Depot’s senior vice president of supply chain.

Home Depot has all but halted its construction of new brick and mortar stores in the U.S. and is turning its focus to building out its online business. One key factor will be setting up a delivery and supply chain system that will enable same-day delivery. The big-box retailer also plans to begin fulfilling online orders from within its stores, rather than a warehouse or distribution center, to enable it to deliver 90% of orders to customers within two days. Currently, it takes between two and seven days for customers to get most orders, the chain said.

Home Depot said it expects its sales to hit $79 billion this fiscal year, returning to its 2006 peak sales levels. While a large part of that sales growth has come from the burgeoning housing recovery, online sales are also helping.

“In 2008, upon reaching what we believed to be market saturation, we slowed new store openings,” Ms. Tome said. “Now we believe our sales growth will be driven by a continued recovery in the housing market, as well as interconnected retail.”

In 2012, online sales represented 2.4% of the company’s $74.8 billion in 2012 net sales. Home Depot’s web sales are expected to increase by 50% this year to $2.7 billion.

The company also said it is looking at expanding in-home assembly and installation programs from appliances to patio furniture, grills and other items.

Earlier Wednesday, Home Depot for the year ending in January 2015 projected growth of about 17% in per-share earnings, while analysts polled by Thomson Reuters expected an 18% increase. It also sees sales rising about 5%, matching the consensus view, and operating margins to widen by 0.7 percentage points.

Meanwhile, the company expects to buy back about $5 billion in stock in the new year, up from this year’s target of about $4.5 billion, and projected capital spending of about $1.5 billion, matching the goal for the current year.

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Home Depot Opens Big-Format Store

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Home Depot has opened a 211,000-sq.-ft. “superstore” in Anaheim Hills, Calif., which it describes as “almost twice the size of [a] regular Home Depot.” The unit, situated in an affluent area of Orange County, is an existing store that was remodeled. Among the changes are:

• Expanded bath fixture showroom, including a “shower gallery;”
• More kitchen cabinet options;
• Weber grill showroom;
• Year-round outdoor living showroom;
• Expanded appliance showroom with lifestyle vignettes;
• Expanded hard surface flooring and rug selection;
• Expanded decor showroom; and
• Expanded hardware department

(As reported by Home Channel News) Read the article

Home Depot builds on pros

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Here’s the compelling math behind The Home Depot’s effort to embrace the pro customer: Pros account for 4% of total Home Depot customers and 30% of total Home Depot sales.

Clearly, these are customers that the world’s largest home improvement retailer wants to impress. The Home Depot has known for years the importance of its pro customer, but something’s different at Home Depot these days, and the difference begins with three little words: “First for Pro.”

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Home Depot’s CEO, 11 Major Companies, And America’s Jobs Crisis

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Bernie Marcus, the co-founder of Home Depot (HD), is one of my favorite personalities in the business world. Anytime I’m aware that Marcus is speaking, I try and make myself available to hear what he has to say. I believe he offers good points of view, his opinions are fair, and he is entertaining as well. On Thursday, September 15, Marcus was a guest on CNBC and spoke about an array of topics, which included his foundation, jobs, politics, business, and the market, among others. But what I found most interesting was his view of the proposed jobs plan and the mindset of corporate America after the recession. Read the rest of the article

(As reported by Brian Nichols of SeekingAlpha.com)

Home Depot Catches up on Internet Sales

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As of this month, when shoppers find their local store on its website, they see new information including whether the store provides key cutting or tool rental. They also see the store manager’s name, as well as the in-store layout. Item searches yield how many items are in stock at the nearest stores. “We know we were behind folks like Amazon.com,” said Hal Lawton, Home Depot’s HD +0.31% president of online. “We’ve put a stake in the ground. We want to catch up and then get ahead. We certainly are not going to lose share.”

Like other retailers, the world’s largest home-improvement retailer says it’s expanding in the online channel aggressively and targeting it as a major growth opportunity. Home Depot has made its biggest e-commerce investment over the past two years since it started Internet sales in 2001. An important part of the company’s $370 million in planned annual IT spending over the next three to four years will be online, including mobile, the company said, declining to elaborate.

(As reported in MarketWatch.com)

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Home Depot’s Second Quarter – The Tale of the Tape

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The Home Depot’s Craig Menear, executive VP merchandising, said the company’s strong 4.3% comp-store sales performance in the second quarter was boosted by outdoor projects, storm-related repairs and steady strength in core departments. Performance was aided by Home Depot’s improved supply chain and merchandising tools, he said.

“At the end of the first quarter, we chose to carry more inventory to keep our stores fully stocked with seasonal product,” Menear told analysts during the company’s earnings-report conference call. “This was the right decision. Improvements in the weather combined with our merchandising tools and enhanced transportation network allowed us to end the first half with inventory turns flat to last year.”

(As reported in Home Channel News)

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Eight Major Retailers Taking a Hit

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It’s no secret that U.S. retail sales collapsed in 2008 and 2009 because of the recession. But several of the largest retailers consistently performed poorly between 2005 and 2010 for reasons that go beyond the recession. 24/7 Wall St. looked at which retailers lost most in total sales during that period and found that their troubles have a few common elements.… Read the article

(As reported by MSNBC.com)

Home Depot and Online Growth

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Over the last few years, Home Depot has expanded its retail stores aggressively, adding more than 200 outlets annually. However, the firm has recently embarked on a $1.1 billion program aimed at improving its Web presence while planning to dramatically reduce the number of new store openings to around 10 in 2011. Home Depot is the world’s largest retailer in the home improvement products space with over to 2,240 stores in the U.S., Canada, Mexico and China, and it hopes that by beefing up its online sales, it can distance itself from competitors like Lowe’s and Sears as well as fend off competition from pure play online retailers like Amazon.

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Home Improvement Store Sales are Set to Grow

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Sales at home-improvement stores likely have bottomed out and are expected to turn around, providing some optimism for improved performance making the stock for the major chains more attractive. Revenue for Lowe’s Cos. and Home Depot Inc. has been weak as the early spring weeks have been cool and wet in some parts of the country, including the Northeast.

As reported in Bloomberg Business