Home Depot at Goldman Sachs Conference Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Supply chain has been a huge value driver for us

“our transformation in supply chain has been one of the great drivers of value in our business. As we moved from the bulk of our products going direct to store to the bulk of our products going through our rapid deployment centers”

Three cycles of the business

“we think of our business in three cycles, a sales cycle, a productivity cycle, and a capital allocation cycle. And these are virtuous cycles. And if you look at the productivity cycle, it really is like pushing on a flywheel. And once you get momentum, well the flywheel takes off and that’s what we are seeing in our SG&A expense”

We couldn’t figure out how to make money in China

“We had stores in China. We started with 12 back in 2006. We shut that business down and don’t have any plans of going back. We couldn’t figure out how to make any money in China to just bring it to a point.”

Every couple of years we say, maybe Brazil, then a couple more we say, glad not in Brazil

“We have looked at Brazil several years ago. Have no plans, I mean Brazil is one of those things every couple of years you say, ought to be in Brazil and then every couple of years you go, good not to be in Brazil. So, we have no plans there and really we see such dominant opportunities in North America that’s where we are focused.”

Kitchen remodeling still hasn’t recovered, but maybe coming back

“if you take as a good barometer kitchen remodels and kitchen installation business that was one of the businesses that suffered the most during the downturn, down almost 50% and that still hasn’t recovered. Some of the things that are indicators of the market starting to recover is our services businesses. Our installation business is actually growing at a faster rate than the underlying company”

The smile expansion strategy

“s you know our founders were brilliant in the way they opened our first four stores in Atlanta, then went up to coast like a smile and then came into the center of the country. So, our store locations are in excellent, excellent locations.”

Changing consumer preference in flooring

“hen you talk to people about their homes, where it used to be very common for a house to have wall-to-wall carpeting throughout the entire home. Now, it’s more common to have wall-to-wall carpeting for the bedrooms and hard surface for the rest of the house. We have adjusted our space to reflect that same changing pattern in customer preferences”