The Home Depot’s Investments Have Paid Off

Home Depot Investments At its investor day last week, The Home Depot commented on their successful investment strategies over the past decade, and the results in sales growth that they attribute to those efforts. The retailer has invested 5% every year to its ecommerce platform and improving current stores versus opening new ones. This has resulted in more than 6% sales growth for comp stores for 5 years. This past quarter they reported nearly 7% in increases. Accelerated Analytics customers are helping with driving those sales, posting an average of 9% growth in year over year comp stores.

In the investor call, The Home Depot announced it plans to double the investment spending in the next 3 years to $11.1 billion. Specific investments mentioned were faster check-out for customers, flexible scheduling and better wages for employees in the stores, and increasing inventory turn to be more efficient and keep stores fresh. The retailer is hoping for sales to reach $119.8 billion by 2021. CFO Carol Tome expects the expansion due to rising home value appreciation, and was not concerned by any possible tax plan changes that would change mortgage deductions. CEO Craig Menear reiterated that sentiment, saying fears are “overblown” and that tax reform will have an “immediate and significant benefit” for their tax rate.


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