Home Depot Inc 
HOME DEPOT, INC. in the New Millennium
Tom Thomson, Suzanne Ma, Todd Humphrey, Owen Clements
June 28, 2006
Agenda
Background/History
Current situation
Accounting and Finances
Growth Initiatives
Financial Analysis
Forecast
HOME DEPOT Inc.
Founded In 1978 in Atlanta, Georgia
Largest Retailer of home improvement products
Stores were warehouses and sold large volumes of goods at low prices
Offered ‘how-to-clinics’ and knowledgeable customer service representatives
Between the Fall of 1981 & End of 1999, stock price had risen at a compound annual rate of
29%
Uninterrupted growth in US economy since 1992
Competitors
Lowe’s was second largest home improvement retailer Highly fragmented industry
Menards and Homebase – smaller but concentrated in certain geographic areas
Hechinger was main competitor initially but in an attempt to copy Home Depot’s warehouse style retail stores, went out of business
Management Style
Constantly evolving
Evaluate new ideas on smaller scale before taking to entire store network
Stores were located in all US states and
Canadian provinces 2/3rd of stores opened in existing markets
Current Situation
October 12th, 2000 the company announced lower then expected earnings for the 3rd and 4th quarter Largest one day drop (28%) to $35, a $33 billion loss in market capitalization
Drop thought to be due to slowing economy, overvaluation of stock price or problems with the company’s future strategic direction
Economy had experienced uninterrupted growth since 1992
Trivia Time with Todd!
What proportion of the world’s countries had a GDP in 2004 less than $33 billion according to the world bank?
2/3
1/3
1/2
5/8
11/16
Accounting Policies
Point of Sale revenue recognition
Cost as sold
Perpetual inventory system
Nothing interesting or exciting
“Everything is Kosher” - Tom
Growth Initiatives Classroom Opinions
Buy it Yourself customers
Professional customers
Store
Tom Thomson, Suzanne Ma, Todd Humphrey, Owen Clements
June 28, 2006
Agenda
Background/History
Current situation
Accounting and Finances
Growth Initiatives
Financial Analysis
Forecast
HOME DEPOT Inc.
Founded In 1978 in Atlanta, Georgia
Largest Retailer of home improvement products
Stores were warehouses and sold large volumes of goods at low prices
Offered ‘how-to-clinics’ and knowledgeable customer service representatives
Between the Fall of 1981 & End of 1999, stock price had risen at a compound annual rate of
29%
Uninterrupted growth in US economy since 1992
Competitors
Lowe’s was second largest home improvement retailer Highly fragmented industry
Menards and Homebase – smaller but concentrated in certain geographic areas
Hechinger was main competitor initially but in an attempt to copy Home Depot’s warehouse style retail stores, went out of business
Management Style
Constantly evolving
Evaluate new ideas on smaller scale before taking to entire store network
Stores were located in all US states and
Canadian provinces 2/3rd of stores opened in existing markets
Current Situation
October 12th, 2000 the company announced lower then expected earnings for the 3rd and 4th quarter Largest one day drop (28%) to $35, a $33 billion loss in market capitalization
Drop thought to be due to slowing economy, overvaluation of stock price or problems with the company’s future strategic direction
Economy had experienced uninterrupted growth since 1992
Trivia Time with Todd!
What proportion of the world’s countries had a GDP in 2004 less than $33 billion according to the world bank?
2/3
1/3
1/2
5/8
11/16
Accounting Policies
Point of Sale revenue recognition
Cost as sold
Perpetual inventory system
Nothing interesting or exciting
“Everything is Kosher” - Tom
Growth Initiatives Classroom Opinions
Buy it Yourself customers
Professional customers
Store