Home Depot: Not Much of a Strategy

Includes: HD, LOW
by: George Gutowski

Home Depot (NYSE:HD) announced the same difficult numbers as Lowe’s (NYSE:LOW) did. Same store sales and overall revenues are negative. The market found comfort by concluding that the numbers were not as bad as expected. This style of delusional thinking was used on the Titanic when from time to time it was noticed that the ship was not sinking as quickly as they thought.

The situation is difficult. The press release shows that management does not have any fresh or new ideas. They just report the negative overall numbers, try to cut overheads and hope for something better. Just like Lowe’s they need to be prepared for a sustained recession and have nothing to offer. Difficult times call for difficult strategies. Opening and closing a few stores does not cut it anymore. The new strategy needs to be shared with the investing world. If there is one?