Home Depot: Not Much of a Strategy

Home Depot (HD) announced the same difficult numbers as Lowe’s (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?

Comments

[mgv11:]

George, while i agree with the HD and LOW comparison, but your comment that they need to do something else, but to stop there seems pointless. Has the market changed? have the laws of construction and remodeling changed.... I don't think so. If people aren't buying anywhere, what would spend money on changing to that would spur the american public to buy? Government rebates on gas guzzling mowers? You seem to be accusing them of something, but I don't think you even know.

Aug 19 11:52 AM

[Mclovn:]

One example of how Frank Blake has improved efficiencies is the rollout of the new RDC's. I think there are to be about 20 around 2010ish. A second, they lowered their credit card expenses. Third, they gained market share. Finally, they had positive comp transactions in the U.S for the first time in 5 years. While overall macro sales may be flat or down this company is improving their efficiencies. Gutowski, how do you still have a job? Did you actually read the 8-k or listen to the earnings calls of both LOW and HD? I bet you don't even own a single stock, just write dribble and collect a fat paycheck.

Aug 19 11:57 AM

[STLOUIS SAM:]

What a load of crap to type, just to stir the pot. Home Depot has now for several years, been spending loads of money in improving stores, cleaning stores, polishing stores, re-lighting stores, staffing stores and training sales staff. Offset with reduced inventories, internal cost containment, elimination of PCard expenses, Home Depot has upgraded virtually every department within the store. Even during the current dismal environment, they continue to focus on improving the consumer experience. They have positioned themselves so far ahead of the 'ghetto-like' Lowes, that when the economy does recover, they will be light years ahead of Lowes in virtually every aspect of the consumer visit. Your one dimensional thinking is rejected. I am afraid you simply do not know what you are talking about in this matter.

Aug 19 02:14 PM

[Just Thinking:]

It alway amazes me at the bias you portray against HD. I didn't hear a word on how Lowes' idea on how to handle this economy is to open more stores. If you were consistent in your criticisms you would have jumped all over that just like you do with HD. Stlouis Sam and MClovn have it right, HD is working hard to make this company work NOW and for the future by producing a better distribution system, improving the customer experience, and taking care of its associates, an oh by the wayn declining any bonus' for the oficers of the company while still keeping the associate success sharing program alive and matching 401k. You, my friend seem to have a bias against HD. All I ask is, do the research before your open your mouth.

Aug 19 08:19 PM

[buoy:]

Home maintenance and improvement cannot be deferred forever.

Aug 20 08:15 AM

[STLOUIS SAM:]

Greg, how many shares of HD did you buy when it was under $19.00?

Aug 20 10:08 AM

[RPM:]

Home Depot has improved customer service, Supply chain, reduced positions that did not directly effect customers, and increased positions that enhanced customer service. I'm buying Home Depot.

Aug 21 05:39 PM

[rocka19:]

Why are you giving HD kudos for opening RDCs? Lowe's has had them for years. Everything that HD is doing now Lowe's has had in place. Why not report facts vs. offer half-baked opinion?

Aug 22 09:27 AM

[HVAC:]

Cmon u been in home depot lately?
Clean,Bright and EMPTY.
One cashier...The rest self checkout .great for supermarkets bad for large items.
im just saying...


On Aug 19 02:14 PM STLOUIS SAM wrote:

> What a load of crap to type, just to stir the pot. Home Depot has
> now for several years, been spending loads of money in improving
> stores, cleaning stores, polishing stores, re-lighting stores, staffing
> stores and training sales staff. Offset with reduced inventories,
> internal cost containment, elimination of PCard expenses, Home Depot
> has upgraded virtually every department within the store. Even during
> the current dismal environment, they continue to focus on improving
> the consumer experience. They have positioned themselves so far ahead
> of the 'ghetto-like' Lowes, that when the economy does recover, they
> will be light years ahead of Lowes in virtually every aspect of the
> consumer visit. Your one dimensional thinking is rejected. I am afraid
> you simply do not know what you are talking about in this matter.

Aug 26 11:45 AM