this morning that's my pleasure and myprivilege to introduce to you our speaker the cfo and executive vice president corporateservices at the home depot miss carol tome you know when i thinkabout carol there are a multitude adjectives thatcome to mind i think many would probably concur with that assessment there are two that stand out aparticular and that is selfless and active. i think that you will notice abit of a recurring theme as i walk you through her background in just a moment
as to why those are both applicable. youknow if you ever find yourself wishing the eternal wish if i had moretime if i just had two more hours i would bemore involved in my church would serve on this charity or take a moreactive leadership role and then use that wish is an excuse forwhy not to do so i think carol will make it very difficult for you to ever use that again and be able to look at yourself in the mirror with a straight face because this is a very busy person yetsomeone
who gives tirelessly of herself when askedand does so in a manner that we all quite frankly getthe benefit from. um, i got to know carol a few yearsago. mayor reed had asked carol would she please chair the search committee to replace the ceofor the outgoing ceo at the world's busiest passenger airporthartsfield-jackson this is mid-year, midsummer, not an overly leisurely time for caroland her team and he asked and if any of you have been through aprocess like this this is a
this is a pretty significant investmentof time and she obliged willingly and i will tell you well the absoluteconviction that years later it is still as thorough as comprehensive and as efficient of a process but i've ever been throughwith a search committee and if you look at what carol has done and if you look at hercontributions to atlanta to home depot to the country i think ithink that's a a pretty easy bridge to cross caroljoined the home depot in 1995
a service as its cfo since 2001 in 2007 she was named executive vicepresident a corporate services carol began herprofessional career as a commercial lender the united bank denver's now wells fargoand then spent several years as director banking for the johnsmanville corporation prior to joining the home depot she was vp and treasurer river with international corporationaside from her responsibilities at the home depot
carol serves on the board of directorsfor ups where she is also chairman of auditcommittee and as a deputy chair of the federal reserve bank plans for directors again a firmbeliever in community service carol is an active member the committeeof two hundred she is on the board when a good atlanta botanical gardens additionallyshe has served as chair for the metro atlanta chamber ofcommerce in 2012 carol has received multiple accolades during her years ofservice
most notably number two on the listbessie offers in corporate america has produced by thewall street journal as well as the top 50 most powerfulwomen by fortune magazine i would ask that youjoin me this morning and welcoming to terry our speaker and my good friend carol to me well goodmorning everyone sacked thank you so much for thatintroduction my goodness my life past for automated thank you for that inctruly the airport search was it was a success but it was because exacthe did
all the heavy lifting so if you everneed to put someone on your team call him up because he can help yousource the best talent you know really is a thrill for me to behere thank you all for coming up this morning i just want to start by sayingwhat a gem the university george's now i went to the university ofwyoming and when i was out wyoming the oh ithought about george i thought about football but when i moved to georgia irealized that the university of georgia and the terry college of business produces outstanding business leaders
in fact at the home depot the financeteam were about 700 people strong i have eighty terry grats working for meisn't that awesome yes of them they could each i picked upa new york here this morning so to be wearing high so awesome and let mejust drag on took me for a moment she's in our investor relations group and last year institutional investormagazine do any of you read that magazine something you do good its covered rackbut it worked for those of us in finance ethical thing
and they rates um i investor relations teens and last year the home depotinvestor relations team ranked number one took it all the way sotiffany outstanding so it's again a thrill for me i gottasummer prepared remarks but what i'd really like to do is have a dialoguewith you because i think that's the best kind interaction is when we get to talk toeach other so all start by sharing with you my point of view on the economy housing a little bit about our strategyand then wrap it up with some comments
about our financial results and then it open it up to you because ireally want to hear from you so first on the economy yesterday's newsis pretty big news lessen its do do you expect that to happen you get know i'll certainly the market doesn't imean i was watching our stock price yesterday and it was down down down andthen chairman bernanke he came out with hisannouncement at two o'clock in our stock price just jumped and the whole market jumped rightbecause everyone to the bx i've relief
that the federal reserve is not startingto ease of quantitative easing and i think they're probably a couple ofreasons for that first if you'd look at the general economic environment you know thatprojection for gdp growth in our country this year is between 2.3 and 2.6 percent but we only grew 1.8 percent in thefirst half which means the back after the year willbe more growth be than the first tattoo your and you mightsay well why is that whether couple reasons one
exports are higher than they've been inthat's good news for economic growth also companies companies like the homedepot we are spending more capital than we have in prior years our capitalbudget this year is 1.5 billion dollars that's up a couple hundred milliondollars from what we spent last year and we're spending more in the back halfthan we did in the first half a beer so the overall economy well not robustis growing but that's really not what the federalreserve looks at they look at to things they look at unemployment and they look at core inflation and thegermans danbury
a very opinionated about his point ofview on unemployment into unemployment reaches around six anda half percent he's gonna keep short term rates low that's what he said and as you knowwe're not there really about 7.3 percent they also look at core inflation the onethe targeting around 2 percent were not at two percent so when they look at those doctors ithink that's what gave rise to their decision yesterday for us we look at the overalleconomy
well we spend more time looking athousing and metric that we look at is privatefixed residential investment and here i am showing you private picsresidential investment as a percentage of gdp and we have datathat goes back to the nineteen fifties and so you can see how private picsresidential investment has performed over sixty-some years and when i willcall out is when the housing bubble occurred back in 2006 private picsresidential investment stood at 6.2 percent a gdp and then as you all know we wentinto a recession
the greatest recession since the greatdepression it was a housing lead recession and you can seewhat happened to private pics residential investment it dropped dropped as low as about 2percent well we at the home depot we felt it andwe felt it hard between 2006 and 2009 we lost 13 billion dollars in sales that's the equivalent of a company likebed bath and beyond wiped out now housing has started torecover
and so have we starting in 2010 arestills started to grow and by the end of thisyear we will have recaptured almost all that thirteen billion dollarsin sales last now guide is asked for a show of handsany if you shop in our stores well thank you cuz you're helping us sowe really appreciate your business thank you for doing that know a coupleother data points on this chart first you can see private pics presentthat's what this means growing and that's helping grow our cells butafter the end of the second quarter it stood at 3.1 percent gdp
well prior to the last recession that'sthe lowest it's ever been so i look at that from a glass half fullperspective and say hey we've got a lot of growth ahead of usthis is good news and then all statistics revert to themean rights and the mean over the past six someone years is 4.6percent so we've got a long way to go to revertback to the me so as we think about opportunities forgrowth at the home depot we say wow we've got a lot of growth ahead of usjust here in the united states as housing starts to improve but it'snot just the economic environment that's
impacting our business it's also our strategy so i'd like totake a few minutes walk you through our strategy we have a very simple three-legged stool strategy and ifyou've read jim collins good to great you'll recognize the construct for thisstrategy %uh the first leg of our stall is whatwe're passionate about and we're passionate about customerservice the second leg of our strategy stall iswhat we're best in the world at and we think we're best in the world atproducts
for home improvement and the third likea bar stool is what drives our economic engine andour economic engine is driven not by capital allocation driving productivityand efficiency in our business no this lake thestrategy has changed over time i start with the company back in 1995and in 1995 we have 400 stores and revenues about fourteen billiondollars today we have over 2,250 stores so our economic engine for a part of ourhistory was driven by square footage growth andwe were very much like that kevin costner movie
field of dreams it was billed the storethey will come and that's what we did at one point we were opening a store every 36 hours well can you imagine and i run real estate construction teamcan you imagine but would that's really behind us now that'sreally behind us ok just do not know you were here hikerstds another 20 per person so great sorry so anyway that make up the storehas changed now we join the legs at the store at the seats by what we callinterconnected retail
interconnected wheat ale is really justleveraging our physical assets with are virtualassets and other words our website and ourmobile applications because consumers are changing andyou're nodding their heads right how many people are shopping of yourphone or shopping of a pc right the consumeris changing and we have to change along with that sojust to make this real for you let me talk a little bit about customer service we break our customer service strategyinto three major platforms
service in stock and store appearance and from a service perspective we've taught all of our social so wehave 325,000 people working for with todd oliver associates our servicestandard which we call first and it's a simple acronym standing forfind find the customer inquire what they're working on themrespect them solve their problems and then thank them we've all been trained on first i'vebeen trained on first all the seven train our first
and we think it's making a differenceand i hope you're seen that difference inside of our stores from an in stock perspective we thinkthis is a critical component of customer service why ifwe're out of stock you are dissatisfied so during therecession we transformed our supply chain movingfrom a supply chain where the majority of products were shipped directly from are manufacturers to our stores now the majority of our products flowsthrough what we call rapid deployment
centers their dc they flow to our stores andwere able to increase are in stock position are instocks now there over 99 percent and that storeparents know we're working warehouse we r ourstores a hundred and six thousand square feet filled up with steel they're workingwarehouse but we've got it make store better-looking if you will so we created merchandising execution teamsthese are men and women who are
responsible for the way the store looks how the items are faced on theshelf also working on navigation you know thenumber one question that we yet from a customer where can i find it right or worse the restroom so what weunderstand this so our stores are hard to navigate sowhat have we done well if you haven't done it yet and ifyou've got a smartphone please download our home depot ap it'sfree and if you download the app it willlocalize to the store that you're
shopping and you can bring up a storm ap and youcan type in where is in all story right where it is in storeis not a good thing outright yeah with the way would i knowwe are at the home depot we actually the officer team we work in our storesso we adopted store 1 store one month and we work in thestore every week for that month and i guess it's a great opportunity tounderstand you know the experience our customers from working on the floor the store aswell as the experienced are so ships
have working for us is a really greatexperience and i certainly have been able to take those learningsbacking me support your finance person what does that matter it matters a lot because we understandthe experience that your customers are going through you can make sure that your allocatingthe capital and the resources to make sure that that experience is thebest experience now from a product a story perspectivewe also breaker strategy down into three major platforms i'll start withthe bottom-up thats
page merchandising transformation thisis really just new tools that we're bringing into ourstore a match in this we carry about 35,000skews per store 600,000 skews on our website but every store is a bit different we need to better localize the store for the customer we meet me to better not only localized min a certainperspective but also from a pricing perspective
and merchandising transformation is justhow we talk about new tools that we are introducing to our company so we can do just thatyou know if you shop our bucket store which is just down the street from here its very different customer base that astore in moultrie georgia so for mostar company remerchandised ourstores the same way well that's not the futureretail the future retail is merchandise in the store forthe customer was shopping in a store and our new tools are allowing us to dothat from a product a certain
you know we really don't sell items wesell projects and we have to make sure your that weare bringing into our stores and our website everything you need to complete yourproject so if you're painting a room don't justthe paint any paint you need rollers the pressuresyou takes you meet our except for so we really spent a lot oftime making sure that we are sorted correctly for the project is the last thing wewant to do is to go home
and realize that 0 rats i forgotsomething and anglo go to your local ace hardwarewhich may be more convenient for you or heavens for bed company headquarteredin north carolina i mean we just don't want you to do thatso we're really focused on assortment and then portfolio strategy of course isjust the way we talk about how we run our business from a profitabilityperspective just as you can appreciate i our profitsare very different based on the products that wesell we sell appliances were the thirdlargest retailer appliances
in our country well appliances arefabulous but they're very very low margin so if we saw appliances only we wouldmake very little money as a company so we compliment our appliances with forexample those brushes i talked about forpainting projects you make a lot of money on to us iprobably shouldn't tell you that but we do so this is how we run our businessthough to make money this is to make of course now talkingabout
interconnected retail just to give you alittle bit more color about what we mean here we have spent and over invested in this experiencebecause we know we must if we don't we will lose so we now have buy online pick up in store buy online ship to store buy online return to store we are doing everything we possibly canto bridge the experience between our stores and our are online make sure wehave the right experience for customers and here's the cool thing about this 30percent
all the orders that take place on ourwebsite are picked up in our store is not also it's reallyawesome so we will continue to invest in this toensure that we've got the right experience for our customers let me just make it real for you why dowe care we have the number one market share mostthe category so much with we sell as you would expect so let's takecategory like power tools we have about 35 percentmarket share power tools in total but when you go online
guess who has more market share than weonline amazon exactly this is why we care this is why we care so desperately aboutmaking sure that the experience is the right experience so what are we doing about it it's notjust about buy online pick up in store by law and return it starts at right it's about working with our vendorpartners there's no better time to work with your vendor partners then when you have number one marketshare so we can go to our vendor
partners and say room we see that you're selling our archcompetitor we need you to stop doing that and withyou stop doing that we will give you more volume and you will when so manufacturers likemilwaukee makita who used to sell amazon no longer do they only sell us so when we are nowredefining exclusivity with our vendor partners its exclusivity across all samples thisis how we think we can win not only with
our store experience but with our vendorpartners so on let me then kinda wrap this upwith how the numbers are looking and the numbers are looking pretty goodso last year we set for the target to takeare operating margin to 12 percent and our return on invested capital to 24percent by 2015 and we call this the 12-24 target reaching these targets would makeus one of the most profitable and highestreturning retailers
in the world and we are well down ourpath a reaching at the school so if you lookat our results for the first half this year you can seethat we've had some nice cells grow our same-store sales growth were upalmost a percent and in the second quarter we haddouble-digit positive cells now this was the first time in thesecond quarter that we had seen that since 1999 and the second quarter was actually ourbest performing quarter in 21 years if you look at earnings our earnings areup 23 percent so for the finance people
in this room that's called leopards and that's reallygood leverage to the cells up a percent in earnings up 23 percent pretty good number inventory turns whichis part a return on invested capital well up too tense to 4.9 times orgetting more velocity with better in stocks that's what youwant no i didn't talk about the third leg or strategist all which is capital allocation but let meposit talk about that for a moment we as a marketing tagline you may haveseen our ads
our tagline is more saving more doingwell in the finance world our tagline is more saving moreinvesting we're really focused on creating a virtual cost outlook: so that we cancontinue to take costs out of our business which allows its to invest it back andhigh-return projects that defines who we are as anorganization this virtual cost out blue which generate a lot of gas as a companywe generate over seven billion dollars have cash every year we take about abillion up and a half that invested back
in our business we pay fifty percent of our earnings ina dividend which makes us one of the highest payoutcompanies any retailer and then we take excess gas we buy backshares this year we're buying back eight and ahalf billion dollars our shares mister by taxers and 2010 to you today we have repurchased 1.1 billionshares for about forty to billion dollars and cass so imaginethat we had purchased the service that we have point billiondollars us on our balance
you feel a lot like apple but we've beenbuying back our shares and our average price that wepowershares and is a little under forty dollars yesterday our stock closed overseventy-seven so from a return on investmentperspective pretty good return so as we look forward we will continueto use our capital in that way to invest it back into the business toreturn it to shareholders in the form of dividends and they will buy back shares
so let me just close out with this chart and probably evolvedcharts i've used this is my the returns you know our company in many ways is a call toand i keep looking over and seeing more humble people that i didn't know werehere hello y'all still you know what i'mtalking about were colts right and for all the home depot people if youcut us we bleed orange now part of our call to isour management construct and this is the inverted pyramid wherefrank blake
our ceo his leadership team we are atthe bottom of the pyramid and at the top of the pyramid are ourassociates who are serving our custom we believe in the power this pyramid i've been with the company for eighteenyears i'm the only the senior leader who hasworked for all four rc i work for founders bernie are i was bob nardelli seattle first say six years and now i work for frank play
and i will tell you there was a time inour company's history where the inverted pyramid was turned like this and some of you may know when that timewhat's i won't mention the name but you canfigure it out now that's not necessarily wrong andmaybe in your companies that kinda management pyramid works in our company doesn't work were all about servantleadership so when frank blake became the ceo heflipped that pyramid packed the way it needed to be and westarted to find
our way back in part of our way back is doing the right thing by ourassessments the men and women who are facing our customers every day and let me give you make thisreal for you during the recession when we lostthirteen billion dollars in cells we have to make some hard decisions we had to close stores we had exit areexpo business summit umich octave expo which she would dispense more moneythere cuz we were losing eighty million dollars a year so we had to close thatbusiness
we have to make beer we hard decisionsbut as we were making those decisions we also decided to continue to invest in ourpeople so during the recession were many companies are stopping merit increases or stopping makingcontributions into 401 k plans or stopping bonuses for hourly associates we didn't stop wecontinue to pay merit continue to make contributions into 401k's and we continue to pay our success sharing
no success sharing is a program that wehave our hourly associates it's a very cool program we reward them for doing great work and it's based offa cell's number they get within a certain percentage ofa cell's number we pay out money to our hourly associates for the first half of 2013 100 percentare us stores were in successor in all the like a handful of ourcanadian stores were in successor on sunday we had our success sharingcelebration we paid out $137 million dollars
to those associates is not exciting forthem it's really awesome and were seen in our results you know it's not just us talking wehear from a hundred i was some customers every week who waitus on a number number attributes we roll it all up andwe look at our net promoter score and net promoter score is north seventypercent and we don't just listen to thecustomers who are shopping in our stores cuz hopefully they are satisfied we also look at survey results like theuniversity of michigan survey or jd
power survey to see how we are trending are we doingbetter we still have opportunities for sure what we're doing better so i'm often askus rossiya 0 if successor it's not a huge expensefor your company and i say no it's an investment because i believe and what bernie marcuset and bernie marcus said if you take careof your soc its don't take care of the and the rest will take care of itselfbelieve it to my
the other aspect of our business and whywere called our values we have 8 core values theseare values that we we're on our aprons but its we bringthem to life we bring them to life every dayby trying to live the values and when you employ over 300,000 peoplefor sure it's the equivalent of a small tell her big small city i should saywhen it has about apples and when we finally have to deal with that but generally speaking our people are people cool reflected these core values andi'll what walks through the entire value
will but maybe comment on on a few 01 entrepreneurial spirit you might pass way your $80 billiondollar company by definition be entrepreneurialyou must be just one bureaucratic but mf well the truth thisbureaucracy creeps in every day and we do our best to try to smash itget rivets because bureaucracy can killcompanies so we trite every day to be nimble tolook around corners to anticipate where the customers goingbecause the retail landscape is littered
with companies who have gone a waybecause they didn't to that think about circuit city think about borders think about what'shappening at sears what's happening at jcpenney retailersgo away if they don't stay nimble quick in tunewith the customer so every day we tried it keep thatentrepreneurial spirit allied the other value that i'll mention is getting back very proud of ourcommunity efforts and reason i wanted to comment on it nowis that we're in the midst
celebration of service between september11th veteran's day we will do 300 community projects acrossthe country in celebration are foundation's missionwhich is providing affordable living for veterans we've committed eighty million dollarsto that comes we spent about fifty five milliondollars against that and it is such a joy for us to be able to give back notonly a bar dollars but i love our sweat equity to ourcommunities i worked on a project earlier this week and
it's just awesome you know southeastatlanta overbuilding a community garden that will serviceveterans as well as the community at large in its too it's just cool thing and let me tell you it takes a whole lotof people to do something like that we had 200 people on site the big car so that's another value that i wanted toshare with you zack you were kind to ask me to come here today you for me this is my way to getback a little bit
i hope it's been worth your while and ireally would like to take your questions on we can talk about and and it is broadcast i think doing so wehave to wait for a mic perhaps is that rights will give them the directionsfelt a that's fine are carol is going to take questions and raise your hand and place way from mikebecause we're live on webcast so we need to be able to carryso carol thank you thank you thank you very much for a mostenlightening and i've earning talk
you i am i'm at one thing about yourinternational future know you've had some blip summer road onthat especially in south america and chinawhat does the future hold their yes so the question is about ourinternational business we are the number one player in canada and mexico and your spot on ourexperience in other parts of the globe have notbeen so successful so we did go into chile and argentina that venture did not work for lots ofreasons
well you can see and growing middleclass in the country it's very very hard to do business thereand we exited that this and that was the right decision we went into china in 2006 with the 12store acquisition and we did everything wrongin china kelly barrett who is our chief auditexecutive she can tell you the horror stories me doing business have do business inchina gets hurt it's really hard it's acommunist country for heaven sakes
but we did things wrong to we had thewrong business model you know the chinese don't do itthemselves we couldn't break through to an three-step distribution so we made nomoney it was just made no money and so i kepttalking to our ceo frank blake about it i'm shut this down shut this down not makingany money he's like we're not gonna shut it down you're gonna fix it so he gave me theretail business i'm like itself started to you really taken apartsaid no this business model will not
work and we sadly had to reach the decision to closethe stores but what we did do is we started a newbusiness in china and this is a stand-alone pain so weopened up about it 1200 square foot with are private brand paying pinkthat's manufactured in the united states and sent china we were actually after one year making money in thatbusiness but here's the sad thing we looked at how big it could be in andwhy you think
china is this in for miss country withan enormous economy not so much in our space so as we model the dow we realize thatwould take us about ten years to get to a hundred million dollars insales a hundred million dollars in sales forour company we can bring one skew into the united states and get hundred million dollars and one year so we put our stuff that we can make missusmake money but we're exiting rex king china we'll keep our sourcingoffice there
so then we feel we study the rest theworld western europe you don't really wanna go to countrieslike italy were more people are dying being born so we don't see opportunities in westerneurope economies been down seven quarters in a row it's heavily over stored from homeimprovement market eastern europe same thing we don't see opportunities there asiaweek said no can't fis the price it's not big enough we're just going toreally focus on where we are
the home improvement market in theunited states $300 billion dollar there are so many cells to go get righthere in this country we can make a lot moremoney doing that that's a good thing for our shareholders for that carroll could you come in on theaffordable care act and its impact on a retailer well the affordable care act impacts alllarge employers so obviously were no exception i i'lltell you this about the affordable care
act we're not gonna let a change and lawimpact doing the right thing for our customersor our associates so we will continue to staff our storesto meet the needs of our customers and we will continue to provide benefitsfor people good morning thanks for coming actuallya spitting years a big box retailer best buy socket appreciate all things you'respeaking about or are so i think i found their way youknow they're really losing it for a while but it appears
why i think it's to your point aboutmake sure you add jocelyn invested too much real estate inintegrating online experience united really relate to what you'resaying about my question is actually about as you know the world football fans herebut i recently read an article arm about how so many brains aredrooling over the espn gameday experience and how homepeople has such a strong presence there so i'm curious you know along with gameday and other sort of marking ventures iknow this i think i
in california texas ya sponsors stadiumyou know how have you been if it from those typesof investments arm in an expansion of your brain well the truth yes with the exception %uhespn game day our sports marketing has anegative our ally arm and so we are actuallymoving more and more away from with theexception of gameday the something really miraculous about atso we're really committed to that we love that
but most marketing dollars marketing formarketers in the room why how you're going to change how youknow if you think about how we used to spend on marketing dollars how we do now we are way you weretalking to digital moving away from paper you know we grewup we grew up with our flyer that wasprinted every wednesday you'd walk stalwarts with the circular are we setfor the offer all going away all going away and it's moving digital andradio
because there's a higher return for uson radio nt and tv is moving away from cbs and abcthe world more loser the world things are really changewe use marketing analysis to get to determinewhere we get the best return on investment period politicalit's merely scientific the best way to describe for marketingfor sale many of us was the sort but most alright it's a appealing it's becoming really a science i'm here to talk about anything but itseems like the question may be waning
just better way for the mic thank you on you've talked a lot about the in storeexperience but talk a little bit more about the out a store experience in your online presence do you plan tobattle amazon online are convinced the customer that's better to be in the store to getthat product making a lot of investments for online experience to make sure it'sthe right experience for the customer we amazon is a fabulous item retailer
there is no experience other than they've got a great checkwith us you don't come to them before i don'tnecessarily come because you need something you got something that's not working inyour house or you got an idea you want kitchen remodel your bathroomall you want to build a base you don't go to amazon for that you cometo us so that seeks periods what have on you can get it in the store what youhave that experience online
so all ovr how-to videos how to fix aleaky faucet how to install a toilet all those thingsyou think can do this myself just someone wouldhelp me all posted to our website there also all posted to you becausewe're not gonna force the customers to be in a closed community we're going to get the media out therethe way the customers media and is letting people take home to puthome depot you know i think i'll go to but they may easily go to you too forthat same piece of information so we're posting it all out
getting that x your in tying it back toour stores looking at solving the last-miledelivery know we're building direct fulfillmentfacilities that will be pardoned and and your johnyou're working on a surge in helping us develop learning materials for this these direct the film facilities will beways getting product that's ordered online more passionately delivered to ourcustomers that i think about gosh we've got almost2,000 points for delivery in this
country with our store so why not leverage that amazon doesn't another building out distributionfacilities we them day all we have to work on is routing and with all that last mile andfor those of us who buy big bulky products like washers and dryers or riding lawn mowers or barbecue grills and we've got smallcars so i need to get this home wouldn't itbe great to have people just get it home
for you know by the way when he gets home to youwhat about put it together and about away holloway of right so this amistad doing any of that stuffthis is how we can make an experience that the sticky experience yes what kinda returned you see yourfeedback are can contribution to the experiencehave your in store how to use as opposed to watch it onyoutube come down the store and learn how to install tile
we have these wonderful workshopprograms both for diy rhys at large but also withthat do it herself gas a lot of fun we get a tremendous amount a positivefeedback offer those workshops we're also working on how to make thestores more over just so it's been attained so we can actually try out products knowthat the cool thing is you can try before you buy it so you can see thathappen summer stores on the weekends actually have demos places that you cantry cuz thats you know if
we live in an experience economy youexperience i just shop that's why you know when we lost our wayfor a while when our customer service you know welost our way the customer reaction was he violence because customers have cometo know as a place for an experience a place where they would like to shopwhere they'd like to talk to our associates and you don't have that same a motion what a to most stores right i mean if you goto one publix or another do you really notes right it's not really and be
our stores in your get to what you'reworking on so that's why gotta continue to focus on that experience well secured to stick with a quickquestion i you cheryl i we really really enjoythe presentation from my anticipation for other challenges that you see can youshare with us just something say you know may keep you up at night orjust some the challenges that your anticipating for the for the future sure
in a recovering environments competition is invited so what do we do to stay focused on our business to make the competition irrelevant it'svery easy to get sidetracked to say of so-and-so just opened up a newlumberyard or oh so-and-so just opens up a newstore and i cant get focused on that without losing sight onwhere you need to go this is a real just justrequires discipline the state focused on whereyou're taking the company
meet the competition irrelevant but theyare coming in so if you look like a companies like lumber liquidators havingvery good results and so some other folks will say we've got to go kill them like not what you need to do is have thebest laurin offer possible for your customerbase not worry about i would say that's onlyone thing that keeps me up i would say you know the globaleconomy good and we have to be are wary of that in and aware of that and understand thatit could have implications
what happens here and what happens herehad implications for the global economy the world is flat you know we sourceabout 11 percent of our products from outside the united states so it matters to us what's happeningoutside the united states so always you know watching world trendsand figuring out what disruptions could comeour way if things were to go really sideways and parts i think from a risk perspectiveyou know kelly barrett archibald executive ishere from a risk perspective i think we
are all concerned about cybersecurity tax coming in protectingour customer data our proprietary pricing information so our it systemswhere they need to be do we have the right detection andprotection in place so those kinds of things from a risk perspective of course keep probably the other thing i'm speaking very candidly is complacency no i
i've been again with the company a longtime in 1999 really great here the pot pastadouble-digit cops our stock was trading at a seventymultiple 7d multiple and we good really good fast-forward ten-month october up to 1000 we had ourfirst earnings warning ever in our companyhistory and the stock sold off about 25 that day and i'll never forget itbecause i'm sitting in arthur blank office
on the phone with our largestshareholder who was fidelity at the time our school me school remain at him and i had my it in my hand and my other hand on his desk they're justscreaming and he reached over and patted my headit was most generous kind just her he could have done becausei put a lot like i'm gonna was quote so desperate i of the and really i think it's because wegot complacent and shortly thereafter we have a new ceoso one
i talk to our leadership team i'm say wehave got to fight against complacency because here we are now working feeling really good not only are wegrowing ourselves we are beating the pants off her competition in northcarolina our stock is trading at a record-high so we're a feeling really good any we lose that competitive edge we startfeeling really good we can get into so much trouble so wejust everyday gotta wake up saying this is the battlesabout fight every day focus on the
focus on our strategy hope we continueto do the right thing so i'm looking at the clock and i knowyou want it finish up here soon so maybe one morequestion without if there is another the earlier conversation about amazon andbest buy got me thinking about children which sure familiar with theterm to some people experience much about up that and if so what are you doing to combatall you have to do is go into a store and you can see people
with their smartphones you know takingpictures for the products that we sell going to google shopper whatever channelthat they used to do so roman of course with you so what do wedo about it a number thanks we acquired a companylast year in austin texas call black workers and black locus is a is a big datacompany at those prices scraping for us so we are constantlyscraping prices of compact competition both online instore competition in comparing those retail prices againstours there are some products in the
store that we will not be beat so we will make sure that we have thelowest price there are other products that we saw inthe store there were like i care about so much like we sell the with water coke in ourstore that we're not top of mind for that so somebody's cheaper than us gonna be cheaper than us it's aconvenience so we're we are very focused i'm pricing the other thing that we'refocused on its proprietary brands you can shower room for a proprietarybrand with that
outstanding brands if you think up husky hampton bay glacier get glacier bay and the list goes on introduced a newprivate brand last year called hdx haven't purchased hdx product i would encourage you to try it out webrought into cleaning the quality is better than anything youcould find at a comparable price point and its we try it out we'll up this we brought it in last year we're on track to be seven hundredmillion dollars on our way to a billion
dollars in who can't showroom that's ok it's a combination of things that we'redoing to stay competitive thank carol cup spare thanks carol for that presentation thinkwe all understand both why home depot is doing so wellright now and i cant see you somehow gettingcomplacent just doesn't it doesn't it doesn't calculate for mewould like to give you the supplemental ok which is a sculptor by alpharetta eb
beautiful and semi-trailers got got yourname now it's got the right color orange onit's got your name on it tsou thank you thank you very much appreciateit thank you it on
Home Depot Furniture Legs
