‘Let’s Do This’: Home Depot Builds Growth on More than Bricks and Mortar

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Home Depot

The beehive of activity at US Home Depot stores over the Memorial Day weekend affirmed what the retailer itself and the stock market have been telling us lately: American consumers and investors are bullish on the home-supplies leader.

In fact, Home Depot’s solid recent performance—first-quarter earnings per share up 19 percent over a year ago, a 9 percent increase in revenues over the 2015 period and shares that are consistently outperforming the market—place its performance in solid and welcome opposition to the intensifying woes of other brick-and-mortar retail sectors, such as department stores and apparel chains.

And, of course, selling bricks and mortar is the point for The Home Depot. America’s housing recovery continues to pick up steam, meaning that everyone from construction contractors to do-it-yourselfers are flocking to its aisles for everything from 2x4s to shingles, from geraniums to fertilizer, from power tools to paint.

Indeed, the fundamentals of Home Depot “continue to improve at an accelerating pace,” concludes SeekingAlpha.com. Many investors are also bullish about prospects for rival Lowe’s.

But Home Depot isn’t just gaining because of the strength of the housing economy. The company itself demonstrates “impressive consistency” in its performance, SeekingAlpha.com noted, while Zacks credited the chain’s “long-term growth initiatives” and “merchandising tools.”

And more investors and observers are noticing Home Depot’s strength in e-commerce growth as well. Home Depot is “constantly investing in [digital] content, developing its website and improving mobile experience to provide better customer experience,” Zacks said. The retailer has also launched a buy-online-deliver-from-store capability. As a result, Home Depot posted a 21.5 percent increase in online sales and double-digit percentage increases in online traffic growth in the first quarter.

Indeed, further expanding e-commerce has become “a linchpin of Home Depot’s strategy for sustaining revenue growth while adding hardly any new traditional stores,” said AJC.com.

CEO Craig Meaner told investors in a conference call that Home Depot believes “blending of physical and digital channels into a seamless customer experience, which we call interconnected retail, provides a unique opportunity for us.”

Home Depot

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