I’ve written about Home Depot for several years now – through their “down years” (with Nardelli at the helm) and, more recently, their “up years,” with a new CEO who tends to instruct staff to practice customer-pleasing actions.
This change in approach is said to be the result of hiring more full-time personnel and training them well, as opposed to the former practice favored by Nardelli of hiring principally part-time staff (and saving on benefits as a result). I’ve personally experienced the results of a customer-centric focus – always good to put the rhetoric to a test and find that things really do work as professed. In addition, Home Depot’s recent earnings record has been impressive ($3.05 a share versus the projected $2.84). In the past, home sales tended to be the trigger point for customer purchases at Home Depot; in today’s housing market, homeowners are hanging on to their homes and spending more money to fix them up, feeling comfortable doing that since their home values have increased. Home Depot, itself, is doing much the same thing – rather than building more stores, they are improving their existing ones. A nice trend to see. One of the recent in-store improvements is to establish pick up lockers where customers can retrieve goods they’ve ordered online without having to check in at a service desk. Now, that’s what I call a real improvement, since I’ve been party to waiting while service desk personnel retrieve goods that were supposed to be set aside for my pick up. Home Depot has also used its cash to buy back a third of its shares in recent years. And, even though, from an investor perspective, the company is seen as trading 19.8 times their expected earnings, versus 17 times earnings for rival, Lowe’s, they definitely can’t be seen as a fixer upper – an accurate line noted in a recent WSJ article.