GANGING UP ON HOME DEPOT – CORPORATE

Home Depot logged a third quarter earnings report of 3.6% growth from the year previous.

And, yet, Wall Street is up in arms because “the analysts” were expecting 4.7% growth (ref WSJ).  Wait a minute – why would you flog a company for doing well, just not well enough.  And to the extent that the stock declines 4% overnight.  How does that help the company to do better the next time – impoverishing the company is supposed to offer some comeuppance somehow?  The company explained that an overhaul of its information-technology systems was progressing more slowly than anticipated (those darn IT people again!) holding back some of the gains that were expected and that higher than anticipated “shrink” (read that as theft) had cut into profit margins.  These are clearly temporary problems and easily solvable – for one, light a fire under the IT folks or get rid of them and get others that are more competent.  And, for another, beef up oversight of the products to deter “shrinkage.”  But, according to the Journal, “investors had such high expectations for the company that they will likely remain disappointed until proven wrong.”  More and more as I hear of the reactions of “investors,” I’m convinced that those in brokerage houses who are doing the buying these days (that is, “the investors”) are millennials with very thin skins.  We’ll follow this closely – just so we can tout the fourth quarter success of Home Depot, for the benefit of “the investors,” if nothing else.  You go, Home Depot!

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