the home depot, inc. (hd)

by:ILED     2019-12-20
Securities and Exchange Commission of the United States (Washington, DC)C. 20549FORM10-K(Mark One)
Annual reports submitted under sections 13 or 15 (d)
According to Section 13 or 15, in the 2019 interim report for the financial year of the exchange of securities actof1934 (d)
The transition period of the stock exchange actof1934 from Document No. 1 to Document No. 1
Home Depot 8207(
The exact name of the registrant specified in the articles of association)
DelawareState or other jurisdictions registered or organized 95-3261426(I. R. S.
Employer identity number)
2455 steps 30339, Atlanta Ferry Road, Georgia (
Main executive office address)(Zip Code)
The registrant\'s telephone number, including the area code :(770)433-
8211 securities registered under article 12 (b)
Title of the act: each class name of each exchange registered for common stock, $0.
The face value of the New York Stock Exchange registered under section 12th (g)
Key points of the act: if the registrant is healthy, it is not indicated by a check mark
Well-known experienced issuers as defined in Rule 405 of the Securities Act.
Yesnono? Indicate by check mark whether the registrant does not need to submit a report under Section 13 or section 15 (d)of the Act.
Indicate by check mark whether the registrant (1)
All reports requested in Section 13 or 15 have been submitted (d)
Securities Trading Act of 1934 within the first 12 months (
Or a short period of time required for the registrant to submit such reports), and (2)
This filing requirement has been bound for the last 90 days.
Yesi no? Indicate by check mark whether the registrant has submitted each Interactive Data File as required by S-regulation 405th electronicallyT (§ 232.
This Chapter 405)
Within the first 12 months (
Or within a shorter period of time when the registrant is required to submit such documents).
Yes, if the declaration of arrears is disclosed under section 405th of the regulations, please indicate by check mark --K (§ 229.
This Chapter 405)
As the registrant is aware, it is not included here and will not be included in the final proxy or information statement referenced in Part 2 of this Form 10 --
K or any amendments to this form 10K.
Indicate by check mark whether the registrant is a large accelerated file manager, a non-accelerated file manager
A smaller reporting company, or an emerging growth company.
See the definition of \"large accelerated reporting companies\", \"Small reporting companies\" and \"emerging growth companies\" in rule 12b
2 of the Trading Act.
Non-accelerated files for large accelerated files
Accelerate reporting companies emerging growth companies if emerging growth companies, indicate by check mark whether the registrant chooses not to use the extended transition period to comply with any new or revised financial accounting provided under section 13tha)
The Trading Act.
Indicate whether the registrant is a shell company by check mark (
Defined in Rule 12b-2 of the Act).
Yes, the total market value of voting ordinary shares held by non-shareholders
The affiliate of the registrant onJuly29 was $2018, or $225. 3 billion.
The number of outstanding shares of the registrant\'s common shares as of 2019 was 103,903,507 shares.
The documents contained in the reference section of the proxy statement submitted by the registrant for the 2019 annual general meeting are incorporated by reference into the second part of this Form 10-
K to the extent described in this article.
Under the Private Securities Litigation Reform Act of 1995, a statement of terms commonly used or defined. Business. Item1A. Risk Factors. Item1B.
The employee\'s opinion was not resolved. Item2. Properties. Item3.
Legal proceedings. Item 4.
Information disclosure of mine safety. PARTIIItem5.
The market in which the registrant\'s common stock, related shareholder matters and the issuer purchase equity securities. Item6.
Select financial data. Item7.
Management Discussion and Analysis of Financial Position and operational results. Item7A.
Quantitative and qualitative disclosure of market risks. Item8.
Financial statements and supplementary information. Item9.
Changes and disagreements with accountants in accounting and financial disclosure. Item9A.
Control and procedures. Item9B.
Other informationPARTIIIItem10.
Directors, executives and corporate governance. Item11.
Executive compensation. Item12.
Secured ownership of certain beneficial owners and management and related shareholder matters. Item13.
Certain relationship and related party transactions, the independence of directors. Item14.
Major accounting fees and services. PARTIVItem15.
Schedule of financial statements. Item 16. Form 10-K Summary.
Signature of content term definitions commonly used or defined accelerate sharing re-purchase Accounting Standards update bodfsbuy Online, delivered from storebobuy Online, Pick-
Shopping in online stores, shopping in online stores, delivery to storesfor-
Previously known as a profit organization for carbon disclosure projects, defined in operating results as comparable sales of compact fluorescent lighting
Sales Department of MD & ADIFMDo-It-For-MeDIYDo-It-
Your self-feeling, health and safety. S.
Environmental Protection Agency employee stock purchase program exchange 1934 Securities Exchange Act as amended financial accounting standards for fiscal 2013 as of February 2, 2014 (
Including 52 weeks.
Fiscal 2014 as of February 1, 2015 (
Including 52 weeks.
Fiscal 2015 as of January 31, 2016 (
Including 52 weeks.
Fiscal 2016 as of January 29, 2017 (
Including 52 weeks.
Fiscal 2017 as of January 28, 2018 (
Including 52 weeks.
Fiscal 2018 as of February 3, 2019 (
Including 53 weeks)
Fiscal 2019 as of February 2, 2020 (
Including 52 weeks.
Lead FSCForest County. S.
Recognized principles of accounting Global Reporting Initiative interline Brands, Inc.
Internal Revenue Services inter-bank London offers ratempirical mode d & ammanagement discussion and analysis of operational maintenance, repair, financial status and results taxNYSENew York Stock Exchange eplccprivate Label Credit Card professional customer repair plan Home Depot Future Builder repair the return of the Securities and Exchange Act of the planned investment Capital Securities and Exchange Commission on 1933, such as amendeds\'s administrative Tax Act of 2017 and the tax reduction and Employment Act apply to the content statement issued under the Private Securities Litigation Reform Act, which contains 1995 certain declarations contained in this agreement, as well as other documents we submit to the SEC and other written and oral information we issue, the performance regarding our future constitutes \"moving forward\"
The \"outlook statement\" as defined in the Private Securities Litigation Reform Act of 1995 \". Forward-
Forward-looking statements may involve, among other things, the need for our products and services;
Net sales growth;
Comparable sales;
The impact of competition;
Implement store, Connected Retail, supply chain and technology initiatives;
Inventory and inventoryStock positions;
Economic situation;
The situation of housing and home decoration market;
Credit market conditions including mortgage loans, housing equity loans and consumer credit;
Issues related to the payment method we accept;
Demand for credit products;
Manage relationships with our partners, suppliers and suppliers;
Continue the share repurchase plan;
Net profit performance;
Earnings per share;
Dividend target;
Capital allocation and expenditure; liquidity;
Return on investment capital;
Cost leverage; stock-
Basic compensation costs;
Rising commodity prices and deflation
Ability to issue debt on terms and rates that we can accept;
The impact and expected results of investigations, inquiries, claims and litigation;
The effect of accounting fees;
The effect of adopting certain accounting standards;
Impact of tax laws and other regulatory changes;
Opening and closing of stores;
Financial Outlook;
Acquisition Companies are integrated into our organization and are able to recognize the expected synergies and benefits of these acquisitions. Forward-
Forward-looking statements are based on the information currently available and our current assumptions, expectations, and predictions of future events.
You should not rely on our progress.
Look at the report.
These statements are not guarantees of future performance and will be influenced by future events, risks and uncertainties-many of which are beyond our control and depend on the actions of third parties, or which we do not know at the moment, and potentially inaccurate assumptions that may lead to significant differences between actual results and our expectations and forecasts.
These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Item 1a \"risk factors,\" and elsewhere in this report, it can also be described from time to time in our future report to SEC. Forward-
Statements that appear to be made only on the date of publication, and we do not undertake to update them, except as required by law.
However, it is recommended that you review any further disclosure by us on the subject matter in our regular submission to SEC.
Content that can be satisfied. Business.
Introduction to Home Depot Co. , Ltd.
According to the net sales of fiscal2018, it is the largest home improvement retailer in the world.
We offer our customers a wide range of building materials, home improvement products, lawn and garden products, as well as decorative products, and offer a wide range of services, including home improvement installation services and tool equipment rental.
As of the end of 2018, fiscal has 287 Home Depot stores across the United StatesS. (
Including the Commonwealth of Puerto Rico and the territory of the United States. S.
Viking Islands and Guam)
Canada and Mexico.
Home Depot stores have an average of about 104,000 square feet of enclosed space and an area of about 24,000 square feet outside the garden.
We also maintain the network of distribution and fulfillment centers, as well as some e-commerce centers
Business website.
When we refer to \"Home Depot\", \"company\", \"us\" or \"ours\" in this report, we refer to Home Depot Company
And its merged subsidiaries.
Home Depot Limited
It is a Delaware company founded in 1978.
Our store support center (
Company Office)
Located at 2455 steps Ferry Road, Atlanta, GA, zip code 30339.
Our phone number at that address is (770)433-8211.
Our strategy your two main goals are to expand market share and provide shareholder value with our customers.
We have been following three principles to drive growth: delivering a superior customer experience, leading product authority, and maintaining a disciplined approach to capital allocation.
These principles reflect how we operate our business fundamentally.
As the retail sector continues to evolve, we must be more flexible in responding to changing competitive environments and customer preferences.
Our customers want to be able to buy the way, time and place they want.
We believe in delivering a seamless, frictionless shopping experience across multiple channels, including curated and innovative product choices, personalized to meet the needs of individual shoppers, and then delivered quickly and economically
Efficient ways are key to our future success.
This is what we call home depot experience.
At the end of 2017, we announced that we will invest about $11 billion in multiple projects.
Work in our stores, employees, digital experiences and supply chains for one year to create value for our customers, employees, suppliers and shareholders.
To achieve this, we are implementing five key strategies aimed at driving the growth of our business: connecting employees to customer needs to connect products and services to customer needs, innovate our business model and value chain with products and shelves, on-site and customers, and these strategies help us create a One Home Depot experience for customer needs.
Here are some of the ways we invest in this experience during fiscal2018.
We serve two major customer groups and have different ways to meet their needs: DIY customers.
These customers are usually homeowners who buy products and complete their own projects and installations.
Our partners help these customers through online resources and other media designed to provide product and project knowledge.
We also offer a variety of clinics and workshops to share this knowledge and build emotional connections with our DIY customers.
Professional Clients (or “Pros”).
These customers are mainly professional refurbished/refurbished workers such as electricians, plumbers and painters, general contractors, handymen, property managers, construction service contractors and professional merchants.
These customers build, renovate, renovate, repair and maintain residential properties, multi-family homes, hotel properties and commercial facilities, including educational facilities, health care facilities, government buildings and office buildings.
We recognize the great value our professional customers provide to their customers, and we strive to make the work of our professionals easier and help them grow their business.
We believe that investments aimed at deepening our relationship with professional customers are increasing engagement and will continue to translate into incremental spending.
As part of our continued commitment to investing in professional customer relationships and important market opportunities represented by these customers, we have created an enhanced online and online professional customer experiencestore.
We announced a new merger plan at the end of 2018. to-
The market strategy of all our Pro programs, including our MRO business (
Used to be Interline)
Under the banner \"Home Depot Pro.
With Home Depot Pro, professionals have access to a comprehensive portfolio of products, including our vast network of storesin-
First-class professional sales team, quality and affordable products from trusted brands, extensive delivery network and online business solutions.
We offer professional projects such as extended MRO classification, inventory management solutions, custom products, in-
Store professional service desk and professional services as well as enhanced credit program.
We also provide and constantly strive to improve our delivery options for professionals, including
Shop that delivers or delivers directly to the job site-
Allows us to provide services at the time, place and manner of customer needs.
Online, our professionals get a personalized experience based on their business, needs, industry, and buying behavior.
Not a professional client-size-fits-
All, the level of value that Home Depot Pro offers-
Increased service to our diverse professional customer needs.
Our professional loyalty program Pro Xtra provides professionals with benefits related to useful business services, exclusive product offers and purchasing monitoring tools, all payment forms can be found in purchase receipts and work tracking can be realized.
We will continue to invest in professional customer experiences to provide the services, solutions, support and online tools they need to grow their business.
Our DIY customers and professionals are our DIFM customers.
These customers are usually homeowners who work with professionals to complete their project or installation rather than completing the project or installation on their own.
DIFM customers can purchase various installation services in our store, online or at home in the following ways
On-site consultation.
Our installation programs include many categories such as flooring, changing surfaces for cabinets and cabinets, countertops, stoves and central air conditioning systems, and windows.
We believe that the ever-changing demographic structure is increasing demand for our installation services, especially for our \"baby boomers\" customers who may have historically been DIY customers, but now looking for someone to complete a project for them.
We also believe that we focus on professionals who provide services to DIFM customers, which will help us drive higher product sales.
We provide PLCC products through third parties to help our customers finance their projects
Third party credit providers
Our PLCC program includes other benefits, such as 365-
For our professionals, the day return policy along with the commercial fuel rewards and deferred payment terms.
At fiscal2018, about 4 of our clients have been opened.
With 8 million new Home Depot private label credit accounts, the total number of Home Depot active account holders was approximately 16 million at the end of fiscal 2018.
In fiscal2018, PLCC sales accounted for about 23% of net sales.
We strive to deliver an exceptional customer experience by putting our customers first and taking care of our colleagues.
Our customer experience begins with exceptional customer service, and our employees are the key to delivering this experience.
Our goal is to eliminate the complexity and inefficient processes of the store and let our employees focus on our customers.
To this end, in fiscal2018, we continue to invest in freight handling capacity as part of the final goalto-
Ultimately optimize the way products flow from suppliers to our shelves.
Among other benefits, this initiative has improved our online
Shelf availability, while reducing the time for store assistants to locate products in receiving docking stations or overhead storage.
We deployed a new overhead management app on our first phone.
Handheld devices are enabled in fiscal2018, which helps affiliates quickly and accurately locate products stored in overhead storage, save time, improve customer experience, and assist in inventory management.
In addition, we launched a new order management system called \"order Up\" to integrate some of our existing legacy systems into a simple and intuitive user interface, the interface requires minimal training and sells, manages and edits orders.
Through these efforts, our employees can devote more time to their customers and make the experience of working at Home Depot better.
During fiscal2018, we have also strengthened our labor model to better integrate related activities with customer needs, from the model based on the number of transactions to the model related to the specific amount of activity in each store, all the way to the department level.
There is this change in all stores now, which allows us to better distribute the labor force to provide the best servicein-
First-class customer experience.
At the end of 2018 at fiscal, we hired about 413,000 partners, of whom about 29,000 were paid and the rest were compensated hourly or on a temporary basis.
To attract, reward and retain qualified personnel, we seek to maintain competitive wage and wage levels in each market we serve.
We have also developed a number of plans to recognize the store and individual staff who provide exceptional service to our customers.
At fiscal2018, as part of our strategic investment, we have made some investments in our partners, including changes to our welfare plan, to eliminate the waiting period for new employees, and enhanced plans for paid maternity leave and parental leave.
We often measure the satisfaction of our employees, and we believe our relationship is very good.
Connected experience: from store to online, from online to store, our customers are shopping today, and the way we interact with us is different from a few years ago.
As a result, we have taken many steps to provide our customers with a seamless, frictionless connected shopping experience across stores, online, work sites and homes.
We do not regard the customer experience as a specific transaction;
Instead, we believe it contains the whole process of inspiration and knowledge --
How, purchase and fulfill and Mail
Purchase care and support.
From the inspiration point of the purchase trip to providing product knowledge-
How, we are investing in infrastructure and processes to provide them with the most relevant marketing information based on what is important to our customers.
This means adjusting the message to personalize it to the customer, such as displaying the product that completed the project based on what was recently purchased, or highlighting the most relevant products and services based on changing weather conditions.
Customers want more personalized messaging, so we focus on connecting marketing campaigns to online and online marketing campaigns
Store experience, creating a seamless series of contacts across all channels.
Doing this well provides customers with great value, which in turn drives business results.
Our store is at the center of our business and we are investing in improving the customer\'s shopping experience through easier navigation and improved convenience and speed of checkout.
Over the past few years, our colleagues have used our first mobile phones to help speed up the online order checkout process, find products in the aisles and online, and check the inventory at hand.
In fiscal2018, we provide additional self-service for our customershelp tools.
As part of our strategic investment, we have made progress in implementing our pathfinding logo and store update package, almost 1,300 of the U. S.
The stores completed by fiscal by the end of 2018 are ahead of our original plan.
The package includes brand new, more intuitive signage, better lighting and basic store enhancements.
We continue to launch our re-
The front-end area of the design, including the optimized layout of all checkout areas, as well as the expanded and enhanced self-
Checkout options, and add from
There are service lockers in the main entrance, which will facilitate you to pick up online orders.
We continue to invest on our website and mobile applications.
The enhancement of these digital attributes is critical to our increasingly connected customers who study products online and then enter one of our stores to view the products in person or talk to colleagues before purchasing.
We also continue to invest in a better digital navigation experience through the store.
Specific maps that allow customers to precisely locate the exact location of the item on their mobile devices.
In the store, customers can also view ratings and reviews online, compare prices, and view our extended categories and purchase products.
We continue to improve our electronic products during fiscal2018
As discussed above, the goal of the business platform is to drive a more personalized customer experience.
In order to create a better customer experience, we have been expanding the use of technology, including machine learning and data science.
In fiscal2018, we continue to work with our online contact center to enhance our search and mobile features, checkout speed and chat capabilities.
We believe that by connecting our store with online and online stores, we can not only-
Shops, but also online.
In fiscal2018 we see an increase in our online property traffic and an increase in the conversion rate of online sales.
During fiscal2018, sales of our online channels increased by 26%.
We will continue to leverage our physical and digital assets in a seamless and frictionless manner to enhance the terminalto-
End customer experience.
Connect products and services to customer needs. We strive to become the number one retailer of home improvement products by providing product innovation, classification and value and providing a range of home improvement services.
In fiscal2018, we continue to introduce a variety of innovative new products to our DIY and Pro customers, while continuing to focus on delivering daily value in our stores and online.
To improve our sales capabilities, we continue to improve the information technology tools in fiscal2018 to build an connected shopping experience that matches our customer roles, shopping environments and locations;
Make sure we have the best value in the market;
Optimize the variety of our products.
Typical Home Depot stores store about 30,000 to 40,000 items in a year, including national brands and proprietary products.
Our online products complement our store through extended channels, and we offer a wider range of products through our website, including Home Depot. com, blinds.
Com and stores.
Com is an online retailer of textiles and decorative products and we acquired the company later in fiscal 2017 to expand our online decorative category.
We also use our merchandising tools frequently to improve our online assortment of merchandise to balance the choice of extensions and more carefully curated products.
At fiscal2018, we have introduced many innovative and unique products to our customers with attractive value.
Examples of these new products include an optional LED downlight retrofit with Halo color, Behr quick dry oil-
EGO wood finish®Power load technology of 56 v carbon fiber™Anderson Trimmer®Lamps™Telescopic screen, Letai glue®PL®High quality Max building adhesive.
During fiscal2018, we continue to provide value to our customers through a wide range of proprietary and exclusive brands.
Highlights of these products include Husky®Hand tools, tool storage and work table, waterproof gloves, dual beam flashlight, Diamond Tip Screwdriver and 15-in-
1 Screwdriver/nut driver;
Everbilt®Hardware fasteners, plumbing accessories, water pumps, garbage disposal and other products;
Hampton Bay®Lighting, ceiling fans, kitchen cabinets;
Glacier Bay®Bathtub and toilet;
Life Saving®Floor including carpet, carpet with pets®Technical, hard core vinyl board flooring and new non-slip tiles;
Ecological supermarket®Lighting, all
LED glass bulb;
Vigoro®Lawn care products;
Stanley®Hand tools; Troy-
Bildt®Snow throwing outdoor;
And rich. ®And Ryobi. ®Electric tools, featuring Ryobi®40 charging push mower.
We will continue to evaluate our sales department and product line in order to have the opportunity to expand the range of products available in the Home Depot proprietary and exclusive brand portfolio.
We also offer multiple services to our customers.
As mentioned above, we provide some special projects for our professional customers to meet their special needs, and some installation services for our DIY and DIFM customers.
We also offer tool and equipment rentals in more than 1,200 locations in the US. S.
Provide value and convenience for our professional and DIY customers.
Connecting the product to the shelves, the site, and the customer, we build the best-in-
Gain a competitive edge in our information technology and supply chain.
These efforts are designed to ensure that our customers receive products while managing our costs, thus delivering higher returns to our shareholders.
We recognize that customers\' expectations are changing rapidly and that our supply chain needs to respond to the expectations of how, when and where they choose to receive our products and services.
We will continue to improve the production efficiency and connectivity of the entire supply chain platform to achieve the fastest and most efficient delivery capacity in the home improvement field.
We are referring to the process, which includes more than one
As a Home Depot Supply Chain, one year of hard work.
During fiscal2018, we continue to lay the foundation for achieving this goal.
We centrally forecast and supplement more than 98% of our store products through advanced inventory management systems, and use the network of more than 200 distribution centers to meet the needs of our stores and customers.
The network includes several distribution center platforms in the United States. S.
Canada and Mexico are tailored to the product type, location, shipping and delivery requirements to meet the needs of our stores and customers.
These platforms mainly include rapid deployment centers, stocking distribution centers, batch distribution centers and direct fulfillment centers.
As part of our investment in a Home Depot Supply Chain, we will add a number of different fulfillment facilities designed to help us achieve our goal of 90% in the USS.
Provide the same or second day delivery for extended home improvement products, including large items.
These facilities include more direct fulfillment centers and market delivery operations (MDOs), which act as a local hub, integrating freight charges and shipping to customers within the last mile of delivery.
We started pilot these facilities at fiscal2018.
In addition to our distribution center, we also use our funds of nearly $2,000. S.
As an online store that is convenient for customers to choose
Return and delivery of fulfillment locations.
For customers who shop online and want to pick-
Buy or return in our US store or ship from USS.
We have fully implemented our four interrelated retail projects, BOSS, BOPIS, BODFS and BORIS, which we believe provides us with a competitive advantage.
For example, as of the end of 2018 in fiscal, nearly 50% of our USS.
Online orders were received in the store.
We will also continue to focus on developing new features to improve the efficiency and customer experience of our store delivery plans.
For example as of fiscal 2018 the end of we have to American 70% and 40% more than the area launched the truck and car shipping serviceS.
The population, respectively, provides a fast and affordable service to our customers for smaller deliveries.
The key components of our strategy are enabled through our technology portfolio, which consists of a system network that helps us centrally manage customer orders and optimize where they are, to maximize speed, efficiency, and customer experience, when and how we achieve these goals.
During fiscal2018, we continued to improve our customer order management platform (COM) and delivery management system, which greatly improved our ability to sell and execute deliveries from the store.
In an ever-changing retail environment, innovating our business model and value chain, we have to increase our investment to enhance our interconnected customer experience and position our company for the future.
Our customers see us as a Home Depot and expect us to operate in an interconnected, seamless way.
To fully realize a Home Depot experience, we will continue to connect all aspects of our business and take advantage of our scale.
We will also invest in our geographic location, our digital properties, our partners, products and innovations, our professional and DIY customers, our services business and our supply chain.
All these investments are based on our ongoing investment in information technology, which is the backbone of the One Home Depot experience.
We will continue to focus on improving the productivity of the entire business.
This process involves reducing our costs and reinvesting our business to drive higher sales and create what we call a virtuous circle.
Through the development of technology, we promote productivity and speed.
By focusing on eliminating waste in the value chain, improving processes and simplifying systems, we support a cycle of productivity.
This virtuous circle enables us to improve our customer experience, increase our competitive power in the market, increase our sales, and achieve shareholder value.
Our strategy to create a Home Depot experience is driven by our desire to create value for all stakeholders, including our customers, our colleagues, our supplier partners, our services and our shareholders
We are accelerating our investment in our business in strict capital allocation methods.
Our first use of cash has been and will continue to invest in our business, and the use of the rest follows our shareholder return principle: the dividend principle.
Our target is about 55% of the dividend expenditure per share earnings, and the target is to increase the dividend every year.
Principle of return on investment capital.
Our goal is to maintain a high return on investment capital, benchmarking all uses of excess liquidity against the value created for shareholders through share repurchase.
Principle of share repurchase.
After meeting the needs of the business, as long as we create value, we buy back the stock in excess cash.
In fiscal2018, we drive higher returns on investment capital, which allows us to return value to shareholders through $10.
Shares are bought back at $0, $4.
7 billion cash dividends, as described in Item 7, \"Management\'s Discussion and Analysis of the financial position and results of operations.
The competition in our industry is fierce and growing.
As a result, we face competition for products and services from a variety of retailers, suppliers and service providers, from traditional brickand-
Mortar, multi-channel, exclusive online.
There are many other home improvement retailers in every market we serve;
Supply electrical, plumbing and building materials for the premises;
And timber
We also compete with professional design stores, showrooms, discount stores, local, regional and national hardware stores, paint stores, mail order companies, warehouse clubs in some product and service areas, retail companies, home decoration retailers and other retailers also work with home improvement services and tool equipment rental providers.
We\'re all competing.
Store and online sales mainly based on customer experience, price, quality, availability, product classification and delivery options.
About our store, we also compete according to the location and appearance of the store and the display of the goods.
Our customers often shop online using a variety of electronic devices and platforms, read product reviews, and compare prices, products, and delivery options, regardless of where or how they shop.
In addition, online and multi-channel retailers are paying more and more attention to delivery services, and customers are looking for faster, guaranteed delivery times and low
Price or free shipping.
Our ability to be competitive in delivery times and delivery costs depends on many factors, including whether our investment in a Home Depot Supply chain has been successful.
Table 5 content sustainable development efforts Home Depot is committed to sustainable business practices-from the products we provide to our customers, to the environmental impact of our operations, to our procurement activities, for our participation in the community where we do business.
We believe that these efforts continue to be successful in creating value for our customers, shareholders and communities.
Environmental protection products and projects.
We offer more and more eco-friendly products that support sustainability and help our customers save energy, water and money.
Through our ecological choices®Launched in 2007, we help our customers identify products that meet energy efficiency, water conservation, healthy homes, clean air and sustainable forestry norms more easily.
By the end of fiscal 2018, our ecological choice®The project includes more than 20,000 products.
Through this project, we are selling Energy Star. ®Certified appliances, LED bulbs, tank-free water heaters and other products enable our customers to save on electricity charges.
We estimate that in fiscal2018 we have helped customers save more than $1.
By selling energy, the cost of electricity is 2 billion. Save products.
We also estimate that by selling our WaterSense, our customers save more than 59 billion gallons of water, thus saving more than $0. 655 billion in water costs at fiscal2018®-
Bathtub faucet with label, shower head, hair dryer, toilet and irrigation controller.
In 2017, we announced our customer energy, greenhouse gas emissions and water targets by selling energy star®And water®Products.
We are committed to providing innovative products that, through proper use, will help customers in North America reduce their electricity bills by more than $2. 8 billion;
20 million metric tons of greenhouse gas emissions;
By 2020, the water consumption was 250 billion gallons.
We have also updated our timber procurement policy to require FSC certification for timber products from the Amazon basin, the Congo Basin, Papua New Guinea and the Solomon Islands.
The 20 18 responsibility report provided on our website describes many of our other eco-friendly preferred products that promote energy efficiency, water saving, clean air and healthy homes.
We continue to offer store recycling programs in the USS. For example, in-
Store CFL bulb recycling program launched in 2008.
This service is available to customers free of charge and is available in all parts of the United States. S. stores.
We kept it.
Storage rechargeable battery recovery plan.
The project was launched in 2001 and is currently completed in partnership with call2cycle, which is also available free of charge to customers in all regions of the United StatesS. stores.
Through our recycling program, in fiscal2018 we helped recycle more than 888,000 pounds CFL bulbs and more than 1 million lb rechargeable batteries.
Since the launch of the project, we have helped recycle the 10 million lb rechargeable battery.
In fiscal2018, We also recycle more than 230,000 lead-acid batteries collected from customers under our lead-acid battery exchange program, as well as more than 247,000 tons of cardboard through the US National cardboard recycling programS. operations.
We believe in our environmental protection.
The preferred product selection and our recycling efforts drive sales, which in turn benefits our shareholders, as well as our customers, the communities in which we work and live, and the environment.
Commitment to sustainable development and business responsible for the environment.
Home Depot also focuses on sustainable operations and is committed to doing business in an environment-responsible manner.
This commitment affects all areas of our operations, including energy use, supply chain and packaging, and store building and maintenance.
In 2015, we announced two major sustainable development commitments for 2020.
Our first goal is to reduce the United States. S.
20% of the energy use of the store is at 2010 level, and our second goal is to prepare and purchase, 1. 35 million MW of energy per year for our store through renewable and alternative sources of energy, such as wind, solar and fuel cell technologies.
As of the end of 2018 at fiscal, we have 45 stores with solar roof power and more than 202 fuel cell systems in operation or development, this makes it possible for us to surpass our two goals by the end of 2020.
In 2018, based on our annual CDP report (Discussed below)
Commitment to a 2.
Carbon emissions are reduced by 1% per year.
Our goal is to achieve 39.
By 2030, it was reduced by 9% per cent and by 50 per cent.
A decrease of 4% by 2035.
We are committed to the implementation of strict operating standards to establish energy-efficient operations in all regions of the United StatesS.
Facilities and continued investment in renewable and alternative sources of energy.
In addition, we implemented a rainwater recycling project in our store in 2010.
As of the end of 2018 at fiscal, 148 of our stores used recycling tanks to collect rainwater and condensate from the roof of the HVAC unit and garden center, which in turn became accustomed to watering plants in the garden center outside US.
Our 2018 responsibility report uses the Global Reporting Initiative or the GRI sustainable development reporting framework to provide more information on sustainable development efforts in other areas of our operations.
Rewards and recognition.
Our commitment to the sustainable development of the enterprise has received many environmental awards and recognition.
From 2008 to 2017, we received 21 important awards from three EPA projects.
Energy Star many times over the years®The department named us \"annual retail partner-continuous excellence\" 6 content sheets for overall excellence in energy efficiency, and we gained a sense of water®Our overall excellence in water efficiency continues to be outstanding.
We also received the EPA\'s \"SmartWay Excellence Award\", which recognizes Home Depot as an industry leader in environmental performance and energy efficiency in the freight supply chain.
We are involved in the CDP reporting process.
CDP is an independent, internationalfor-
Profitable organizations provide enterprises and cities with a global system to measure, disclose, manage and share environmental information.
In January 2019, we received a score from CDP, reflecting a high level of action in climate change mitigation, adaptation and transparency.
We were also named industry leaders by CDP.
Procurement and quality assurance we maintain our global sourcing plan to achieve high
Quality and innovative products directly from manufacturers around the world.
In addition to our US, during fiscal2018S.
We have sourcing offices in Mexico, Canada, China, India, Southeast Asia and Europe.
Our suppliers are contractually obliged to ensure that their products comply with applicable international, federal, state and local laws.
All of our suppliers and service providers must comply with our responsible procurement standards, which cover various expectations in multiple areas of social compliance, including transparency in the supply chain, sources of supply, child labor and forced labor
In addition, we have quality assurance and engineering resources and are committed to setting standards and overseeing compliance with safety, quality and performance standards for our proprietary brand products.
We have also developed a global responsible procurement plan to ensure that suppliers adhere to high standards of social and environmental responsibility.
The Our2018 responsible for procurement report provided on our website provides more information about this project.
We are committed to maintaining a safe shopping and working environment for our customers and colleagues.
Our EH & S function is committed to ensuring the health and safety of our customers and employees, as well as trained employees who evaluate, develop, implement and implement company policies, processes and plans --wide basis.
Our EH & S policy is integrated into our daily operations and is part of the Home Depot culture.
Some common program elements include: Daily store check list (by department); routine follow-
Audit of our store
Operate site teams based on security team members and regional, regional and store;
Equipment enhancement and preventive maintenance programs that promote physical safety;
Department Sales safety standards;
Provide training and education programs for all employees, and provide different levels of training according to the role and responsibility of employees;
Designed to raise awareness of operations and awareness of understanding of EH & S issues, communication and recognition programs.
Intellectual property your business has one of the most famous brands in North America.
Therefore, we believe that Home Depot®Trademark has important value and is an important factor in our product marketing.
Business, store and business.
We have registered or applied for registered trademarks, service trademarks, copyrights and Internet domain names for our business, including our ever-expanding proprietary brands such as HDX®Husky®Hampton Bay hotels®Home decoration collection®Glacier Bay®And Vigoro. ®.
We also retain a patent portfolio related to some of our products and services and seek patents or otherwise protect the innovations we incorporate into our product or business operations.
Your business is affected by the season.
Generally speaking, our highest sales volume occurs in our second fiscal quarter, and the lowest sales volume occurs in our first or fourth fiscal quarter.
Our Internet website is www. homedepot. com.
We provide our annual report to shareholders, Annual Report on Form10 free of charge in the Investor Relations section of our website
Quarterly Report on Form10
Q: Latest report on Form8
K, agency statements and Forms3, 4 and 5, as well as amendments to such reports as soon as reasonably practicable after submitting such documents to SEC or providing such documents to SEC
We include our website address in this report for reference only.
The information contained on our website is not included in this report by reference.
7 ContentsOther financial information sheet for information on key financial highlights (including historical income, profits and total assets) See \"selected financial data\" on the F-page\"
This report 1 and Item 7 \"Management Discussion and Analysis of the financial position and results of operations \". \"Item1A. Risk Factors.
There are many risks and uncertainties facing our business, operational results and financial situation.
With respect to any investment decision of our securities, you should carefully consider the following risk factors, as well as other information contained in this report and other documents we submit to SEC.
Additional risks and uncertainties that we do not currently know or that we currently consider irrelevant may also harm our business operations.
In the event of these risks, our business, results of operations, financial position and future prospects may be negatively affected, which in turn affects the trading value of our securities.
You should read these risk factors in conjunction with the \"Management\'s Discussion and Analysis of Financial Position and operational results\" in Item 7 and the consolidated financial statements and associated notes in Item 8.
Intense competition may adversely affect the price and demand of our products and services and may reduce our market share.
The competition in our industry is fierce and growing.
As a result, we face competition for products and services from a variety of retailers, suppliers and service providers, from traditional brickand-
Mortar, multi-channel, exclusive online.
The Internet promotes the entry of competition, transparency of prices and comparison shopping, and improves the level of competition we face.
There are many other home improvement retailers in every market we serve;
Supply electrical, plumbing and building materials for the premises;
And timber
We also compete with professional design stores, showrooms, discount stores, local, regional and national hardware stores, paint stores, mail order companies, warehouse clubs in some product and service areas, retail companies, home decoration retailers and other retailers also work with home improvement services and tool equipment rental providers.
We\'re all competing.
Store and online sales mainly based on customer experience, price, quality, availability, product classification and delivery options.
About our store, we also compete according to the location and appearance of the store and the display of the goods.
Our customers often shop online using a variety of electronic devices and platforms, read product reviews, and compare prices, products, and delivery options, regardless of where or how they shop.
In addition, online and multi-channel retailers are paying more and more attention to delivery services, and customers are looking for faster, guaranteed delivery times and low
Price or free shipping.
Our ability to be competitive in delivery times and delivery costs depends on many factors, including whether our investment in a Home Depot Supply chain has been successful, we fail to manage these factors successfully and provide competitive delivery options, which may have a negative impact on our product needs and margins.
We use our marketing, advertising and promotion programs to drive customer traffic and compete more effectively, and we have to evaluate and adapt our efforts on a regular basis to respond to changes in the competitive environment.
Intense competitive pressures from one or more of our competitors, such as through aggressive promotional pricing or clearing campaigns, or we are unable to adapt effectively and quickly to changing competitive environments, it may adversely affect our price, profit or demand for our products and services.
If we are not able to respond to these competitive pressures in a timely and appropriate manner, including by providing an exceptional customer experience or maintaining an effective marketing, advertising or promotional program, our market share and financial performance may be adversely affected.
We may not be able to identify or effectively respond to the needs, expectations or trends of consumers in a timely manner, which may adversely affect our relationship with our customers, our reputation, our needs for products and services, and our market share.
The success of our business depends to a certain extent on our ability to identify and respond quickly to changing demographic trends;
Consumer preferences, expectations and needs;
And unexpected weather conditions or natural disasters while also managing the appropriate inventory levels in our store, distribution or fulfillment center and maintaining a good customer experience.
It is difficult for us to successfully predict the product and service needs of our customers.
In addition, each of our major customer groups has different needs and expectations, many of which change with demographic changes for specific customer groups.
We also need to provide a more localized assortment of goods to attract the local culture and demographic taste of each customer base.
If we fail to successfully separate the shopping experience area to meet the individual needs and expectations within the customer base or customer base, we may lose the market share of these customers.
The contentscauer expectation sheet about the way they buy and receive products or services has also become increasingly demanding.
As mentioned above, customers often use technology and various electronic devices and platforms to quickly compare products and prices and determine the real
Product delivery time and purchase time.
Once a product has been purchased, the customer is looking for an alternative to delivering these products and they usually expect to be fast, timely and low
Price or free shipping.
We must constantly anticipate and adapt to these changes in the procurement process.
We have our boss, BOPIS, BODFS and direct fulfillment delivery options, however, we cannot guarantee that these or future projects will be successfully maintained and implemented, nor can we guarantee that we can meet customer expectations in terms of delivery time, options and costs.
Customers are also using social media to provide feedback and information about our company, products and services in a fast and widespread way.
To some extent, customers have a negative experience and share it through social media, which may affect our brand and reputation.
In addition, we have an aging store base that requires maintenance, investment and space redistribution programs to provide the shopping experience customers want.
Our investment in the store may not provide the relevant shopping experience that customers expect.
We also have to maintain a safe store environment for our customers and colleagues and prevent inventory from being lost or stolen (
Also called \"shrink \").
Failed to improve and maintain our store, failed to make effective use of our store space, failed to provide a safe shopping environment;
Provide compelling online services;
Identify or respond to changing consumer preferences, expectations and home improvement needs in a timely manner and maintain appropriate inventory;
Fast and low
Choose price or free shipping;
Provide differentiated customer experience to our major customer base;
In order to effectively implement increasingly localized commodity classification, it may adversely affect our relationship with our customers, our reputation, the demand for our products and services, and our market share.
The implementation of our stores, interconnected retail, supply chain and technology initiatives may disrupt our operations in the short term, which may not bring the expected benefits or fail.
We are investing significantly to create a Home Depot experience, including investing heavily in building a Home Depot Supply chain over the next few years.
These programs are designed to simplify our operations and enable our employees to continue to provide high
Provide quality service to customers;
Simplify customer interaction;
Provide customers with a more interconnected retail experience;
Create the fastest and most efficient distribution network for home improvement products.
Failure to choose the right investments and implement them in the right way and at the right pace can disrupt our operations.
The \"One Home Depot\" program requires a significant investment in our operations and systems and the development and execution of new processes, systems and support.
If we are unable to effectively manage the volume and nature of these changes, our business operations and financial results may be materially adversely affected.
Cost and potential issues related to the implementation of these plans, design defects and interruptions, including issues related to the management of the third plan
Third-party service providers utilizing the new network
Based on tools and services, implementing new technologies, implementing and restructuring support systems and processes, and addressing the impact on inventory levels, may disrupt or reduce our operational efficiency in the short term, lead to product availability issues and impact profitability.
In addition, the completion of these initiatives requires significant investment in more information technology personnel and other specialized personnel.
In the market of these resources, we may face great competition and may not succeed in our recruitment work.
In addition, our store and connected retail programs, a Home Depot Supply Chain, and new or upgraded information technology systems may not be able to provide the expected benefits, it may take longer than expected to achieve the desired benefits, or these initiatives may fail completely, all of which may adversely affect our competitive position, financial position, operating results or cash flow.
Our success depends on our ability to attract, develop and retain highly qualified employees while controlling labor costs.
Our customers expect our employees to provide a high level of customer service and product knowledge.
In order to meet the needs and expectations of our customers, we must attract, develop and retain a large number of high-quality employees while controlling labor costs.
Our ability to control labor costs is affected by many external factors, including current wage rates, health and other insurance costs, as well as the impact of legislation or regulations governing labor relations, minimum wages, and medical benefits.
In addition, in order to support our strategic initiatives, including a Home Depot Supply Chain, as well as the relevant technical investments needed to implement strategic investments, we must attract and retain a large number of skilled professionals, including technical professionals.
The market competition for these professionals is increasingly fierce.
Failure to provide competitive wages and/or benefits in the markets we operate may adversely affect our ability to retain and attract employees.
In addition, changes in market pay can have an adverse effect on our labor costs.
In addition, we compete with other retail businesses to provide hourly jobs to many of our employees, and we invest a lot of resources to train and motivate them to maintain a high level of job satisfaction.
The historically high turnover rate of these positions can lead to an increase in training and retention costs, especially in the highly competitive labor market.
We cannot guarantee to attract or retain highly qualified employees in the future.
Failure of critical information technology systems or processes may adversely affect our business.
We rely extensively on information technology systems, some of which are managed or provided by third parties.
Analyze, process, store, manage and protect transactions and data.
When managing our business, we also rely heavily on the integrity, security and consistency of these operational and financial data for information such as sales, customer data, ordering of goods, etc, stock replenishment and order fulfillment.
In order for these information technology systems and processes to operate effectively, we or our service providers must maintain and update these systems and processes.
Our system and the third
The party system we interact with will be damaged or interrupted by multiple reasons, including power outages;
Computer and telecom failures;
Computer virus;
Security vulnerability; cyber-
Attacks, including attacks using malicious code, worms, phishing and denial of service, and ransomware;
Catastrophic events such as fires, floods, earthquakes, tornadoes or hurricanes;
Acts of war or terrorism;
And errors in the design or use of our colleagues, contractors or third parties
Third-party service providers.
Although we and our third
Third-party service providers seek to effectively maintain our respective systems and successfully address the risk of damage to the integrity, security and consistency operations of these systems, an effort that may not be successful.
Therefore, we or our service providers may encounter errors, interruptions, delays, or service interruptions in critical parts of our information technology infrastructure, which may seriously interfere with our operations, cost time and resources
Centralized treatment.
Interruption of our customers
Facing a technology system can compromise our interconnected retail strategy and bring a negative customer experience.
Through our information technology system, we are able to provide a better overall shopping and connected retail experience, enabling our customers to shop and interact with us from a variety of electronic devices and platforms.
We use our digital platform as a sales channel for our products and also as a way to provide inspiration for our customers, as well as products, projects and other relevant information to drive sales, whether they happen or not-Shop or online.
We have multiple online communities and knowledge centers that allow us to inform, help and interact with our customers.
The retail industry is evolving and expanding, and we must respond effectively to new developments and changing customer preferences for an interconnected experience.
We are constantly looking to improve all of our online properties to provide an attractive, user-
Provide a friendly interface for our customers.
Interruptions, failures or other performance issues for these customers-
Facing a technical system can harm the benefits they provide to our business and have a negative impact on our relationship with our customers.
Disruption in our supply chain and other factors that affect the distribution of goods may adversely affect our business.
Disruption of our logistics or supply chain network may adversely affect our ability to deliver our inventory in a timely manner, which may compromise our ability to meet customer product needs and lead to loss of sales, increase supply chain costs or damage our reputation.
This interruption may be caused by damage or damage to our distribution center; weather-related events;
Natural disasters;
Changes or restrictions in trade policies;
Customs or importrelated taxes; third-
Party strike, lock
Stop work, stop work or stop work;
Capacity restrictions; third-
Contract disputes;
Interruption or cost of supply or transportation;
Military conflict;
Acts of terrorism;
Or other factors beyond our control.
Any such interference may have a negative impact on our financial performance or financial situation.
If our efforts to maintain the privacy and security of our customers, colleagues, suppliers and company information have not been successful, we may incur significant costs and reputational damage and may be subject to litigation and enforcement actions
Like most retailers, our business involves the receipt, storage, management and transmission of customer personal information, preferences and payment card information, as well as other confidential information, for example, personal information about our colleagues and suppliers and confidential company information.
We also work with the third person.
Party service providers and suppliers that provide the technology, systems and services we use when receiving, storing and transmitting this information.
Our information system and our third information system
Third-party service providers and suppliers are vulnerable to the increasing threat of evolving data 10 table content protection and network security risks.
Unauthorized parties have gained access in the past and will continue to try to gain access to these systems or our information through fraud or other ways that deceive our colleagues, third-
A third-party service provider or supplier.
Hardware, software or applications that we develop or obtain from third parties may contain design or manufacturing defects or other issues that may accidentally compromise information security.
Methods used to obtain unauthorized access, disable or downgrade services or disrupt systems are also changing and evolving and may be difficult to predict or detect for a long time.
We have implemented and regularly reviewed and updated our systems, processes and procedures to prevent unauthorized access to or use of data and to prevent data loss.
However, forever
The threat of continuous development means that we and our third
Third party service providers and suppliers must constantly evaluate and adapt our respective systems and processes and the overall security environment of any company we acquire.
There is no guarantee that these measures are sufficient to prevent all data security breaches, system compromises or misuse of data.
As we experienced in the data breaches we found in the third quarter of fiscal 2014, our data security, whether external or internal, or misuse of customers, associations, supplier or company data may result in significant costs, including costs of investigation and remediation, as well as loss of sales, fines, litigation and damage to our reputation.
In addition, the regulatory environment related to data privacy and cybersecurity is constantly changing, new and increasingly stringent requirements applicable to our business, and the implementation of these requirements becomes more complex.
Maintaining our compliance with these re
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