Atlanta, GA, Jun. 2--Home Depot Inc. chief executive Bob Nardelli admits the company's image has had its highs and lows, and says both are probably unjustified.
"The company probably was never as good as was perceived and it sure in the hell is not as bad as it is perceived today," Nardelli told The Associated Press in an exclusive interview Wednesday.
But Nardelli said his strategy is working and he isn't about to change course.
"Look at the data," Nardelli said. "We are gaining share. Our earnings were two times our nearest competitor in the first quarter...Just go down the list, and you'll say, 'Gee, I think they're doing pretty good.'"
Is the Atlanta-based company beating rival Lowe's? "You draw that opinion," Nardelli responded.
In the numbers game, the States' largest home improvement store chain is winning. It reported a 21% jump in profit to $1.1 billion in the period ending May 2, compared with an 8% increase to $455 million for North Carolina based Lowe's Companies Inc.
But in the image game, Home Depot has been lagging. Since Nardelli joined the company as chairman and chief executive in 2000, Home Depot's stock price has fallen more than 12%. Lowe's stock price has risen more than 33% during the same period.
On Wednesday, Banc of America Securities' Aram Rubinson lowered his rating for Home Depot from buy to neutral, citing the effect a slowdown in sales in the housing market could have on the company's revenue.
Nardelli said he is unfazed.
"Look, the dot-com companies had a lot of image. They had a lot of 'p' and no 'e,'" he said, referring to stock price and earnings. "And I would have thought that Wall Street would have learned from being burned with that. So, what I'm looking for is bricks and clicks."
Nardelli said the 1,740-store chain's program to make its stores cleaner and brighter and increase the number of its locations will continue. Acknowledging persistent concerns about customer service, he said Home Depot has work to do in that area but he believes it is improving.
"I'm not going to come off strategy to try and influence a quarterly stock price," Nardelli said. "I believe we're going to stay the course and over time the market is going to recognize that."
He added, "At some point, I think there is going to be that awakening."
During the interview, Nardelli also was asked about his successes, challenges and his future.
He said he is proud of the financial success of the company and its effort to modernize its stores. He said his greatest challenge is being able to convey that to the public in a way that it gets more reception.
"I'm not looking for a pat on the back," Nardelli said. "Quite honestly, I'm looking for fair evaluation of this company."
As for his future, Nardelli, who took over Home Depot after not getting the top job at General Electric, said that, like his strategy, he is staying the course.
"This is what you train for and to have this laboratory, if you will, and this company, where else would you go?" Nardelli said. "We own orange. We own home improvement."
Asked whether he has had thoughts of leaving the company, Nardelli insisted he hasn't.
"I've got no plans to go anywhere," he said. "Period. Period. Full-stop."
