Atlanta, GA, January 19, 2006--Home Depot today unveiled its growth targets for 2010 at its annual meeting with the investment community.
Over the next five years, the company expects to maintain and grow its leadership position in home improvement retail worldwide. At the same time, it expects to become the nation's largest diversified wholesale distributor, become number one in services and dramatically increase its direct-to-consumer channels.
The company said it expects to achieve this vision through targeted annual sales growth of nine to 12 percent, driven by 400-500 new store openings over the next five years, and by significant growth in its services business and Home Depot Supply.
"In 2000, we established our strategic platform from which to grow The Home Depot, and we've been successful in growing the business by 76 percent to over $81 billion since then," said Bob Nardelli, chairman, president & CEO. "We expect to achieve our 2010 goals by staying on strategy to enhance our core with innovative merchandise and new categories; to extend the business through new stores, new formats, services and channels; and to expand the market into new areas and geographies."
Fueling the company's 2010 vision is the continued development of its multiple platforms for growth, designed to take advantage of a nearly trillion-dollar market opportunity:
- $200 billion U.S. do-it-yourself market
- $110 billion services market (representing the labor component)
- More than $250 billion international do-it-yourself market
- More than $410 billion professional market
Over the next five years, the company expects to open 400-500 new retail stores, adding 40-55 million new square feet. The Home Depot will continue to roll out distinctive and innovative new products to create a compelling value proposition for consumers.
The increasing do-it-for-me trend continues to drive double-digit growth in The Home Depot's services business. By 2010, the company expects that five to six percent of its sales will come from services, a $110 billion market opportunity. Today the company offers 25 national service programs through its At-Home Services division, including flooring, fencing, roofing, cabinetry and a host of other interior and exterior services.
While still a small percentage of The Home Depot's total revenue, the company's direct-to-consumer channels, through homedepot.com and new up-scale catalogs like 10 Crescent Lane and Paces Trading Company, are generating impressive results. Online sales have doubled in 2005, with more than three million shoppers visiting the company's online properties each week. The Home Depot believes that its direct-to-consumer division has the potential to be a billion-dollar business by 2010.
In addition to maintaining and growing its leadership position in the home improvement retail market, The Home Depot will continue its focus on the professional market, an opportunity estimated at more than $410 billion. By 2010, the company expects that Home Depot Supply will generate 18 to 19 percent of overall sales. By the end of the decade, Home Depot Supply expects to operate more than 1,500 locations, covering all 50 states, and will be the largest diversified wholesale distribution business in the United States.
"We are poised for dramatic growth over the next five years across our business," said Nardelli. "Our planned acquisition of Hughes Supply is a great example of how we are rapidly replicating in the professional market the same type of transformation that we brought to the home improvement retail market."
For 2006, prior to the Hughes Supply acquisition announcement, sales growth is projected at nine to 12 percent and EPS growth of ten to 14 percent, which is aligned with the company's 2010 growth targets. It is assumed that the Hughes Supply acquisition will close near the end of the first quarter or at the beginning of the second quarter.
