Atlanta, April 22—Home Depot’s fiscal year 2002 net sales rose 8.8% over 2001 to $58.2 billion from $53.6 billion. This increase was attributable to the 203 new stores opened during fiscal 2002 and full year sales from the 204 new stores opened during fiscal 2001. The increase was partially offset by the net sales of $880 million attributable to the additional week in fiscal 2001.
According to the firm, comparable store-for-store sales were flat in fiscal 2002, reflecting a number of internal and external factors, including some inventory out-of-stock positions as the firm transitioned through its new in store Service Performance Improvement ("SPI") initiative, in which its stores handle and receive inventory at night. In addition, comparable store-for-store sales were negatively impacted by the level of merchandise resets implemented throughout the year, which disrupted in-store service and had a negative impact on customers' experience in Home Depot stores.
In order to meet customer service objectives, Home Depot strategically opens stores near market areas served by existing strong performing stores to enhance service levels, gain incremental sales and increase market penetration. As of the end of fiscal 2002, certain new stores cannibalized 21% of existing stores and Home Depot estimates that store cannibalization reduced total comparable store-for-store sales by approximately 4%, or about the same percentage as in 2001.
During fiscal 2002, Home Depot continued implementing or expanding a number of in-store initiatives to increase customer loyalty and operating efficiencies. The professional business customer ("Pro") initiative adds programs to its stores to enhance service levels to the Pro customer base. As of the end of fiscal 2002, the Pro initiative was in 1,135 stores or 74% of total stores, compared to 535 stores or 40% of total stores as of the end of fiscal 2001. This initiative is still in its early stages as approximately half of the stores implemented the Pro initiative in fiscal 2002. The firm expects to add the Pro initiative to an additional 204 stores by the end of fiscal 2003 and anticipates, as the Pro initiative matures within the stores in which it has been implemented, generating improvements in operating performance.
Home Depot also continued to implement its Designplace initiative. This initiative offers an enhanced shopping experience to design and decor customers by providing personalized service from specially-trained associates and an enhanced merchandise selection in an attractive setting. The Designplace initiative was in 873 or 57% of Home Depot stores as of the end of fiscal 2002, compared to 205 or 15% of stores as of the end of fiscal 2001. The firm expects to add the Designplace initiative to an additional 556 stores by the end of fiscal 2003.
At the end of fiscal 2002, Home Depot was operating 1,532 stores in total, which included 1,370 Home Depot stores, 52 Expo Design Center stores, five Home Depot Supply stores, three Home Depot Landscape Supply stores and one Home Depot Floor Store in the United States; 89 Home Depot stores in Canada and 12 Home Depot stores in Mexico.
