“We are first and foremost a retail business, and our 2007 plans reflect that,” said CEO Frank Blake.
The company cut experienced workers and hired unskilled employees under former CEO Robert Nardelli’s watch, for which the company was severely criticized. Now, Home Depot said it will spend $360 million this year to simplify its staffing model, hire skilled tradesmen, redesign its compensation and reward plans, and enhance in-store computers for customer assistance.
“As construction demand slows, we see an opportunity to hire from the trades,” said Paul Raines, Home Depot’s regional president, according to MarketWatch.com. “We think it’s a powerful, powerful weapon for us.”
Courting the skilled trades to put on orange aprons will include massive job-hiring forums in 91 cities and through partnerships with social organizations.
Home Depot intends to open 115 new stores this year. Capital expenditures will increase 29 percent to $4.5 billion, focusing on new stores and retail reinvestment.
The company is also committed to be the “No. 1 destination for pro customers, primarily repair and remodel professionals.” To help achieve that goal, it expects to spend $415 million on programs such as loyalty programs, a pro bid room to handle large customer orders with volume discounts, direct-ship programs, credit programs and other specialty sales initiatives. Regarding HD Supply, it is expected to contribute 15 percent of total sales this year, compared with last year’s 13 percent. According to MarketWatch.com, CFO Carol Tome said that, if the division was sold, proceeds would go back to shareholders.
2007 Outlook: Home Depot told investors that company earnings per share are expected to drop by 4 percent to 9 percent for fiscal year 2007. Chairman and CEO Frank Blake stated that the company does not expect residential construction and the housing market to improve until late in the second half of 2007 or early 2008.
The company also expects same-store sales to drop in the mid-single-digit area.
- Kelly Faloon