The Home Depot Co. (NYSE: HD) is quickly putting to work the $5 billion of cash it raised through a debt offering. Its board has authorized the immediate repurchase of $3 billion of stock through an accelerated share repurchase agreement.Home Depot has repurchased $6.7 billion of stock, or 173 million shares, this year. Since 2002, it has purchased more than 450 million, or roughly 19%, of outstanding shares.
Taking into account the $5 billion the company recently raised, it will have about $12 billion of debt on its balance sheet. Home Depot is expected to generate about $11 billion in EBITDA, so annual EBITDA covers total balance sheet debt roughly about 1x -- a tremendously conservative capital structure.
Investors need to hear evidence that the worst is over in same-stores sales decline. The most recent figures were simply awful. When better sales figures are announced, Home Depot stock should soar.











Reader Comments (Page 1 of 1)
12-15-2006 @ 10:57PM
daniel said...
carpenter 35yrs when i have to purchace from big box stores preferr lowes to home depot. as a rule contractors preferr local contractor lumber yards big box inroads into local contractor lumber yards are insignificant according to my personal observation.
12-15-2006 @ 10:13AM
Dean Dickinson said...
HD stores are a disaster waiting to happen. Service ranges from non-existent to incompetent. Menard's and Lowes have both reset their stores making them more costumer friendly...HD is a jungle and more often than not almost devoid of folks willing to spend money. SHORT is the play on HD.
12-15-2006 @ 10:30AM
Claude said...
Going to a Home Depot store can quickly eliminate any enthusiasm for Home Depot stock. The store closest to me is dreadfully dirty and disorganized. There are no employees around except at the cash registers. And why does the merchandise always look like it was kicked or punched before it was put on the shelf?
12-15-2006 @ 11:13AM
CATHY GAMACHE said...
AS A FORMER HD EMPLOYEE, I AGREE THE STORES ARE A DISATER. IF YOU THINK IT'S DIFFICULT TO SHOP IN ONE IMAGINE HOW IT IS TO WORK IN ONE. UNDER-STAFFED, OVER WORKED, AND OFTEN VERBALLY ABUSED BY THE CUSTOMERS. RAISES ARE MINISCULE. SCHEDULES ARE ERATIC. I HAVEN'T SET FOOT IN ONE SINCE I LEFT, AND HAVE NOW GONE BACK TO SHOPPING THE LOCAL STORES WERE I CAN SPEAK TO SOME ONE PLEASANT. I ALSO WORK IN A LOCAL FLOORING CO. AND OFTEN HEAR THE HD NIGHTMARES
12-15-2006 @ 11:16AM
Shirley said...
I agree with Claude. Home Depot is going down hill.
Too, I had a cart run into my leg, and complained. Didn't get anywhere, that was in April, and it's still not healed. People saw me when it happened, I was bleeding to the sock.. So looked for a Mgr, and asked him to come see what happened? He told me NO?
One of the workers got me some gauze and tape, to stop the bleeding, and they said due to my not going to a Dr. Tough. I just wanted to get home and take care of it. My fault, but then I've never been in a position like that.. Hurt so bad, I didn't think to go anywhere else..... Still hurts, big ugly sore there, and red all around it, I've tried everything, even what my Dr. told me to use. Nothing. Do have an appt wih my Dermo soon, so maybe he can tell me???
As he saw it not too long after it happened. What more could I have done?
Shirl 12/14/06
12-15-2006 @ 12:07PM
Norma B. said...
as a stock holder i am very distressed that home depot is not spending some of their billions on improving the stores. i have 3 within my shopping area vs. 1 lowes. this week i drove the extra miles to the lowes which was clean, organized and had an employee who approached me offering help within minutes of entering. another employee was immediately available to help me load my van.
by contrast about 3 weeks ago i purchased an item that required delivery. i took the invoice to the self checkout and spent the next hour trying to complete my purchase. the machine swallowed my cash and then refused to print a receipt. an employee retrieved my money, moved to the next self check out terminal and the same thing happened. i was in the store until 20 minutes after closing in order to get my receipt. not a good experience.
WAKE UP HOME DEPOT! YOUR PROBLEMS NEED FIXING AND BUYING BACK STOCK IS NOT THE ANSWER.
12-15-2006 @ 12:34PM
MIKE CARR said...
AS A FORMER EMPLOYEE I ENJOYED WORKING AT HOME DEPOT.. THATS WHEN BERNIE AND ART RAN THE SHOW.. CUSTOMER SERVICE WAS NUMBER 1.. IF YOU DIDNT HAVE A CUSTOMER YOU WALK THE STORE TO YOU FOUND ONE TO HELP..BACK THEN EVERYBODY KNEW WHAT THEY WERE DOING, IF NOT THEY WOULD BRING THE CUSTOMER TO ONE OF ARTHURS ARMY.. HE OR SHE WAS THE PERSON IN THAT DEPARTMENT THAT KNEW ABOUT EVERTHING , WHEN I GO NOW I STILL FELL BAD FOR THE CUSTOMERS BECAUSE THERE IS NO ONE AROUND TO HELP THEM I STILL DO..LOL THAT WAS THE TRAINING WE GET BACK THEN..NOW TOO BAD LOOKS LIKE WAL MART THEY HAVE MORE PEOPLE TO HELP YOU // PRETTY SAD STILL A STOCK HOLDER MIKE
12-15-2006 @ 11:01PM
r. noonan said...
I am always amused by the number of posters who seem to make a full-time job of bashing HD on AOL related boards. It's always the same theme: 1) It was better with Art and Bernie 2) The stores are understaffed and dirty 3) Lowe's is sooooo much better, and 4) the company is going to hell in a hand basket. I see this as a typical disgruntled employee scenario, whereby the company was being mismanaged for years, and when someone finally came in and put things right, it forced long-time employees to actually do a day's work for a day's pay. The undeniable truth is that HD was falling apart at the seams when current executive management took over. Since that time, revenues and profits have doubled. Understaffed and dirty? Certainly not where I live. The Home Depot's here are nice stores, and if they get a little gritty at times, it is because the number of customers who flow through them in a day is about 5x what I see in Lowe's. It's not hard to keep a place clean when the only shoppers are soccer mom's looking for "window treatments". For those who disagree, all I can say is WATCH AND LEARN. HD is being operated for the benefit of its owners, as it should be. And it is the owners/shareholders who will be enriched while the cry-babies throw tantrums about a past that is long gone.
12-16-2006 @ 12:25PM
L Levine said...
As a 7 year former employee of HD and a customer and rep for over 25 years, The changes that Nardelli has brought is a crime. There were thousands of caring, knowledgeable, and loyal employees in the stores, but for the sake of improving the bottom line most are gone. Now as a fulltime contractor, I find it near impossible to find ANYONE compentent in the stores (5) in my area. As I remember through splits and increases in stock value, thousands became wealthy under Bernie and Arthur....They are truely to flame for the changes..Sorry you guys didnt care better for the child you brought into this world.
12-16-2006 @ 6:49PM
Glenn Shannon said...
Home depot did go downhill for a while until lowe's started to pull customers away from them. Here in arizona they finally air conditioned their stores and started to clean them up. Lowe's when first open did have lots of employees willing to help but can see now that they have greatly reduced that number. Also in areas like tile and carpet which takes a long time per customer is very understaffed. Lowe's prices on most things are still higher than home depost and building my own house have made a lot of purchases.
Tried to buy tile at lowe's and because most are special order had to wait. First time orders short, 2nd time several broken, third time finally give up as was tired of driving to their stores. You also have to wait for them to bring up tile and of course that area is where they are short of employees. Waited 1 hr. first time down to 35 minutes 2nd time, third time called ahead an hour. Bottom line is both have a long way to go
Bottom line is both have a long way to go to be customer friendly.
12-18-2006 @ 11:17AM
Jim said...
R. Noonan, your comments on a comapany focusing only on what is good for the owners is what's wrong with this country today. Pursuit of the almighty dollar at whatever the cost. Many of these companies forget WHERE their money comes from. How about all these people who are commenting about going to Lowes rather than HD, where is their money going? Companies should focus on customers. Without them, no company.
12-20-2006 @ 5:16PM
Jason said...
Its always lots of fun to take shots at the big guy on the block. Walmart has to contend with it daily yet the same people who criticize them also patronize their stores, eagerly taking advantage of the low prices that the Walmart business model (seemingly despised by so many)can offer. Home Depot is now falling under the same umbrella of contempt due to its success. I say if something works and is successful then good for them. I'm not about to go and turn on it tomorrow just for the sake of taking a "fight the power" mentality like the rest of you. All of the problems or I should say individual perceptions and analogies of Home Depot which can hardly be considered to be the public's view, are all problems that can be found in any retailer or company for that matter (to include disgruntled employees who were probably let go because they didn't have any customer service skills from the sounds of it). Home Depot has always provided me with a fine shopping experience and if that offsets even one of these nay-sayers then my job here is done. Keep doing what you're doing HD.
12-18-2006 @ 11:45PM
GERI Mckellep said...
I HAVE BEEN A CUSTOMER OF HD FOR OVER 20 YEARS,ALL OUR REMODELING WAS DONE WITH THE STORES HELP & ASSISTANCE.I CANNOT FAULT THEM WITH PRICE OR EXCELANT SERVICE.SAME WITH ALL MY FRIENDS & NEIGHBORS.SORRY FOLKS.
12-20-2006 @ 6:59AM
Frank Trocchio said...
I worked for Home depot for 5 years, when it was a pleasure to work and shop at H,D,The worst thing H.D. ever did was to hire Bob Nardelle.Everyone loved Bernie,I remember one day he came into the store I worked, and went around to every asso. in the store ,and shook everyone hand. Bob nardelli doesn;t know the meaning of moral,all he cares about is making his millions and millions of dollars, that we all know he doesn;t deserve. So all you stock holders,if you want to try to save home depot, then vote to get ride of Mr Nardelli,na leave him there, You see I really don't care what you do, becuase I work for Lowes for the last 4 years, so Yea, Mr nardelli keep up the good work. You are doing a wonderful job for my Lowes stock >>>THANKS
12-20-2006 @ 7:09AM
Jason said...
Frank, then why is your Lowes stock worth $10 less the HD? And why is Home Depot the second largest retailer, second only to Walmart? Lowes isn't even on the top 10. Sounds like you need to set your sights more on improving Lowes and less on bashing Home Depot.
12-20-2006 @ 10:55AM
Jay said...
I am current nine year ASM for HD. I can easily understand the frustrating times my customers face. As corny as it may seem, there are some of us in salaried positions (assistant managers) who actually care and help as many as we can. We use the tools we have and are given. There are not many. If my customer takes the time to come in, then I want that customer to leave happy and with what they came in for. As for bashing HD, I hear it every day. Is the customer always right in my book? Absolutely! It's just nice to have someone tell us, that we do something nice every once in awhile. See you in the aisles!
12-20-2006 @ 8:47PM
Jim Thomas said...
Almost 9 years at Home Depot and my blood still runs orange. The compamy has no one to blame but themselves. they hire people who don't care and they just stand around. That drives me crazy. I ry to motivate them but they couldn't care less. I end up getting sent home early. Go back to the old way. Reinstitue the customer service badge awards. Now it's hard to get anything...especially when your department head doesn't like you. DH's should set the example for the subordinates. Do everything we can to help and advise the customer. God I love working at HD. I'll take the bad with the good anytime. The good will always win out. Home depot is MY home depot. I love the store and the customers............99 percent of them but I still deal with the difficult ones. It's part of the job and sharpens your CS skills.
1-05-2007 @ 8:23AM
Jeff said...
I started at HD when the company had just hit 3.8 billion in sales and we had 5 stores in the Los Angeles area. I left HD after Bob decimated the ranks of knowledgable management who understood the company. It would be false to say that Bob did not bring changes that were good- he did. He made Management- upper level very accountable for results which is why a number of them left. THere were numbers of Management staff who really did not contribute a lot and Bob dealt with them. THe bad thing is that many good people left also due to Bob not holding himself to the same high standards he set for others. If he had , he would have fired himself a LONG time ago.
THe company has changed a lot over the years- some changes good and some bad. People complain about the dirty stores , the lack of help but when I started we had pallets of freight on the floor and while we seemed to have more help , they needed to SLAM frieght to clear the floor and often were picked for the job because they could SLAM friehgt as that was more important than Customer Service.
Now do not get me wrong- there was a huge emphasis on C/S and PK. Who can forget the "DepotDons" we built all over the staore and I hstill have my hard earned Homer Pin with its glue-on bars showing I was proficient in Hardware , plumbing etc.
Today the stores ARE cleaner but the knowledge is not there. Many stores have very knowledgable people but the mix of knowledge is poor. THere are too few on the floor and the ones that are there are poorly managed. Managers get criticized for not caring but many of the tools they used to use have been taken away from them. WSE once were encouraged to get to know our staff, know their family , take them to lunch but those days are long gone. Heck , take someone to lunch and you have the rest of the crew running to HR becacuse of favoritism so it is take them all or take none.
A lot of old-timers remember the good ole days but also remember the abuses in the good ole days. Rememver safety in the good ole days of climbing up racking, walking across wooden stickers and thrwoing boxes down to people below. Remember the says of working until 1 am then hitting a bar until 4 and then going back to the store as you had to open the store. HOw safe and sane were they.
THings change people, some for the good , some for the bad. Losing BOB is the best thing to happen to HD in many a year - now if we could just get a few of the old boys back things would rock!