The world's largest home improvement retailer, Home Depot
The Atlanta-based retailer will increase its capital spending budget 21% to $4 billion. It will open 200 new stores and hire 40,000 workers in an effort to make its shopping experience better and richer. Fixing up existing stores is also part of the plan, and it will spend $250 million on remodeling this year. Home Depot plans to spend a total of $880 million in 2003 for its store level initiatives, remodels, and technological updates.
Despite a rough year, Home Depot's financial situation is strong. It has little long-term debt and is in a good position to shell out for capital expenditures largely through cash from operations. Some have criticized the stores as outdated compared to rival Lowe's
Home Depot also said today that it expects sales growth of 9% to 12% for 2003 and earnings growth of 9% to 14%. That's below the company's previous long-term outlook of sales gains of 15% to 18% and earnings increases of 18% to 20%. Below, yes, but much more realistic.
It hasn't been an easy year for the company characterized by orange smocks. Home Depot is taking steps to ensure that 2003 and beyond don't turn out the same way. With a gorilla's share of the market and strong financials, there's no reason to doubt it will again become a stock market darling.