Home Depot's 2007 revenue of $77.3 billion nearly doubles that of its nearest competitor, Lowe's (US$ 48 billion). HD Supply, the segment that catered to professionals, contributed nearly 80% of all revenue growth for Home Depot from 2005 to 2006, and until reports confirmed its sale, was expected to drive a large portion of the company's future growth. However, despite a disappointing price of only $8.5 billion, selling HD Supply may not have been a bad idea--while the professional supply business offers strong revenue growth opportunities, it also generated lower operating margins than retail (5-8% to retail's 8-12%). Also, the HD Supply business was even more exposed to changes in the housing market than some parts of Home Depot's traditional retail business.
Companies involved in the housing market
Construction and home improvement
· D.R. Horton (DHI), Toll Brothers (TOL), Pulte Homes (PHM), Lennar (LEN), and other residential construction companies are highly leveraged to conditions in the housing market.
· Home Depot (HD) and Lowe's Companies (LOW), both home improvement retailers, are dependent on the housing industry for business. Housing slumps have a significant impact on these companies' bottom lines.
· Plum Creek Timber Company (PCL), Weyerhaeuser Company (WY), and Louisiana-Pacific (LPX), as well as other... [continues]
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(2008, 10). Home Depot. StudyMode.com. Retrieved 10, 2008, from http://www.studymode.com/essays/Home-Depot-168340.html
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