Home Depot’s sales increase driven by $1.2bn supply chain investment

By Olivia Minnock
Home Depot, the largest home improvement retailer in the world, has reported sales of $30.5bn for the second quarter of the 2018 fiscal year, marking a...

Home Depot, the largest home improvement retailer in the world, has reported sales of $30.5bn for the second quarter of the 2018 fiscal year, marking a year-on-year increase of 8.4%.

The company, which reported an increase in online sales of 26% this year, puts its growth partly down to work on its supply chain management.

Craig Menear, CEO, stated: “We were very pleased with our record second quarter sales and earnings. Not only did our seasonal business rebound from the first quarter, our overall results exceeded our expectations. These results exemplify the outstanding execution of our combined team of store associates, merchants, suppliers and supply chain.”

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In a conference call with investors, Menear expanded: “Our solid performance was driven by outstanding execution of our store associates, merchants, suppliers and supply chain teams. Navigating a sudden spike in demand like the one we witnessed in May isn’t easy.

“Delivering the best in class interconnected shopping experience encompasses much more than our digital properties and physical store assets. Our supply chain and investment that we are making to enhance delivery and fulfilment options available for customers is also an important area of focus. We have continued to develop and roll out new delivery capabilities.”

Forbes has also put this growth down partly to supply chain investment, stating that even in the past 10 years “the company has made big strides in its upstream supply chain – moving products to the stores and direct fulfilment centres – and more recently, it has undertaken significant expenditure to build its downstream supply chain – delivering to customers directly”.

In June, the company announced it would spend $1.2bn over the next five years to speed up the delivery of products, in line with increasing consumer expectations and demand for online ordering.

As part of the investment, Home Depot will open up 170 new distribution facilities across the US, with the goal of being able to reach 90% of the country’s population in one day or less. The supply chain investment forms part of an even bigger overall plan which will see Home Depot spend a total of $11bn to future-proof its retail operations.

 

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