Home Depot (HD) to Update on Strategic Priorities; Improves L-T Operating Margin Outlook

The Home Depot (NYSE: HD) will outline today, at its 2015 Investor and Analyst Conference, progress on key strategic priorities and discuss long-term financial targets.

Today's conference will begin at 9 a.m. ET and will be available in its entirety through a live webcast and replay at ir.homedepot.com in the Events & Presentations section.

Strategic Priorities

The Company will provide an update on the key initiatives under its strategic framework, which focuses on creating value by connecting the business end-to-end. Under this framework, which the Company calls Interconnecting Retail, the Company continues to be centered on Customer Experience, Product Authority and Productivity. The main areas of discussion will be:

• Customer Experience: The Company will provide an overview of its targeted customer base. It will also discuss how it is focused on connecting its passion for customer service to changing customer needs and expectations in order to provide a frictionless experience in its stores, online, on the job site, or in customers' homes.
• Product Authority: The Company will discuss how it continues to balance the art and science of retail by consistently delivering the best and most innovative products at the best value to its customers.
• Targeted Growth Areas: The Company will update its addressable market in the U.S. and highlight key areas of growth including opportunities to drive higher sales with professional contractors and businesses as well as continued growth from its digital assets.
• Productivity: The Company will highlight future incremental supply chain benefits and continued productivity opportunities within its stores.
• Shareholder Returns: The Company will address its approach to creating shareholder value by delivering higher returns on invested capital and increasing total value returned to shareholders in the form of dividends and share repurchases.

"While our strategic priorities are evolving to reflect the changing needs of our customers and our business, we will continue to focus on delivering the experience and value that our customers and shareholders expect from The Home Depot," said Craig Menear, chairman, CEO and president.

Fiscal Year 2015 GuidanceThe Company reaffirmed its sales and diluted earnings-per-share guidance for fiscal 2015. The Company expects sales to increase approximately 5.7 percent for the year, with comps of approximately 4.9 percent. The Company also expects fiscal 2015 diluted earnings per share to grow approximately 14 percent to $5.36. This guidance assumes foreign exchange rates remain at current levels through the fourth quarter. The Company's diluted earnings-per-share guidance includes the benefit of its intent to repurchase an additional $2 billion of shares in the fourth quarter, bringing total fiscal 2015 share repurchases to $7 billion.

Long-Term Financial Targets

In December of 2013, the Company announced an operating margin target of 13 percent and a 27 percent return on invested capital target by the end of fiscal 2015. The Company anticipates reaching these targets by the end of fiscal 2015. Today the Company will set out new long-term, fiscal 2018 financial targets as follows:

• Total sales of approximately $101 billion
• A compounded annual sales growth rate from the end of fiscal 2015 of approximately 4.7 percent
• Operating margin of approximately 14.5 percent
• Return on invested capital of approximately 35 percent

At the end of the third quarter, the Company operated a total of 2,273 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs more than 370,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index.

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