At an investor and analyst conference Dec. 8, The Home Depot announced ambitious long-term fiscal targets that include total sales of approximately $101 billion for fiscal 2018. To reach these goals, the retailer will rely on a strategic framework called Interconnecting Retail, centered on customer experience, product authority and productivity.
For its most recent full fiscal year of 2014, Home Depot’s sales totaled $83.2 billion, with comparable store sales increases of 5.3% over the previous year.
Other key financial targets for 2018 include:
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• Compound annual sales growth rate from the end of fiscal 2015 of approximately 4.7%;
• An operating margin of approximately 14.5%; and
• Return on invested capital of approximately 35%.
“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 Chairman, CEO and President Craig Menear in a statement.
The Interconnecting Retail framework includes connecting the retailer’s passion for customer service to changing customer needs and expectations in order to provide a frictionless experience in stores, online, on job sites or in customers’ homes.
Home Depot also identified targeted growth areas, including higher sales with professional contractors and businesses, along with continued growth from the retailer’s digital assets. Productivity improvements will focus on incremental supply chain benefits and continued opportunities within Home Depot stores.
The retailer’s rosy long-term forecast follows the announcement last month of strong Q3 results: $21.8 billion in sales, a 6.4% increase over the same period in fiscal 2014, along with a 5.1% increase in comparable store sales globally. U.S. stores performed even better, with comp store sales increases of 7.3%. Net earnings for Q3 were $1.7 billion, compared to $1.5 billion for the same period in fiscal 2014.
Based on these results, Home Depot is projecting sales increases of 5.7% for all of fiscal 2015, with comp store sales rising 4.9%. The retailer currently operates 2,273 stores in North America and in U.S. territories.