38 Year’s after Ken Langone first founded Home Depot to serve the growing needs of the Do-It-Yourself consumer, it has become the largest home improvement retailer, with over 2,200 stores in the US, Canada, Mexico and operations in China, and 371,000 employees. Prior to 2007, Home Depot was operating through a rapid expansion phase, where they where opening 200 new stores a year, by 2010 they had only opened one store in the U.S and five stores in Mexico, marking the beginning of a strategic transition away from domestic expansion, and towards building their international brand. International expansion has not been smooth; in 2012 HD closed its Chinese stores. Domestically, however, Home Depot is focused on improving strong customer retention through service and innovation in their consumer retail operations, especially after they have completely sold off their stake in what was once their industrial distribution division, HD Supply.

Home Depot first established itself through its massive warehouse-style stores, designed to be more robust than any other retailer in the market. Today Home Depot stores have an average size of 104,000 square feet of indoor retail space, as well as an additional 24,000 square feet for their garden centers. Home Depot stores cater to three groups of customers, DIY, DIFM and Professionals. Do-It-Yourself and Do-It-For-Me are typical homeowners who purchase home improvement materials for their own personal projects and installations. Additionally, Home Depot serves professionals, which includes contractors, builders, remodelers and repair people. By catering to both amateur and professional customers, HD has carved out their space as a go-to retailer for home improvement purposes.

Home Depot generates the most revenue from its kitchen department, which makes up 10% of 2015 revenue, indoor gardening, which makes up 9.1% of revenue, the paint department, which makes up 8.8% of revenue and outdoor garden, which makes up 7.7% of revenue. With its stock price already up over 25% for the year, we believe that due to Home Depot’s reputation for strong management, and increases in home ownership, interest rates, and home prices will fuel further growth in stock price in 2016.

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