Home Depot’s multi-faceted product mix

Home Depot (HD) is the largest home improvement retailer in the world. Its products include building materials, lawn and garden products, and home appliances, among other things. The company aims to provide a broad range of innovative and value-oriented products to its customers. Kitchen and garden products are the best-grossing product categories. These accounted for nearly 27% of revenues in fiscal 2014, which ended January 31, 2014.

Home Depot’s Product Portfolio and Supplier Relationships

Product lines

Products include both proprietary brands as well as some that have been externally sourced. These are some of the major brands at Home Depot:

  • Behr for paints
  • Cree for lighting
  • Glacier Bay and Martha Living for kitchen cabinets
  • SoftSpring and Martha Living for carpets
  • Plantations Patterns Patio for outdoors

Certain product lines retail exclusively at HD such as Brown Jordan patio furniture. Home Depot also sells its own products under the Home Decorators Collection brand.

Supplier relationships

Home Depot is a major customer of certain firms. The retailer’s purchases have a significant bearing on the financial performance of these suppliers. Here are some of HD’s major suppliers:

    • Masco (MAS) for architectural coatings and paint products including the Behr brand
      • HD and Lowe’s (LOW), HD’s major competitor, are respectively Masco’s number one and two customers. MAS made sales worth $2.3 billion to HD in 2014
    • Mohawk Industries (MHK) for flooring and carpets

  • Fortune Brands Home & Security (FBHS) for kitchen and bath cabinets, plumbing, home security systems and locks and doors, among others
    • HD and LOW respectively accounted for 15% and 14% of FBHS’s revenues—$4 billion in its last fiscal year
  • Scotts Miracle-Gro (SMG) for lawn and garden care products
    • HD and LOW respectively accounted for 36% and 19% of SMG’s net sales—$2.8 billion in its last fiscal year
  • Cree (CREE) for lighting
    • HD accounted for ~13% of CREE’s revenues—$1.7 billion in its last fiscal year

HD also sources household appliances from companies including Whirlpool (WHR), Samsung (SSNLF), General Electric (GE), and Stanley Black & Decker (SWK), among others.

On top of its large range of products, Home Depot offers services including installation. Service is a key element of its enhanced customer strategy.

HD and LOW are part of the top ten holdings in the iShares U.S. Home Construction ETF (ITB). Together, they constitute ~8.4% of the ETF.

Latest articles

On Tuesday, Tesla (TSLA) cut the prices of its vehicles to standardize its global car line-up, according to Reuters.

Yesterday, PayPal (PYPL) announced that it would expand Xoom, which is its international money transfer service, to 32 markets in Europe.

Visa stock has risen about 37% and has outperformed the S&P 500 Index so far in 2019.

16 Jul

What to Expect from Skechers’s Q2 Results

WRITTEN BY Sharon Bailey

Skechers (SKX) is set to declare its results for the second quarter after the markets close on July 18. Here's what you should know.

On Tuesday, Canadian Pacific Railway (CP) reported strong second-quarter earnings. The company's top and bottom lines touched a record mark.

16 Jul

What to Expect from Crown Castle's Q2 Results

WRITTEN BY Sushree Mohanty

Crown Castle International (CCI) is scheduled to announce its second-quarter earnings results on Wednesday after the market closes.