Analysts’ revenue expectations
For 2019, analysts expect Home Depot (HD) to post revenues of $111.94 billion—3.4% growth from $108.20 billion in 2018. The revenue growth is expected to be driven by the addition of new stores and positive SSSG (same-store sales growth).
Home Depot’s management expects its revenues to rise 3.3% in 2019, which includes an extra week of operations in 2018. For the same period, management also expects the SSSG to be 5.0%. The company expects to open five new stores.
To drive sales, Home Depot is improving its delivery and fulfillment options, enhancing customers’ experience through an interconnected shopping experience, improving customers’ satisfaction, and expanding its product offerings.
In June, the company’s management announced that it would invest $1.2 billion to strengthen its supply chain and improve its delivery speed over the next five years. During this period, Home Depot plans to add 170 distribution facilities to deliver products to 90% of the US population within one day.
The company plans to continue to roll out digital asset enhancements in 2019 to improve customers’ experience. Home Depot launched the new B2B website experience, which delivers more personalized product offerings to professional customers. The company expects to roll out the service to more than 1 million professional customers by the end of 2019—compared to 100,000 professional customers at the end of the fourth quarter.
Since ~50% of the online sales are picked up in the stores, Home Depot is investing to improve customers’ convenience by expanding its automated lockers. Currently, automated lockers are available in ~1,000 stores.
In the fourth quarter, the company’s paint department posted above-average SSSG. To maintain the growth, Home Depot plans to roll out a new color solutions center in all of its stores and fully reset its exterior stains.