The Home Depot (HD) Goldman Sachs 31st Annual Global Retailing Conference summary

Macroeconomic and consumer trends

• Consumer spending remained resilient post-COVID, supported by wealth effects from rising home values and equity portfolios, despite a low savings rate and macro uncertainty.

• Home improvement spending has normalized to pre-pandemic levels, with a shift back to services and travel, and a pull-forward of durable goods demand now largely played out.

• Housing turnover has dropped significantly due to higher interest rates, reducing large project activity and creating a headwind for the sector.

• Uncertainty around rates, recession fears, and the election have caused consumers to delay larger home projects, despite high tappable home equity.

• Cash-out refinancing and HELOC activity are down, but expectations are for a return to normal as headwinds dissipate.

Business performance and category dynamics

• Repair and maintenance (break-fix) activity remains strong, especially as the housing stock ages, while larger, financed projects are more challenged.

• Price stabilization has occurred post-pandemic, with no deflation expected and headwinds from average unit retail (AUR) pressure dissipating.

• Pro segment continues to outperform DIY, with strong engagement in categories like vinyl plank flooring, paint, and outdoor power equipment.

• Market share gains are evident, with performance outpacing industry benchmarks and competitors, especially during periods of moderation.

• SRS acquisition expanded total addressable market (TAM) by $50 billion and is driving share gains in roofing, pool, and landscape verticals.

Strategic initiatives and growth plans

• Focus on capturing the complex pro customer by building out sales force, order management, and job site delivery capabilities.

• SRS acquisition supports complex pro strategy, targeting a $200 billion TAM not previously addressed, with each share point representing significant revenue potential.

• Supply chain build-out includes over 150 new facilities, with bulk distribution centers improving store replenishment, delivery efficiency, and direct-to-job-site service.

• New store openings are resuming, with plans for about 25 new stores per year, reflecting population growth and migration trends.

• Promotional activity and cost environment have normalized to pre-pandemic levels, with a rational approach to promotions and stable labor and material costs.