Home Depot reported the highest quarterly sales and quarterly net earnings in its history ©123RF
Home Depot reported the highest quarterly sales and quarterly net earnings in its history ©123RF

Supply chain teams credited for Home Depot growth

21 August 2018

The boss of Home Depot has attributed the company’s positive results to good supply chain management.

Speaking on an investor conference call, Craig Menear, CEO at the US home improvement chain, said the firm’s recent performance was “driven by the outstanding execution” by the firm’s suppliers and supply chain teams, particularly in managing a spike in demand earlier in the year.

Home Depot reported earnings before tax of $4.66bn on sales of $30.5bn for the second quarter of this year. Sales were up 8.4% on last year, making it both the highest quarterly sales and quarterly net earnings in the company’s history.

Menear said: “Our solid performance was driven by the outstanding execution of our store associates, merchants, suppliers and supply chain teams. Navigating a sudden spike in demand like the one we witnessed in May isn’t easy.”

Online sales in quarter two also saw year-on-year growth of 26%, which Menear attributed in part to the investment the firm has made in its supply chain.

“Delivering a best-in-class interconnected shopping experience encompasses much more than our digital properties and physical store assets. Our supply chain and the investments that we are making to enhance the delivery and fulfillment options available for customers is also an important area of focus,” he said.

This year Home Depot started piloting its fulfilment centres to facilitate its online sales. It opened its first last quarter, and plans to open a second later this year. Menear said the pilot scheme was a “cross-functional endeavour” in which supply chain “owned the execution”.

“The opening of these facilities is a cross-functional endeavor, from our real estate team that locates the appropriate sites to our IT teams that develop the proprietary software that runs them and our supply chain team that owns execution throughout,” he said.

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