Home Depot 2004 Annual Report Download - page 4

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We also continued to focus on services, with 23 national programs
handling more than 11,000 installations per weekday. Our
services revenue increased by 28% in 2004.
Responding to the growing demand for online shopping, we
revamped our homedepot.com site, making dramatic improve-
ments in the overall navigability of the site with more than 15,000
product SKUs for sale online, including appliances.
All of these extensions to our business are proof positive that our
market-back customer approach is allowing us to successfully offer
the right products and services to meet the changing needs of our
diverse customer base.
Expanding the Market
We also made several important moves to expand our global
market presence. With the acquisition of Home Mart in Mexico,
we have become the largest home improvement retailer in that
market in less than three years with 44 stores at year-end. In
Canada, we celebrated our 10-year anniversary in 2004 and
opened 15 stores, bringing our total there to 117. We also
announced plans to expand our presence in China, capitalizing on
our learning from our two merchandising offices, to enter the retail
sector in this rapidly growing market.
We made several important acquisitions within the professional
customer market: most notably White Cap Construction Supply, in
June 2004, a leading professional distribution business; Creative
Touch Interiors, in January 2004, a leading national design center
partner for production homebuilders, which is now part of The
Home Depot Supply, Builder Solutions; and Litemor, in February
2005, Canada’s largest national commercial lighting distributor.
These acquisitions give us strong entry points into the $400+ billion
professional market. We intend to continue growing in the market
both organically and through future acquisitions.
Improve Everything We Touch
We celebrated our 25th anniversary in 2004 and used this year to
reaffirm the values that have made this company so special.
We rejuvenated our Team Depot volunteer program by creating our
first annual Week of Service, contributing more than 260,000
volunteer hours in just seven days through more than 1,600 proj-
ects in our communities.
That same spirit of giving back and supporting our communities vividly
came to life as four hurricanes struck the Southeastern U.S., and The
Home Depot mobilized to deliver the largest relief and resupply effort
in our company’s history. In total, we donated more than $4 million
in contributions to rebuilding efforts throughout the impacted areas.
We also stepped up and recommitted to our troops serving over-
seas, with a $1 million tool donation to support their rebuilding
efforts in Iraq.
Finally, we witnessed our own Olympic Job Opportunity Program
associates pursue their dreams of winning as they participated in
the Olympics and Paralympics in Athens, Greece, bringing home
a record 41 medals.
These and other efforts reflecting our values earned us prestigious
recognition, including the 2004 Citizenship in Action Award from
the U.S. Chamber of Commerce and the Freedom Award from the
U.S. Department of Defense.
2005: A Turning Point
We have built an impressive track record of performance and
success over the past several years and have a tremendous amount
of momentum as we move into 2005.
Capitalizing on that momentum will require continued discipline
and focus on execution. As we open 175 new stores in 2005 and
continue to invest in the modernization of our stores, it is customer
satisfaction, customer conversion and average ticket that will be key
to driving growth in our core retail business. With approximately
1.3 billion customer transactions a year, even slight improvements
in these key metrics can drive exponential gains in our financial
performance. At the same time, we will stay focused on develop-
ing multiple platforms for sustainable, profitable growth in excit-
ing new customer markets, product and service categories, and new
geographies.
2005 is a turning point in our history: a year to build on our strong
momentum and proven strategy, to continue to execute on our plan
and to continually improve the customer shopping experience. This
is a company with a proud past and increasingly bright future and
we recognize that our associates are our competitive advantage.
In the four years I have been here, our 325,000 orange-blooded
associates have proven to me time and again that when we set our
minds on something, we always get it done – the right way – and
that is exactly what we intend to do in 2005.
Thank you for your continued support, which was instrumental in
helping us deliver on our core purpose to Improve Everything
We Touch in 2004. I hope you are as excited as I am about the
opportunities that lie ahead for our great company.
Sincerely,
Bob Nardelli
Chairman, President & Chief Executive Officer
March 28, 2005