Home Depot 2007 Annual Report Download - page 21

The state of the housing, construction and home improvement markets, rising costs, a reduction in the availability of financing, weather and
other conditions in North America could adversely affect our costs of doing business, demand for our products and services and our
financial performance.
In recent months, the housing, residential construction and home improvement markets have deteriorated dramatically. We expect the
deterioration to continue through 2008, and our fiscal 2008 Net Sales and Diluted Earnings per Share from Continuing Operations to decline.
Other factors – including interest rate fluctuations, fuel and other energy costs, labor and healthcare costs, the availability of financing, the state
of the credit markets, including mortgages, home equity loans and consumer credit, consumer confidence, weather, natural disasters and other
factors beyond our control – could adversely affect demand for our products and services and our financial performance. These and other similar
factors could:
•
increase our costs,
• cause our customers to delay undertaking or determine not to undertake new home improvement projects,
•
cause our customers to delay purchasing or determine not to purchase home improvement products and services, and
•
lead to a decline in customer transactions and our financial performance.
We rely on third party suppliers, and if we fail to identify and develop relationships with a sufficient number of qualified suppliers, our
ability to timely and efficiently access products that meet our high standards for quality could be adversely affected.
We buy our products from suppliers located throughout the world. Our ability to continue to identify and develop relationships with qualified
suppliers who can satisfy our high standards for quality and our need to access products in a timely and efficient manner is a significant
challenge. Our ability to access products also can be adversely affected by political instability, the financial instability of suppliers, suppliers'
noncompliance with applicable laws, trade restrictions, tariffs, currency exchange rates, transport capacity and cost and other factors beyond our
control.
If we are unable to effectively manage and expand our alliances and relationships with selected suppliers of brand name products, we may be
unable to effectively execute our strategy to differentiate ourselves from our competitors.
As part of our strategy of product differentiation, we have formed strategic alliances and exclusive relationships with selected suppliers to market
products under a variety of well-recognized brand names. If we are unable to manage and expand these alliances and relationships or identify
alternative sources for comparable products, we may not be able to effectively execute our strategy of differentiation.
Any inability to open new stores on schedule will delay the contribution of these new stores to our financial performance.
We expect to increase our presence in certain existing markets and enter new markets. Our ability to open new stores will depend primarily on
our ability to:
•
identify attractive locations,
•
negotiate leases or real estate purchase agreements on acceptable terms,
• attract and train qualified employees, and
• manage pre-opening expenses, including construction costs.
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