Home Depot 2007 Annual Report Download - page 22

Environmental regulations, local zoning issues and other laws related to land use affect our ability to open new stores. Failure to effectively
manage these and other similar factors will affect our ability to open stores on schedule, which will delay the impact of these new stores on our
financial performance.
The implementation of our supply chain and technology initiatives could disrupt our operations in the near term, and these initiatives might
not provide the anticipated benefits or might fail.
We have made, and we plan to continue to make, significant investments in our supply chain and technology. These initiatives are designed to
streamline our operations to allow our associates to continue to provide high quality service to our customers and to provide our customers with
a better experience. The cost and potential problems and interruptions associated with the implementation of these initiatives could disrupt or
reduce the efficiency of our operations in the near term. In addition, our improved supply chain and new or upgraded technology might not
provide the anticipated benefits, it might take longer than expected to realize the anticipated benefits, or the initiatives might fail altogether.
We may not timely identify or effectively respond to consumer trends, which could adversely affect our relationship with customers, the
demand for our products and services and our market share.
It is difficult to successfully predict the products and services our customers will demand. The success of our business depends in part on our
ability to identify and respond to evolving trends in demographics and consumer preferences. Failure to design attractive stores and to timely
identify or effectively respond to changing consumer tastes, preferences, spending patterns and home improvement needs could adversely affect
our relationship with customers, the demand for our products and services and our market share.
The inflation or deflation of commodity prices could affect our prices, demand for our products, sales and profit margins.
Prices of certain commodity products, including lumber and other raw materials, are historically volatile and are subject to fluctuations arising
from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations and
periodic delays in delivery. Rapid and significant changes in commodity prices may affect our sales and profit margins.
If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in expanding our
international operations.
Our strategy includes expansion of our operations in international markets by selective acquisitions, strategic alliances and the opening of new
stores. Our ability to successfully execute our strategy in international markets is affected by many of the same operational risks we face in
expanding our U.S. operations. In addition, international expansion may be adversely affected by our inability to identify and gain access to local
suppliers as well as by local laws and customs, legal and regulatory constraints, political and economic conditions and currency regulations of
the countries or regions in which we currently operate or intend to operate in the future. Risks inherent in international operations also include,
among others, the costs and difficulties of managing international operations, adverse tax consequences and greater difficulty in enforcing
intellectual property rights. Additionally, foreign currency exchange rates and fluctuations may have an impact on our future costs or on future
cash flows from our international operations.
Our success depends upon our ability to attract, train and retain highly qualified associates.
To be successful, we must attract, train and retain a large number of highly qualified associates while controlling labor costs. Our ability to
control labor costs is subject to numerous external factors,
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