Home Depot 2014 Annual Report Download - page 2

Dear Shareholders:
Our 2014 scal year was a great year for The Home Depot; we had record retail sales, and all three U.S. Divisions,
Canada and Mexico had positive comparable store sales. Our sales growth in the year was $4.4 billion, or 5.5
percent, with comparable store sales up 5.3 percent for the Company and 6.1 percent in the U.S. Our digital channels
accounted for over $1 billion of our total growth. We also achieved the highest net earnings in Company history.
Diluted earnings per share were up 25.3 percent to $4.71 per diluted share, and we returned over $9.5 billion dollars to
our shareholders in the form of dividends and share repurchases. These results reect our continued focus on internal
initiatives, an improving U.S. economy, and the continued recovery of the U.S. housing market.
As you know, in September we reported a payment data breach. We immediately took action to ensure our customers
would be taken care of and expedited encryption of customer payment data in the U.S., which offers signicant
new protection for our customers. As our breach and other recent security breaches conrm, the threat posed by
cybersecurity attacks is increasing, and we are enhancing our investments in data security to combat this evolving
threat. I would like to thank our customers for their continued trust in The Home Depot and thank all of our associates
who worked tirelessly to earn that trust by providing excellent service to our customers.
The retail industry is becoming more interconnected. Our business strategy continues to evolve towards leveraging
our digital assets to support customers shopping in our stores, and leveraging our stores to support customers
shopping through our digital assets. Our strategy continues to be rooted in our three-legged stool, which stands for
customer service, product authority for home improvement and disciplined capital allocation.
What we are passionate about: customer service
The internet has changed the way our customers shop, and they expect a seamless shopping experience whether
they transact in store or online. To meet this challenge, we have re-trained all of our associates on our FIRST for
Interconnected customer service program and have completed the roll out of the second generation of our FIRST
Phone. This web-enabled handheld device allows our associates to check inventory levels, access the internet for how-
to videos, research products, and even complete sales in the aisle of a store.
We will continue to build out our interconnecting retail capabilities to connect with customers across multiple
channels, including Buy Online, Pick-up In Store; Buy Online, Ship to Store; and Buy Online, Deliver From Store.
Today, almost 40% of all U.S. online orders are picked up in our stores.
What we want to best in the world at: product authority
Our goal is to be the best in the world at product authority for home improvement by offering our customers the
best brands at compelling values, while driving innovation in the market. During the year, we built out sophisticated
planning and assortment tools to assist our merchants in improving our product offering, including better local
It is only appropriate to start by thanking Frank Blake for his leadership over the past eight years as Chairman
and CEO. Frank positioned e Home Depot to achieve the success we experienced this year and established a
strong foundation for our future. I among others have beneted from his leadership and guidance. We will be
forever grateful.