Home Depot 2014 Annual Report Download - page 9

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During fiscal 2014, we offered a number of proprietary and exclusive brands across a wide range of departments, such as
Husky® hand tools and tool storage; Defiant® door locks; Everbilt® hardware fasteners; Hampton Bay® lighting and fans;
Vigoro® lawn care products; RIDGID® and Ryobi® power tools; Glacier Bay® bath fixtures; HDX® hardware, storage and
cleaning products; Home Decorators Collection® furniture and home décor; and CE Tech® audio-visual accessories. In fiscal
2014, we acquired one of our principal fasteners suppliers, known as Crown Bolt, which provides sourcing, distribution and
in-store servicing support for our Everbilt® and related fastener brands. We will continue to assess strategic alliances and
relationships with suppliers and opportunities to expand the range of products available under brand names that are exclusive
to The Home Depot.
We maintain a global sourcing program to obtain high-quality and innovative products directly from manufacturers around
the world. In fiscal 2014, in addition to our sourcing operations at our Store Support Center in Atlanta, Georgia, we
maintained seven sourcing offices, located in Shanghai, China; Shenzhen, China; Taipei, Taiwan; Gurgaon, India; Rome,
Italy; Monterrey, Mexico and Toronto, Canada.
The percentage of Net Sales of each of our major product categories (and related services) for each of the last three fiscal
years is presented in Note 1 to the Consolidated Financial Statements included in Item 8, "Financial Statements." Net Sales
outside the U.S. were $8.5 billion, $8.5 billion and $8.4 billion for fiscal 2014, 2013 and 2012, respectively. Long-lived
assets outside the U.S. totaled $2.5 billion, $2.9 billion and $3.1 billion as of February 1, 2015, February 2, 2014 and
February 3, 2013, respectively.
Quality Assurance. We have both quality assurance and engineering resources dedicated to overseeing the quality of all of
our products, whether they are directly imported, locally or globally sourced or proprietary branded products. Through these
programs, we have established criteria for supplier and product performance that are designed to ensure that our products
comply with applicable international, federal, state and local safety, quality and performance standards. We also have a
Supplier Social and Environmental Responsibility Program designed to ensure that our suppliers adhere to the highest
standards of social and environmental responsibility.
Building Connectivity. A typical The Home Depot store stocks approximately 30,000 to 40,000 products during the year,
including both national brand name and proprietary items. To enhance our merchandising capabilities, we continued to make
improvements to our information technology tools in fiscal 2014 to give our merchants and suppliers greater visibility into
category and item performance and to better assort products within stores with similar attributes based on local preferences,
regulations and demographics. We also continued to use the resources of BlackLocus, Inc., a data analytics and pricing firm
we acquired in fiscal 2012, to help us make focused merchandising decisions based on large, complex data sets. We also use
these analytics at a store-level to automate and optimize our markdown and clearance process.
As noted above, our online properties complement our stores by serving as an extended aisle, and we offer a significantly
broader product assortment through our Home Depot, Home Decorators Collection and Blinds.com websites. For our online
user experience, we continued to enhance our websites and mobile sites by improving navigation and search functionalities to
allow customers to more easily find and purchase an expanded array of products and provide them with flexibility and
convenience for their purchases, for example, through our BOPIS, BOSS and BODFS programs and other delivery
enhancements introduced in fiscal 2014. As a result of these efforts, we increased traffic to our websites, online sales
conversion rates, and the number of orders being picked up in our stores. For fiscal 2014, we had over 1.2 billion visits to our
online properties; sales from our online channels increased over 36% compared to fiscal 2013; and almost 40% of our online
orders were picked up in a store, compared to approximately 30% in fiscal 2013.
Energy Saving Products and Programs. The Home Depot has a long-standing commitment to sustainability, as do many of
our customers, and we believe our efforts have been successful in creating value for our customers and shareholders. For
example, we offer a growing selection of environmentally-preferred products, which supports sustainability and helps our
customers save money, energy and water. Through our Eco Options® Program introduced in 2007, we have created product
categories that allow consumers to easily identify products that meet specifications for energy efficiency, water conservation,
healthy home, clean air and sustainable forestry. As of the end of fiscal 2014, our Eco Options® Program included over 9,000
products. Through this program, we sell products such as ENERGY STAR® certified appliances, compact fluorescent light
("CFL") and LED light bulbs, tankless water heaters and other products, enabling our customers to save on their utility bills.
We estimate that in fiscal 2014 we helped consumers save over $630 million in electricity costs through sales of ENERGY
STAR® certified products as well as almost 48 billion gallons of water and over $400 million in water bills through the sales
of WaterSense®-labeled bath faucets, showerheads, aerators, toilets and irrigation controllers. Additionally, as a result of
converting all of our consumer interior paints to "Low VOC" or "Zero VOC" in fiscal 2012, we have eliminated over 55
million pounds of volatile organic compound emissions since the beginning of fiscal 2012 through the end of fiscal 2014.