Home Depot, an ongoing discussion....

[fenders53]

Here is another anecdotal update for what it is worth. I have now spent a few more months in one of the high dollar specialty departments. This is all of course very local info. A corporate HQ insider I am not.

My job is a stressful adventure like I haven't seen since I was deployed to the big desert. We are missing sales goals for six months now, by a wide margin. Store wide a bit better but still well short of goals. It's a well managed store that has a good REP for meeting or exceeding goals, but not now. I am in Millwork dept alone and that is not working, not at all. They have hired 30 temp employees this month for garden because that is HD's Christmas. No luck finding a competent assistant for me. The labor market remains tough here. Now we just need some very good weather. The store traffic is still weak with better weather. The HD response is to cut hours and under staff departments. Trust me that ticks the customers off. I hear about it hourly.

I am extremely curious what this quarter sales and earnings look like nation wide. Hopefully the rest of the country is doing MUCH better than the upper Midwest. I am absolutely amazed the stock is launching now. Do the analysts have no visibility of current sales trends? My official opinion is there is no way HD should be rising so fast right now. I think the summer will be a better story as it historically is.

We shall see soon enough. Quarter ends in a few weeks.

[rayray]

(04-13-2019, 08:48 PM)fenders53 Wrote:   .......The HD response is to cut hours and under staff departments.  Trust me that ticks the customers off. I hear about it hourly.....  

Funny, I haven't been happy with HD for a couple of decades, maybe more and Lowe's, forgetaboutit, I was never impressed. I remember the first time HD showed up in my neck of the woods in the 1980's, my step-father and I were in awe! Almost every department had an experienced retiree working a department they knew something about, had a electrical question--no problem! Had a plumbing question--no problem!! Wanted a specific screw, nut, bracket, some kind of attachment someone would find it for you. Wanted to check about something like building a ramp, walk to the contracting department and they'd bring out a book or some information and look at it with you. Now, all I want to do is find the right aisle and if an employee sees me coming they turn around and bolt...lol. Or, they don't know....or I ask a question and I get a blank stare. But such is life--sometimes I think we're getting dumber as a society.

I dread going to my local HD (any of them now) or Lowe's. I have more luck at my local Ace Hardware, maybe because it's a lot smaller and just easier to find something. How I miss the local family owned hardware stores but what a lot of people talk about what Amazon did to retail, Home Depot did the same thing long ago to mom-and-pop hardware stores as Walmart did it to, well, a lot of different kinds of family owned businesses.

Every time I think about buying HD stock I think about that employee walking quickly in the opposite direction--it keeps me from pulling the trigger--it gets me a little emotional and I can't invest when I'm emotional lol.

[fenders53]

I can state with confidence the associates at my store have well above average product knowledge, and 95% of them are great at customer service. The bad news is the flooring sales woman is clueless about plumbing. When she is approached, she has to grab the First Phone and try in vain to get the customer help. But plumbing is not manned for the next 6 hours, so she calls me because she knows millwork is right next to plumbing, and she knows I won't tell her no I am too busy and leave her dealing with an angry customer. I end up working 3-5 departments during my shift. That would be OK if I was caught up and closing my high end door and window sales, and restocking my shelves with heavy stuff withe my non-existent spare time. If I make a small mistake it's big money. It's very stressful if you actually care, which I do. No custom door order mistakes so far, but the day is coming and I dread it. P.S. I don't dealing with wealthy entitled people. Glad I didn't make retail my actual career. I'd be in prison by now lol. Most of my customers are very nice, because I am nice to them.

I still love my store manager. With HD for 18 years and the man works like a mule at least a a few hours a day. Walks into your department when it looks like a tornado struck with pallets of heavy doors cluttering my aisles. Starts putting real heavy stuff where it belongs for me. Gives you a fist bump as he leaves and tells you everything is going to be fine. Just keep our customers happy. My favorite Assistant Store Manager got fired last month for weak sales in the specialty departments. I guess district level and higher had to throw a few virgins into the volcano as a sacrifice. Publically traded retail is absolutely ruthless. If HD fires my store manager for poor sales I swear I will quit, sell my HD shares and then go short HD.

[fenders53]

I thought some of you might find this interesting...

I was talking to my fellow associate that works the electrical department the other day. We were talking HD stock. He has been there since before they went public, so a very long time. Put a lot of his early pay in company shares. He has a few hundred shares now. Something important came up long ago and he sold off the 109,000 shares he once had for a couple bucks a share split adjusted. I just wanted to puke when he told me that. He sure wouldn't need to be selling ceiling fans and circuit breakers had he kept half those shares. He is a good guy and it made me really sad to hear him share that story.

[rayray]

(05-15-2019, 07:36 PM)fenders53 Wrote: I thought some of you might find this interesting...

I was talking to my fellow associate that works the electrical department the other day. We were talking HD stock. He has been there since before they went public, so a very long time. Put a lot of his early pay in company shares. He has a few hundred shares now. Something important came up long ago and he sold off the 109,000 shares he once had for a couple bucks a share split adjusted. I just wanted to puke when he told me that. He sure wouldn't need to be selling ceiling fans and circuit breakers had he kept half those shares.  He is a good guy and it made me really sad to hear him share that story.

millions and millions of dollars


So far, my only regrets have been on the sell side...and this is why I don't do it--I don't sell. Of course that doesn't mean I'm out there gambling in the stock market. I figure so far my sells have cost me at least 400 to 500k so far if I didn't sell.

I'm talking about individual stocks not mutual funds...eventually all my mutual funds will be gone.

[fenders53]

(05-15-2019, 07:50 PM)rayray Wrote:

(05-15-2019, 07:36 PM)fenders53 Wrote: I thought some of you might find this interesting...

I was talking to my fellow associate that works the electrical department the other day. We were talking HD stock. He has been there since before they went public, so a very long time. Put a lot of his early pay in company shares. He has a few hundred shares now. Something important came up long ago and he sold off the 109,000 shares he once had for a couple bucks a share split adjusted. I just wanted to puke when he told me that. He sure wouldn't need to be selling ceiling fans and circuit breakers had he kept half those shares.  He is a good guy and it made me really sad to hear him share that story.

millions and millions of dollars


So far, my only regrets have been on the sell side...and this is why I don't do it--I don't sell. Of course that doesn't mean I'm out there gambling in the stock market. I figure so far my sells have cost me at least 400 to 500k so far if I didn't sell.

I'm talking about individual stocks not mutual funds...eventually all my mutual funds will be gone.

He said he'd be worth a million now.  I did the quick math in my head and let it go as there was no need to add salt to the wound.  He could wast a million now and still have over a million left.  

I would be lying if I didn't admit I think you are right.  Due to lack of interest, we liquidated our investment club port 20 years ago which was full of boring DGI stocks before it even had a name.  That was a very bad sell.  75% of those stocks are up at least 300% since then.  None of them went bankrupt and paid dividends all this time.  Only one (Newell) is devasted, but still in business and paying a big accidental dividend.  Probably be even on that train wreck.   I don't even want to calculate it all out now.

All that said, please humor me and invest five minutes looking up 20 year charts for INTC, MSFT, and CSCO.  They are still rock star companies but valuation at time of purchase always matters.  I learned that the VERY hard way.  Your buy and hold all bad ideas until eternity fails miserably here.  Thankfully after a few years I gave up and invested what was left from INTC and CSCO into JNJ and XEL long ago.  That worked out.  I'd stil be down if I hadn't dumped them and that is not accetable after all this time.  I kept my MSFT and PFE shares for 15+ years though. Sold the MSFT shares a few years ago (way too early) and still hold the PFE shares to this day which was a real bad move. Hindsight is 20/20.  

BTW this account turned into my retirement fishing boat fund 5 years ago.  As it turned out I need about $26K next year or two.  I had it all in aggressive ETFs and it ran very hard since DEC.  Lost my nerve and cashed it out two weeks ago because I thought the trade deal would be a bust and right so far.  This account sitting in 100% cash now.  So $23,500 that needs to be $26K soon.  I think I'll be very careful here lol.

[rayray]

Fenders, I get you that valuation at time always matters, it really does. I don't know what are going to be my winners and what will be the eh investments--I really don't. That's why I'm just not selling--I hold and buy--hold--and buy--it's like lather--rinse--then repeat lol. That's why I like dividends.

I think that it also helps that if I don't think I can or why should I own this 10 plus years down the road I move on. Every so often I run the numbers, look at something and think--maybe I should sell this company? Then I look at the numbers again, if it's solid--I keep it. It's been a while since I sold anything.

[fenders53]

Diversification may be the bigger lesson I learned from the tech bubble at some point.  Boring stocks were running 15% a year and that was regarded as completely missing the bus. 

[fenders53]

It's been an interesting few months. I still work at HD designing custom doors and windows. A few observations I've made as I have now worked through most of the seasons.

-Springtime is "Christmas" at HD. A strong surge in store traffic and sales for several months.
-Corporate applies extreme pressure to maximize efficiency. We don't waste any sales space from floor to ceiling. It's impressive and I can see the focus on growing earnings every quarter without fail. The downside to all that is about the only way to increase margins now is to cut staffing hours. I don't enjoy trying to work three departments part of each day, but that doesn't really matter to me as a shareholder. What does matter is the customers notice By the time they wait their turn to get help from me they are what I call "pre-annoyed". For hours at a time, everyday lately, not a single employee in building materials which is lumber, concrete, drywall, siding, decking. They are taking it too far. It really has become a self-service operation in many ways. I get an ear full several times a day and it is getting worse every month. They voice their displeasure verbally, and on the surveys attached to the cash register receipts. It isn't pleasant to deal with. I guess the good news is customers inform me the same exact same thing is going on at Lowe's and other competitors. It's not hard to see why retail sales continue to grow online. Why deal with all that if your product isn't too large to ship.

-The point of all this is I wonder what quarter we finally miss earnings, and how they will react? I think same store sales are nearing a peak. Will HD and LOW expand into an already saturated US market? We may be at the wrong end of the economic cycle for that. In any event, big box retail is very interesting now that I have an inside view at the store level. Get very efficient or you'll just go away.

[ChadR]

Fenders, thanks for the on the floor insights. Being a customer, I had noticed a few of those things, but had discounted them as our store being in a poorer neighborhood, going at the wrong time of the day, etc. I mainly noticed the lack of cashiers. Which is why we always go through lawn and garden. Don't have to attempt to self check any large/bulky items that I bought that trip. If I was a contractor, the lack of floor staff would really bother me. Since I only go there about once a quarter (unless I've got some big house project that I'm working on), the lack of floor staff isn't really noticeable.

[fenders53]

(08-16-2019, 09:46 AM)ChadR Wrote: Fenders, thanks for the on the floor insights.  Being a customer, I had noticed a few of those things, but had discounted them as our store being in a poorer neighborhood, going at the wrong time of the day, etc.  I mainly noticed the lack of cashiers.  Which is why we always go through lawn and garden.  Don't have to attempt to self check any large/bulky items that I bought that trip.  If I was a contractor, the lack of floor staff would really bother me.  Since I only go there about once a quarter (unless I've got some big house project that I'm working on), the lack of floor staff isn't really noticeable.

I'm certain the individual store manager decides how to employ his staffing.  It's sales vs manhours at the end of the week.  Checkout time is definitely measured and seems more than acceptable at my store.  You just have to get to that point before you are angry.   Our local competitors are MUCH worse at manning cash registers so you just have to suck less maybe?     Seriously, maybe that is true from a stockholders perspective?    

HD corporate has a metric for almost everything.  Nothing wrong with that at all.  And they try to adjust for the season and weekly sales trends as well.  Nothing wrong with that either.  It's just interesting to watch them very clearly push their luck on customer service.  Not selling my shares yet, but I'm not doubling down either as I had planned.  Seriously considered a position in LOW, but I won't be doing that either.

[NilesMike]

(08-16-2019, 11:53 AM)fenders53 Wrote:

(08-16-2019, 09:46 AM)ChadR Wrote: Fenders, thanks for the on the floor insights.  Being a customer, I had noticed a few of those things, but had discounted them as our store being in a poorer neighborhood, going at the wrong time of the day, etc.  I mainly noticed the lack of cashiers.  Which is why we always go through lawn and garden.  Don't have to attempt to self check any large/bulky items that I bought that trip.  If I was a contractor, the lack of floor staff would really bother me.  Since I only go there about once a quarter (unless I've got some big house project that I'm working on), the lack of floor staff isn't really noticeable.

I'm certain the individual store manager decides how to employ his staffing.  It's sales vs manhours at the end of the week.  Checkout time is definitely measured and seems more than acceptable at my store.  You just have to get to that point before you are angry.   Our local competitors are MUCH worse at manning cash registers so you just have to suck less maybe?     Seriously, maybe that is true from a stockholders perspective?    

Unless you do not consider Menards a direct competitor ( I do) I would disagree as they have much more staff on hand. They do not have self checkout and always have 3 or 4 or 5 registers open with the cashier standing out in front if their is no line in their aisle. I too am long HD stock btw.