Full disclosure right up front, I work there, it's my retired guy job after my retirement from the military. None of the following is insider info on a national level, I have no visibility outside my region. It's my first experience in retail since I was a kid last century. Thought I might throw up some predictions for entertainment purposes. We'll just have to see how they play out.
HD is a very well run company that is dominant in their sector. I think that continues and they are a great long-term play. If I didn't believe that it wouldn't be one of my largest holdings.
They show true concern for employees and strive to be good enough to make a union unnecessary which doesn't work in retail. They actually type out those words and share with employees. It's a bold statement to share publicly IMO. My pay is above average for retail, and my benefits are way above average. The newish healthcare laws forced them to be a mostly part-time employer. I am now fulltime with bennies in their highest sales dept. It didn't take long for that to happen. I sell stupid expensive doors and windows for fun now. The wage they pay me is laughable compared to my previous employment, but I enjoy going to work because my efforts are recognized daily. I have a very good store manager if that isn't obvious.
HD measures EVERYTHING! It's more than annoying as an employee, but "what gets measured actually gets done". A JD exec shared that with me 30 years ago and he was right.
The shareholders demand higher same store sales and improved margins Q over Q. That concerns me as some prices are escalating at a scary pace. I've owned rental property for decades, and I'm a DIY guy so I know what I know on this matter. They are currently pushing the edge vs lower priced home improvement retailers locally. They need to be careful as customers are noticing it and I heard that plenty while manning a cash register. Pricing is NOT inelastic in the presence of competition. Menard's is the local threat as they sell lots of cheap product lines. Lowe's scares me zero in my local market. They offer a small raise to any trained HD employee. That comes off as a little desperate IMO. I'm good for now because I like how I am treated wearing an orange apron. Did I mention I enjoy the very frequent free food in the HD break room? It's an HD thing.
Now for my predictions because HD is about to report 4th quarter....
1. Christmas was OK, but not amazing.
2. Weather has been beyond horrible during Q1 2019 in the upper half of their regions (mostly a US company), and store traffic is affected in my small world. You can't do the winter outdoor construction that is normal in the Midwest. I am very curious about next Q guidance. I think all will be well by springtime. I won't be amazed if creative accounting is required to make Q4 look good. I listen to their conference calls and while boring, I find them honest for better or worse.
3. If HD blows earnings, look out on Lowe's because they are trying to be HD right now and falling short IMO.
No real actionable advice intended, but I will remain long HD and will keep covered calls in play for now because I don't see the stock launching on this earnings report.
I'll leave you with this. I may be very wrong in a few days, but I doubt I am wrong in a few months or years. I like this company a lot and that is why I applied to work there. They surely can't control macro-economics, but they sure control what they can control. I am extremely confident of that. This is the #5 employer in the US for a good reason.
I look forward to your thoughts if you follow HD.
HD is a very well run company that is dominant in their sector. I think that continues and they are a great long-term play. If I didn't believe that it wouldn't be one of my largest holdings.
They show true concern for employees and strive to be good enough to make a union unnecessary which doesn't work in retail. They actually type out those words and share with employees. It's a bold statement to share publicly IMO. My pay is above average for retail, and my benefits are way above average. The newish healthcare laws forced them to be a mostly part-time employer. I am now fulltime with bennies in their highest sales dept. It didn't take long for that to happen. I sell stupid expensive doors and windows for fun now. The wage they pay me is laughable compared to my previous employment, but I enjoy going to work because my efforts are recognized daily. I have a very good store manager if that isn't obvious.
HD measures EVERYTHING! It's more than annoying as an employee, but "what gets measured actually gets done". A JD exec shared that with me 30 years ago and he was right.
The shareholders demand higher same store sales and improved margins Q over Q. That concerns me as some prices are escalating at a scary pace. I've owned rental property for decades, and I'm a DIY guy so I know what I know on this matter. They are currently pushing the edge vs lower priced home improvement retailers locally. They need to be careful as customers are noticing it and I heard that plenty while manning a cash register. Pricing is NOT inelastic in the presence of competition. Menard's is the local threat as they sell lots of cheap product lines. Lowe's scares me zero in my local market. They offer a small raise to any trained HD employee. That comes off as a little desperate IMO. I'm good for now because I like how I am treated wearing an orange apron. Did I mention I enjoy the very frequent free food in the HD break room? It's an HD thing.
Now for my predictions because HD is about to report 4th quarter....
1. Christmas was OK, but not amazing.
2. Weather has been beyond horrible during Q1 2019 in the upper half of their regions (mostly a US company), and store traffic is affected in my small world. You can't do the winter outdoor construction that is normal in the Midwest. I am very curious about next Q guidance. I think all will be well by springtime. I won't be amazed if creative accounting is required to make Q4 look good. I listen to their conference calls and while boring, I find them honest for better or worse.
3. If HD blows earnings, look out on Lowe's because they are trying to be HD right now and falling short IMO.
No real actionable advice intended, but I will remain long HD and will keep covered calls in play for now because I don't see the stock launching on this earnings report.
I'll leave you with this. I may be very wrong in a few days, but I doubt I am wrong in a few months or years. I like this company a lot and that is why I applied to work there. They surely can't control macro-economics, but they sure control what they can control. I am extremely confident of that. This is the #5 employer in the US for a good reason.
I look forward to your thoughts if you follow HD.