Home Depot is moving aggressively to invest in its supply chain capabilities and store experience amid what it calls a "changing retail landscape."
The retailer announced a $15 billion share repurchase plan ahead of its 2017 Investor and Analyst Conference, where it also discussed key strategic priorities and discuss long-term financial targets.
The company set a target to grow annual sales to between $114.7 billion and $119.8 billion by the year ending January 2021.
"The retail landscape is changing at unprecedented rates and we plan to invest for the future to address the evolving needs of our customers. We will accelerate our investments, while continuing to focus on delivering the value our shareholders expect from The Home Depot," said Craig Menear, chairman, CEO and president.
The company outlined its strategic priorities as accelerating business investment over the next three years to enhance the customer experience, position itself for the future and create value for shareholders. Key focus points include:
- Enhancing the Customer Experience: The Company will highlight the various ways it is leveraging its physical and digital assets to keep pace with changing customer expectations, while continuing to balance the art and science of retail to consistently deliver innovative products at the best value for its customers.
- Positioning for the Future: The Company will describe the key investments it will make to position itself as "One Home Depot." Key areas of investment include stores, associates, the interconnected customer experience, and the Company's supply chain and delivery capabilities.
- Creating Value: The Company will address its approach to creating shareholder value by delivering higher returns on invested capital and increasing total value returned to shareholders in the form of dividends and share repurchases.
"Home Depot is investing from a clear position of strength (versus weakness/defensive) - very similar to what we have seen over the past decade from both Costco and Dollar Tree. And as we’ve seen with both retailers, such actions are clearly paying off in significant market share gains via sustainable traffic, and ultimately a higher valuation," said Chuck Grom, an analyst with Gordon Haskett.
Home Depot reaffirmed its guidance, and said it expects to report annual, per-share profits of $7.36 and same store sales gains of 6.5 percent.
Sales in the retailer's most recent quarter surged, thanks in part to rebuilding efforts after hurricanes in Texas and Florida, and wildfires affected the West.