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Home Depot : Improvement Retailers Scramble to Restock in Florida

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09/11/2017 | 06:14pm CEST
By Sarah Nassauer 

Home Depot Inc., Lowe's Cos. and other home-improvement retailers are rushing supplies into Florida in Irma's wake, an effort critical to rebuilding efforts as well as their quarterly sales.

Big-box retailers have become increasingly intertwined with recovery efforts after natural disasters, working to restock supplies for local residents, first responders and area officials. Both Lowe's and Home Depot have access to vast supplies of building materials, power generators and other needed products, as well as the infrastructure to keep them in stock.

Home Depot and Lowe's shares rose around 4% over the last two weeks as investors anticipated upticks in hurricane-related sales.

"We utilize our entire supply chain because speed is so important to help communities restore," said Peter Capel, vice president of field merchandising for Home Depot.

Earlier in the year, the Atlanta-based retailer preloaded trucks and stocked four distribution centers near hurricane-prone areas with generators, plywood, water and cleaning supplies, so that it could resupply local stores before and after storms, Mr. Capel said. A former Marine, Mr. Capel pushed for police escorts for trucks to expedite their movement past barricades.

In southern Florida, Home Depot stores began reopening Monday morning, selling supplies built up before Irma arrived, but trucks coming from other parts of the U.S. haven't yet made it into the state, according to a spokesman.

Storms tend to boost the bottom line for home-improvement retailers, Baird Equity Research said in a research note last week. "This all depends on how many stores are impacted, and what the severity of the damage is, but it tends to be a positive impact nonetheless" that can last up to a year as rebuilding projects get under way.

Both Lowe's and Home Depot said they don't raise prices during disasters and have price-freeze policies in place. Some airlines faced criticism and price-gouging complaints as people in Florida and the Caribbean evacuated.

Lowe's is deemed part of "restoration and recovery" in most U.S. states, a classification that lets its trucks drive into storm-struck areas before citizens, said Rick Neudorff, emergency command center operations manager for the Mooresville, N.C., retailer. "A good portion of my responsibility outside of storm response, when it's slow, is to build a relationship with those people," Mr. Neudorff said.

Lowe's was able to deliver supplies to its stores in northern Florida until Sunday. It also shifted routes so that more of its trucks headed to the western part of the state, in line with Irma's trajectory.

Like Home Depot, Lowe's stocked Florida stores and distribution centers with supplies like plywood, storm shutters, water and gas cans, and it expects to send more than 500 truckloads into the state over the next 48 hours, including some that arrived early Monday, a spokeswoman said. Some Lowe's stores are expected to reopen later in the day.

The risk of damage to stores prestocked with extra inventory "is part of the cost of doing business," said Mr. Neudorff, adding that the retailer builds stores in areas outside of known floodplains.

In Texas, Harvey damaged three Lowe's stores, one significantly. The one-two punch of Harvey and Irma in the South created "natural choke points," Mr. Neudorff said.

Generators will be in demand with mass power outages, he said. "There are only so many bottled-water manufacturers, and everyone's pulling back-to-back orders."

Write to Sarah Nassauer at [email protected]

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Financials ($)
Sales 2018 99 839 M
EBIT 2018 14 627 M
Net income 2018 8 673 M
Debt 2018 22 388 M
Yield 2018 2,20%
P/E ratio 2018 22,36
P/E ratio 2019 19,72
EV / Sales 2018 2,15x
EV / Sales 2019 2,05x
Capitalization 193 B
Duration : Period :
Home Depot (The) Technical Analysis Chart | HD | US4370761029 | 4-Traders
Technical analysis trends HOME DEPOT (THE)
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 32
Average target price 170 $
Spread / Average Target 4,3%
EPS Revisions
Craig A. Menear Chairman, President & Chief Executive Officer
Carol B. Tomé Chief Financial Officer & EVP-Corporate Services
Matthew A. Carey Chief Information Officer & Executive VP
Paul J. Gaffney Senior Vice President-Information Technology
Gregory D. Brenneman Lead Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
HOME DEPOT (THE)21.89%192 654
LOWE'S COMPANIES12.54%66 658
KINGFISHER-13.39%8 685
KOMERI CO LTD28.26%1 624