![This is Matt Reustle and today we are breaking down the home improvement giant, The Home Depot. We cover Home Depot's customer acquisition strategy, the difference between DIY builders and Pros, and what drove their decision to stop growing its store count.<br /><br />Our guest is Sean Stannard-Stockton of Ensemble Capital. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here: https://www.joincolossus.com/episodes/21920043/stannard-stockton-home-depot-the-pro-builders-choice<br /> <br />-----<br /> <br />This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.<br /> <br />-----<br /> <br />This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.<br /> <br />-----<br /> <br />Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.<br /> <br />Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.<br /> <br />Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt<br /> <br />Show Notes<br />[00:00:00] - Introduction<br />[00:03:10] - [First question] - What the customer strategy is for Home Depot and how it differs from Lowe’s<br />[00:05:28] - How the sales process works for a pro versus a DIY builder <br />[00:07:38] - The size of the addressable market and how much of it Home Depot controls<br />[00:08:47] - Home Depot’s history and its role in developing and growing their industry <br />[00:11:39] - When Home Depot was founded and their original go-to-market strategy <br />[00:13:38] - What drove their decision to stop expanding stores and honing their offering<br />[00:14:56] - Their revenue model and growth over time and the correlation between revenue and the housing market <br />[00:18:10] - How much revenue growth can be traced to in-store traffic and what’s driving it<br />[00:21:55] - Overview of their economic model as a whole<br />[00:23:42] - Their earnings profile and overall leverage compared to Lowe’s <br />[00:24:54] - How they position themselves for more of their business to be done online and thoughts on their CAPEX budget<br />[00:27:56] - Who Home Depot purchases from and how they navigated the pandemic<br />[00:37:09] - Thoughts about Home Depot’s growth over the next three to five years<br />[00:41:40] - How much historically there has been a growth lag after bubbles and crashes <br />[00:44:12] - Whether or not new home purchases and refinancing during the pandemic might impact Home Depot’s trajectory<br />[00:47:27] - Thoughts on Amazon potentially becoming a competitive threat<br />[00:49:37] - Other risks that are top of mind when thinking about Home Depot’s future<br />[00:53:51] - Lessons for investors and builders when studying Home Depot’s story<br /><br />#businessbreakdowns #homedepot #podcast](https://media.thebusinessprofessor.com/wp-content/plugins/youtube-feed-pro/img/placeholder.png)
This is Matt Reustle and today we are breaking down the home improvement giant, The Home Depot. We cover Home Depot’s customer acquisition strategy, the difference between DIY builders and Pros, and what drove their decision to stop growing its store count.
Our guest is Sean Stannard-Stockton of Ensemble Capital.
Show Notes
[00:00:00] – Introduction
[00:03:10] – [First question] – What the customer strategy is for Home Depot and how it differs from Lowe’s
[00:05:28] – How the sales process works for a pro versus a DIY builder
[00:07:38] – The size of the addressable market and how much of it Home Depot controls
[00:08:47] – Home Depot’s history and its role in developing and growing their industry
[00:11:39] – When Home Depot was founded and their original go-to-market strategy
[00:13:38] – What drove their decision to stop expanding stores and honing their offering
[00:14:56] – Their revenue model and growth over time and the correlation between revenue and the housing market
[00:18:10] – How much revenue growth can be traced to in-store traffic and what’s driving it
[00:21:55] – Overview of their economic model as a whole
[00:23:42] – Their earnings profile and overall leverage compared to Lowe’s
[00:24:54] – How they position themselves for more of their business to be done online and thoughts on their CAPEX budget
[00:27:56] – Who Home Depot purchases from and how they navigated the pandemic
[00:37:09] – Thoughts about Home Depot’s growth over the next three to five years
[00:41:40] – How much historically there has been a growth lag after bubbles and crashes
[00:44:12] – Whether or not new home purchases and refinancing during the pandemic might impact Home Depot’s trajectory
[00:47:27] – Thoughts on Amazon potentially becoming a competitive threat
[00:49:37] – Other risks that are top of mind when thinking about Home Depot’s future
[00:53:51] – Lessons for investors and builders when studying Home Depot’s story
#businessbreakdowns #homedepot #podcast