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Home Depot's (HD) New Distribution Centers to Meet Rising Demand

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In a bid to enhance customer’s shopping experience, The Home Depot, Inc. (HD - Free Report) opened three distribution centers in Baltimore, MD. With this, the company will operate five distribution centers across the state of Maryland. The latest development is likely to create 500 vacancies, including full and part-time jobs.

The move will expedite delivery options in the Baltimore region and meet the changing preference of customers. The company is also working to offer same-day and next-day delivery facilities for its Pro and DIY customers. Some other notable services include buy online pickup in store (BOPIS) with convenient pickup lockers, buy online deliver from store with express car and van delivery, and the curbside pickup.

The facility is part of Home Depot’s “One Home Depot” investment plan, which focuses on expanding supply-chain facilities, technology investments and enhancement to the digital experience. The interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters. Sales leveraging the digital platforms grew 27% year over year in the fiscal first quarter, with about 55% of the online orders being delivered from a store. Another key component of delivering an interconnected experience is enhanced delivery and fulfillment options.

Coming back to the news, Home Depot’s new facility is expected to fulfill online orders and provide a wider range of products with Baltimore being the key hub of the company’s delivery and supply-chain strategy. It also comes with a zero-emission hydrogen fuel cell charging station to power material handling equipment in a sustainable way.

Prior to this, the company opened a facility to offer oversized and bulk flatbed delivery directly to customers at their job sites along with a new delivery location to expand appliance delivery to Baltimore customers.

What’s More?

Home Depot has been witnessing spiked demand for repairs and home-remodeling projects like gardening to garage and organization from the back half of fiscal 2020 due to the increased stay-at-home trend. Strength in key outdoor categories with record sales for categories like planters and hardscapes as well as interior projects like countertops, vanities, blinds and home décor remain upsides.

Alongside this, the company’s Pro segment has been performing well. In the fiscal first quarter, Pro customers’ sales accelerated on a sequential basis and grew double-digits year over year. The company witnessed notable strength in pro customers, marking the fourth consecutive quarter of accelerated growth. It expects continued sales growth from Pros as project demand is strong and their backlogs are growing.

In the past three months, shares of this Zacks Rank #3 (Hold) stock gained 5.2% compared with the industry’s growth of 2.3%.


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However, increased penetration of lumber products in the company’s sales mix act as a deterrent for margins. Continued pressure from shrinks and higher transportation costs remain other concerns.

Better-Ranked Stocks in the Retail Space

DICK’S Sporting Goods (DKS - Free Report) presently has a Zacks Rank #2 (Buy) and an expected long-term earnings growth rate of 7.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tractor Supply Company (TSCO - Free Report) currently has a long-term expected earnings growth rate of 9.7% and a Zacks Rank #2.

Dollar General Corporation (DG - Free Report) , a Zacks Rank #2 stock at present, has an expected long-term earnings growth rate of 11.3%.

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