While most retailers are worried about going up against Amazon, Home Depot isn’t one of them. In fact, its CFO believes it has barriers to protect it against the eCommerce giant.
In an interview with TheStreet, Home Depot’s CFO Carol Tomé said that she believes the company is safe against the power of Amazon.
Tomé revealed that the company saw 21.5 percent sales growth online last year, and that business now makes up 6.9 percent of its overall business. In addition, 46 percent of those sales were picked up inside of a store, which often resulted in the customer purchasing additional products.
She also pointed out that the home improvement giant is “not an item retailer. We are a project retailer. That is very different than selling consumable items. It’s just very different. We also help you when you have a problem. If your bathroom is leaking water, that’s a very different need than if you are trying to match a sweater to your eye color. And then housing is a good asset class. So do we have an Amazon-protected moat around our business? Of course not. But do we have barrier islands around our business? Yes, we do. Our job is to continue to invest in those barrier islands.”
As for future acquisitions, Tomé said that the company was open — depending on the circumstance. Late last year, there were reports that Home Depot was thinking about buying transportation, delivery and logistics services firm XPO. It was also rumored that Amazon was interested in acquiring XPO.
“As I look out on the landscape, if we see something out there that would make us better and the cost of acquiring it is cheaper than the cost of building it, then we will make a deal. It’s not like there is a long list of these,” said Tomé.
And it seems that rising mortgage rates aren’t worrisome to Tomé either.
“We don’t think it’s an issue right now. Our analysis suggests that for every 25 basis point increase in mortgage rates, it’s $40 of additional mortgage expense every month. We have a ways to go before we are concerned,” she said.