Good morning, everyone. Let me start by welcoming all of our shareholders today. We are so glad that you were able to join us this morning. I am pleased to also share with you that we will be going through our results for 2018 and our outlook for 2019. Really, thank you for being here. Before we start, I'd like to make a few introductions. First, it is a great honor to have one of our founders, Arthur Blank, here with us today. Arthur, thank you so much for being here. Thank you for help building an amazing company, and we are absolutely privileged to be able to continue to grow the business and live the values that you established for us in the business. Thank you very much.
It's also my pleasure to introduce our board of directors, Gerard Arpey, Ari Bousbib, Jeff Boyd, Frank Brown, Al Carey, Helena Foulkes, Linda Gooden, Wayne Hewett, Manny Kadre, Stephanie Linnartz, and our lead director, Greg Brenneman. I also want to take this opportunity to recognize Armando Codina and Mark Vadon, who are both stepping down from our board today. Armando has been a member of our board since 2007, and Mark joined in 2012. We can't thank them enough for their service to The Home Depot and to our shareholders. I'd like to have the members of our senior leadership team that are here today, if you could please stand. Thank you. I'd also like to recognize Hector Mojena and Scott Flynn from KPMG, the company's independent auditors. Finally, I'd like to introduce two members of my senior leadership team who are with me here on stage.
Carol Tomé, our chief financial officer and executive vice president of corporate services, and Teresa Wynn Roseborough, executive vice president, general counsel, and corporate secretary. Before I finish the introductions today, I'd really like to take a moment to express our sincere gratitude to Carol. As many of you know, Carol is retiring in August after 24 years with The Home Depot. She has successfully guided our financial performance through just about every cycle that you can think of, growth, recession, transformation, and now the interconnected world. Carol has truly been your advocate as a shareholder for shareholder returns, which have increased 450% over her tenure. Earnings per share have increased 650%. She has been a champion of our culture, our values. She has been a trusted partner and confidant. She leaves us in very good hands, but she will be sorely missed.
Carol, we can't thank you enough for what you've done for Home Depot and for all of our stakeholders. Thank you. We'll begin today's meeting with the formal business portion of the meeting, which consists of the election of the directors named in the proxy statement, the ratification of the auditors, and the consideration of both the company's and the shareholders' proposals. After that, Carol will join me, and we'll provide a brief overview, and then we'll open up the floor for questions. I officially call the 2019 Home Depot Annual Shareholder Meeting to order. Teresa is serving as our secretary of the meeting, and Broadridge Investor Communication Solutions is our inspector of elections. As of March 25th, 2019, which is the record date for this meeting, there were approximately 1.1 billion shares of the company's common stock entitled to vote.
A majority of these shares is needed for a quorum. Over 89% of these shares are represented here today, therefore, we have a quorum. If you have not voted yet and would like to vote today, please raise your hand so that we can give you a ballot. Then we will collect your ballots after all the proposals have been presented. If you have already voted, you do not have to vote again today. So now I will declare the polls open for voting. I believe everybody has a ballot. Anybody else need a ballot? Okay. The first item of business is the election of directors, which is item number one on your ballot. The board has nominated the individuals named in the proxy statement to serve for a one-year term through the 2020 annual meeting.
Your board recommends that you vote for each of these directors. The next item is the ratification of the appointment of KPMG as the independent auditors of the company for fiscal 2019, item number two on your ballot. Your board recommends that you vote for this proposal. The next item is the advisory vote on executive compensation, also known as Say on Pay, which is item number three on your ballot. Specifically, you are being asked to approve the compensation of the company's named executive officers, as disclosed in the proxy statement for this meeting. Your board recommends that you vote for this proposal. The next item for consideration is the shareholder's proposal regarding EEO-1 disclosures, which is item number four on your ballot. Will Miss Ivy Jack, as a representative of the Congregation of the Benedictine Sisters and other co-proponents, please step to the microphone and present the proposal.
Good morning, Mr. Chair.
Good morning.
Members of the board, shareholders who are gathered today. I am Ivy Jack, here today representing the Benedictine Sisters from Boerne, Texas. I also represent several members of the Interfaith Center on Corporate Responsibility, who are shareholders and co-filers to this proposal. These groups are long-term shareholders of The Home Depot. Proposal number four on the ballot seeks a board review of our company's policies regarding disclosure of Equal Opportunity data, known as EEO-1 data, and public reporting on diversity issues to shareholders. We received 48% of last year's proposal, the highest vote this proposal has ever received. Equal employment opportunity is an investment concern. When allegations of discrimination in the workplace burden shareholders with costly litigation and added risk to a company's brand, there is an impact to shareholder value. We contend descriptions don't go far enough to mitigate potential risk.
We mention in the resolution that The Home Depot has paid out more than $100 million to settle discrimination lawsuits over the past 17 years. Your reports do not give a chart identifying employees by gender and race in each of the EEOC-defined categories. This resolution focuses on the importance of measurement and disclosure of diversity issues to its shareholders. To manage diversity, companies have to be able to measure it. That is why we have asked for EEO-1 data, which offers investors a measurement tool. An EEO report is submitted annually by The Home Depot to the Equal Employment Opportunity Commission. Providing data to shareholders would not pose an additional financial burden. The company did provide information for one year and then stopped. In the absence of meaningful disclosure, investors cannot fully assess potential risk The Home Depot faces, nor, for that matter, fully identify successful diversity efforts.
A number of companies make their EEO-1 data available publicly. In 2015, the U.S. Equal Employment Opportunity Commission reported that racial minorities comprise 37.2% of private industry workforce, but just 14% of executives and management. We feel this is a bottom-line issue affecting competitiveness and market share. We ask The Home Depot to report diversity disclosure to all stakeholders. In the past, we met with the corporate secretary and others to offer a way forward and made concrete suggestions. We know you met with some shareholders after last year's vote and produced some graphs. We do not feel that this is not the same as publishing a public report from the data collected. Thank you for your time, we ask you to vote in favor of stockholder proposal number four.
Thank you. Your board recommends that you vote against this proposal. The next item for consideration is the shareholder proposal to reduce the threshold to call a special shareholders meeting to 10% of outstanding shares, which is item number five on your ballot. Ms. Jack, as the representative of Mr. John Chevedden, if you would please present the proposal.
Thank you.
Yes.
Share owners ask the board of directors to take the steps necessary to amend the governing documents to give the owners of 10% of the outstanding common stock the power to call a special share owner meeting. The current 25% stock ownership threshold for shareholders to call a special meeting may be unreachable due to time constraints and the detailed technical requirements that can trip up half of the shareholders who want a special meeting. Thus, the current 25% stock ownership threshold can be a 50% stock ownership threshold for all practical purposes. Special meetings allow share owners to vote on important matters, such as electing new directors, that can arise between annual meetings. This proposal topic won more than 70% support at Edwards Lifesciences and SunEdison in 2013.
A shareholder ability to call a special meeting would put shareholders in a better position to give continuing input on improving the board of directors. For instance, Greg Brenneman, Lead Director, had the longest tenure by far of any Home Depot director, 18 years. Long tenure can impair the independence of a director, no matter how well qualified. Independence is a priceless attribute in a director, especially a Lead Director. This proposal topic also won 44% support at the 2018 Home Depot annual meeting. This 44% support could have been 51% support if more shareholders had access to independent proxy voting advice. Any statement by Home Depot on the topic of this proposal is not independent proxy voting advice. Please vote yes, special shareholder meeting improvement proposal number five.
Thank you, Ms. Jack. Your board recommends that you vote against this proposal. The next item for consideration is the shareholder proposal regarding the preparation of a report on prison labor in the supply chain, which is item number six on your ballot. Ms. Jack, if you would please present the proposal on behalf of NorthStar Asset Management Fund Pension Plan.
Thank you.
Thank you.
Good morning. My name is Ivy Jack from NorthStar Asset Management in Boston, the beneficial owner of 33,301 shares of The Home Depot common stock. I am here to present proposal number six regarding a report on prison labor in the supply chain. As a consumer-facing company, brand name and reputation are crucial to The Home Depot's success and the company's ability to provide a return to our shareholders. We believe that shareholders deserve assurances that no instances of underpaid, forced, or exploitative labor exist in the company's entire supply chain, including in the United States. While our company has a responsible sourcing program, it is our understanding that the sourcing program's review excludes factories in the United States.
In 2017, news broke that Arkansas politician, State Senate Majority Leader Jim Hendren, was using unpaid, forced punitive labor to work at his plastics company, Hendren Plastics, which according to news articles, made dock floats for retailers, including The Home Depot. A recent investigation found that Hendren Plastics had a contract with a drug and alcohol recovery program where criminal offenders are sent in lieu of prison. It was revealed that, and I quote, "There was no treatment or counseling," and that the program participants, again, I quote, "Serve simply as free labor for private industry." Reports about this recent lawsuits against Hendren Plastics claims that the environment was very dangerous and that individuals who were injured on the job and couldn't work were sent back to prison. To our knowledge, Hendren Plastics dock floats were sold by The Home Depot despite our company's stated responsible sourcing program.
This example illustrates the problem that we see with responsible sourcing programs that neglect to review suppliers that manufacture in the U.S. We believe that a routine review for prison labor and forced labor in the entire Home Depot supply chain, including an evaluation of U.S. facilities, could have preemptively identified the Hendren Plastics situation, allowing Home Depot to remedy the situation proactively. We urge shareholders to vote in favor of this proposal to encourage the company to perform a thorough review of its supply chain to identify any instances of forced labor or prison labor connected to our company.
Thank you, Ms. Jack. Your board recommends that you vote against this proposal. Now, if you have requested a ballot, please mark your votes and sign where it is indicated. When you have finished, if you would please raise your hand, one of our volunteers will collect the ballots. Any further outstanding ballots? We're good? Okay. The ballots have been collected, and the polls are now closed. I would now ask Teresa to review the preliminary voting results.
Thank you, Craig. The preliminary voting results for the company proposals are as follows. All of the director nominees named in the proxy statement have been elected by a majority of the votes cast. Approximately 97% of the votes cast have voted in favor of the ratification of the appointment of KPMG, and approximately 97% of the votes cast have voted in favor of the compensation of the company's named executive officers. For the shareholder proposals, approximately 33% of the votes cast have voted in favor of the shareholder proposal regarding EEO-1 disclosure. Approximately 45% of the votes cast have voted in favor of the shareholder proposal to reduce the threshold to call special shareholder meetings. Approximately 30% of the votes cast have voted in favor of the shareholder proposal regarding a report on prison labor in the supply chain.
Based on the preliminary vote count, all of the nominees for the board of directors have been elected. The appointment of KPMG as the company's independent auditors for fiscal 2019 has been ratified, and a majority of the votes cast approved of our executive compensation. None of the shareholder proposals have been approved. Please note that the ballots collected at this meeting will be verified and tabulated by our Inspector of Elections, and final results of the vote will be available in a Form 8-K, which we will file next week.
This concludes the formal business, I declare that the meeting is adjourned. Now we'll move on to an overview of our business, after which we'll be happy to take questions that you may have. At this time, I'd like Carol to come up and begin with the financial review.
Thank you, Craig. Good morning, everyone. Let me start by welcoming our shareholders. We are glad that you could join us today. I'm pleased to share with you our 2018 financial performance and our outlook for 2019. Before I do that, I'd like to call your attention to this chart because some of our statements will be forward-looking or non-GAAP. Please take a moment to familiarize yourself with this chart. All right. With that, fiscal 2018 was a great year for The Home Depot, your company. We reported the highest sales and earnings in our company history. Looking at this chart, you can see that our sales grew over $7 billion to $108.2 billion. Our net earnings grew approximately $2.5 billion to $11.1 billion, and our diluted earnings per share grew by 33.5% to $9.73. Thank you.
Our company continues to generate strong cash flow. We have a disciplined and balanced approach when allocating our cash. In fiscal 2018, we generated approximately $13.1 billion of cash from the business and used that cash, as well as proceeds from $2 billion of net debt issuances to invest $2.4 billion back into the business, pay $4.7 billion of dividends to our shareholders and repurchase approximately $10 billion of our outstanding shares. The power of our company can be seen in our cash flow generation. Let's turn and look at our outlook for fiscal 2019. We believe that the U.S. home improvement market and macroeconomic backdrop are supportive of our business outlook. For fiscal 2019, we expect our sales to grow by approximately 3.3%. As a reminder, we are comparing 52 weeks of sales in 2019 versus a 53 week in 2018.
We expect total company comp sales to be up approximately 5%, and we're planning to open five net new stores. For earnings per share, we expect fiscal 2019 diluted earnings per share to grow by approximately 3.1% to $10.03. As Craig will detail, while we are accelerating strategic investments in our company, our capital allocation philosophy has not changed. In 2019, we will invest in our business to create strategic value, while at the same time remain focused for creating value for you, our shareholders. Part of creating value for our shareholders is paying a dividend. In 2018, our quarterly dividend grew 15.7%, and in February, our board announced a 32% increase in our quarterly dividend, which equates to $5.44 annually.
We are pleased that our business performance and our commitment to return value to our shareholders has yielded a total shareholder return over the last five years of approximately 167%. Before I turn it back over to Craig for his remarks, I would just like to say on a personal note, thank you for the honor of serving as your CFO. It has been a privilege and one I will never forget. Let's turn it back to Craig.
Thank you, Carol Tomé. Fiscal 2018 was an exciting year for our company as we began an accelerated investment program to create the One Home Depot vision that I shared with you last year and really position the business for long-term success. Let me begin by reminding you of our two primary objectives, to grow share with both our pro and our consumer, and to deliver shareholder value. As we move forward, these objectives do not change. While our objectives aren't changing, the increased customer demands and ever-changing retail environment requires us to step up our investment to position ourselves for the future. As a result, in 2018, we began a multi-year, approximately $11 billion investment program in our stores, our associates, our products, our interconnected digital experience, our supply chain, our delivery network, as well as our pro and services businesses.
This investment program is nearly double what we would have spent on a business as usual or a BAU environment. We made the decision to invest in the One Home Depot from a position of strength to ensure that we are delivering a best-in-class customer experience and continue our track record of delivering strong growth and strong returns to our shareholders. As I reflect on the first year of our investment journey, I'm happy to report that we are on track with our strategic priorities. Although it is early days and there's a lot of work ahead, I would like to take this opportunity to share with you some 2018 investment highlights. We believe that when a customer comes to one of our physical stores, it needs to be a great experience.
Our customers ask us to reduce several pain points around store navigation, checkout. We made great strides on this in 2018. We made solid progress rolling out our redesigned front-end areas to facilitate faster checkout. We added automated lockers that make picking up an online order easier and more convenient. At the end of fiscal 2018, approximately 1,000 stores have lockers, with more to come in 2019. We also implemented our enhanced wayfinding sign and store refresh package in nearly 1,300 stores ahead of our initial plan. Customer service in the categories of neat and clean and likelihood to shop again have consistently increased with the implementation of our navigation initiatives. At the conclusion of 2018, approximately 40% of our U.S. stores now have a new look and feel. These stores' investments aren't just about the customer response.
We are also seeing increased associate engagement and higher productivity. Turning to our associates, they are a key competitive advantage for us, and we can't sustain our customer experience that we strive to achieve to deliver without them. The company's culture, opportunity for career growth, competitive wage, and benefits are all part of attracting and retaining talent. Additionally, we are implementing tools that empower our associates to take care of our customers and generally make working at The Home Depot a better experience. In 2018, we enhanced our parental leave benefits, refreshed break rooms and training rooms. We introduced a new mobile app called Workforce Tools that allows our hourly associates to review schedules, track timecards, and request time off from their mobile device. We also focused on empowering associates through new training and development opportunities.
We're very proud to say that more than 90% of our store leaders began as hourly associates. Our associates are the heart of The Home Depot, and we will continue to invest in them. While our journey towards the One Home Depot vision does involve a great deal of change, our passion to maintain our position as the number one retailer and product authority for home improvement never will. In fiscal 2018, we continued to introduce a wide range of innovative new products to both our DIY and our pro customers while retaining focus on offering everyday values in our stores and online. We know that product is king and that the art side of the art and science of retail is still hugely important.
We intend to use our merchants to add value in a curated assortment across channels as this has been an effective competitive strategy for us over the years. We sell the same category of goods that many others sell, but we don't always sell the same products in those categories. Localization and speed to market are important, and we will invest to have a first-to-market approach. Our enhanced store and associate experience and our position as the product authority in home improvement are further complemented by our investments that we're making in the interconnected digital customer experience. In 2018, we continued to invest in our website, our mobile applications, improve search capabilities, site functionality, and product content. While in the stores, we're investing in designated pickup areas and lockers.
This ongoing focus of our digital properties, which fuels the interconnected experience, continues to yield improved customer satisfaction scores, better conversion, and increased sales. For fiscal 2018, online sales grew 24.1% versus the prior year and now represent 7.9% of our total sales. According to Internet Retailer, The Home Depot is now the seventh-largest e-commerce operation in the country. Delivering a best-in-class interconnected shopping experience encompasses more than our digital progress and physical store assets. As part of our investment program, we are committing a five-year, $1.2 billion investment in our supply chain to create the fastest, most efficient delivery network in home improvement. Our intent is to leverage the competitive advantage that we have built in our upstream network to build a competitive advantage in the downstream.
When finished, our expanded network will enable same-day, next-day delivery capability to 90% of the U.S. population for both parcel and big and bulky products. 2018 was the year of the pilot, as we began to test and learn with these new fulfillment centers. We are now live with a number of these pilot facilities, and we look to fiscal 2019 as the year that we'll begin to have learning from the pilots and begin to roll out with an expected completion by 2022. We made great strides in regards to our investment with the pro experience in 2018. We announced the consolidation of a go-to-market approach for our pro customers under the banner Home Depot Pro. We also continue to invest in the capabilities like delivery, tool rental, and our new B2B website experience that deepens our level of engagement with the pro customers.
We believe that the capabilities we are investing in will lead us to increased engagement. The more dimensional our relationship is with the pro, the more the pro spends with us. While today's comments are U.S.-centric, the capabilities that we have been discussing will inform the investments that we make in Canada and Mexico as well. They're facing the same changing retail environments that we have here in the U.S. We will lean into the supply chain, the digital experience, the creation of the interconnected One Home Depot experience in both countries as well. As we invest in the One Home Depot experience, I'd like to share with you what's not changing, and that is our culture. This year, we celebrate our 40th anniversary as a company. In 1979, our founders established the culture of The Home Depot.
It remains our foundation today, and I truly believe it is a competitive advantage. Our culture is represented by these two powerful symbols that you see here, our values wheel, which guides the decisions that we make in the business, and our inverted pyramid, which defines who is most important in our business, our customers, and our frontline associates. With that, I thank you all very much for attending the meeting today. At this time, I'd now be happy to take any questions that you may have.
Good morning, and thank you very much indeed, Craig, for your terrific performance over the last year. I would also like to thank Carol Tomé for the wonderful experience and a wonderful ride with her. I'm going to miss your handbag display year after year. It's always something that I look forward to. In order to be able to improve customer experience in the store, I would like to ask whether Home Depot has considered the use of robots as greeters in order to be able to direct customers to certain areas of the store, wherever they shop. I think that that would, to a great extent, improve the experience of first-time customers and even older people. Thank you.
No, thank you for your comments. We actually have looked at a lot of technology in terms of how we can continue to enhance the experience and free up our customers as much as possible to be able to assist customers in the aisle. Candidly, the technology as it relates to robotics or holograms isn't really quite there in our mind to be able to deliver on the customer experience that we wanna have. We continue to look at it, and we look worldwide for that technology. Thank you.
Thank you. I'm Susan Melanie Levy. I don't have a question, but I would like to thank Mr. Blank and Mr. Marcus. I've worked as a reservation agent for Delta Air Lines, average salary. Because of the DRIP program, I was able to invest in The Home Depot. I don't know how many years. I was when it first started. Because of this program was implemented, someone like me with an average salary could invest. Thank you. I'm getting good dividends, and I'm enjoying it. Had it not been for Mr. Blank and Mr. Marcus, I never would've been able to invest in The Home Depot. I want to thank them for doing this for the average person who could not go out and buy a lump sum of stock. Thank you.
Thank you very much for your comments. Appreciate it. Yes, sir.
Thank you, Mr. Chairman. My name is Julian Martinez. I represent SER Jobs for Progress National. SER National is a nonprofit organization assisting over 1.3 million individuals a year with their employment, economic, and educational needs. We would like to acknowledge The Home Depot's role in investing and supporting the Latino community. We would also like to acknowledge the diversity The Home Depot has in its board of directors and employees. If and when the time comes to replace Mr. Armando Codina's position on your board of directors, we'd like to see him replaced with a Hispanic. We are sad to see him go. He has done a great job. The Hispanic Association on Corporate Responsibility, HACR, has a corporate inclusion index that rates corporations in the areas of employment, procurement, philanthropy, and governance. We would like to see The Home Depot participate in next year's index.
We believe it will help The Home Depot become an even better company. Latinos currently comprise over 18% of the United States population, and by 2050, it is predicted that Latinos will be 120 million people, 29% of the population. There are approximately 4.4 million Latino-owned businesses in the United States that contribute more than $700 billion to the U.S. economy. Hispanics in the U.S. represent over $1.5 trillion in buying power, making our community the seventh largest economy in the world. With a growing Latino population and an increasing amount of Latino business owners in the United States, we know that The Home Depot will continue to reflect and represent Latinos. We have worked with The Home Depot in the past and would like to continue that relationship. We'd like to request a meeting with some of your senior executives to discuss a future working relationship. Thank you.
Thank you very much for your comments. We appreciate it, and we'd be happy to work with you. We are committed deeply to diversity in our company. We believe that it is important for us to represent the customer base that we serve, representing all customers, and the only way to do that is for our workforce to reflect that community. Thank you very much for your comments. Hi, Gary.
Hello, Craig.
Nice to see you.
Gary Patton, from store 1104. 27 years with The Home Depot.
Congratulations.
Thank you.
That's awesome.
Today, I thought I'd do something different. I've got my apron on that I was wearing yesterday. This is my regular apron, and a shirt for grand opening 1104, which Arthur, I'd like to welcome today and thank him for signing my copy of "Built from Scratch." Giles, if he's here, I'd like to get his signature this year. Thanks, Arthur, for all you've done. Great job, Atlanta United.
All right.
I could wish the Atlanta Falcons a great year to be second only next to Tampa Bay Buccaneers. That's my team. Wanted to thank you guys, make me feel so much like family when I come. Tim and Derek and everyone. This junk, Luke told me about, I want to go visit the One Home Depot store that's all digital after today. I'm going to go visit that, thank you guys so much.
You bet.
Not too many years before I came to The Home Depot, I spent two weeks in a coma, I'm developing as I come and talk to you guys. You bear with me, please. I'm going to try not to say "hum" and "um" like I did last year so much. Last year, I wanted to thank Armando also. He paid me a nice compliment after the shareholder meeting last year. Carol, we're going to miss you tremendously, like everyone's already said. I was able to speak with you before the meeting, and that was a blessing. Gave you a little prediction of mine, we'll wait and see. I'm hoping in five years we're going to be from number 7 in the digital thing to at least maybe a number 3. That would be nice.
It's a great job you're doing leading us all to go digital because everyone is. That's the way to go in the future, for sure.
Gary, our stores are still important to our customers, though.
Yes.
That is for sure.
Yeah, they tell me that all the time.
Yep.
Got many regular customers.
Yep
That tell me that. Congratulations to you. I understand back a couple of months ago, you met a kind of important man in a meeting. Maybe some might say the leader of the free world. I read that you had met the President. Is that true?
I was asked to come and serve on a workforce council, yes.
Yes. I didn't want to be congratulated for something that didn't happen.
Yes.
Thank you. I'm a legacy giver on The Homer Fund, so that was nice to find out. You all put that in my apron. You promised something last year about our benefits. I talked with many fellow associates. You promised something that we would see in 2018. You mentioned it when we were seeing the slides. The only thing you mentioned was for the parental care, extending that to men and women, so now men have that ability. We didn't really see anything to benefit our pay for those of us who have been around a long time. You quoted saying, that's why I'm trying not to say, because I just listened to the tape on the way up here this morning. Home Depot will continue to be competitive in wage and benefits.
I understand that you're going to make the benefit so that pregnant moms that are married, if you work here, the father can take time off for the child. I have a 16-year-old and an 11-year-old.
That would be very beneficial 11 to 16 years ago, which I was with Home Depot then. We're not seeing any kind of pay increase. I'm still hearing from fellow associates that the raises are still not there. It's not that I'm gossiping, everyone seems to know that I come to these shareholder meetings. Do you talk to people? Does people really listen? It bothers me when people have bad attitudes about you guys. Some people just have bad attitudes because that's their life. They have bad attitudes. You know what I'm talking about. When they talk bad about Craig or Carol or whomever, our district managers, our regional managers, the vice presidents, or whatever's going on with that, I say, "They're not like that.
That's not what we're trying to do as a company." I can't convince them of that when I say, "Craig promised me in 2018 we're going to see something." In 2018 we didn't see anything.
Gary, what we did is we actually went and looked at what were our feedback from our associates in terms of what are the things that they wanted the most, and what raised to the top in that was both the bereavement, the shortening of benefit requirement times that came into play. We look at all levels of the company and engage in benchmarking in terms of our competitiveness on wage throughout the organization. We look at that, we try to make the decisions based on where is the greatest need as it relates to making sure that we remain competitive in the marketplace, and how do we in fact respond to our associates' greatest ask, if you will. The parental leave rose to the top. That was a huge investment for us as a company to be able to do that.
We've received tremendous feedback. I'm proud to tell you, Gary, that our Voice of Associate scores are at our highest levels ever. You know that we do that on a regular basis. We will continue to look at opportunities, that we're not done by any stretch of the imagination. We will continue to look for opportunities to invest in our associates as we move forward. I really appreciate your thoughts and comments.
Well, that's kind of what you said last year, though.
Yeah
I can't believe that the associates did not say, who doesn't want more money? That's what I hear from everyone.
Sure.
I don't want to get in that argument with you.
Yeah, no. Sure. I understand.
I apologize.
Yep.
How could that not be a thing? Because people are leaving my store and going to work at Chick-fil-A and making more money. I remember the core values of this company when I started in early 1992, that Arthur, and I also have a memory of Arthur or Bernie, Arthur announcing a stock split, not that we're going to do that anymore, but in this building, not this room specifically.
Right
To hundreds of people and associates in aprons and chairs and yelling and screaming, and the party atmosphere that Arthur can remember that used to take place in these things. We were a young company then. Now we're a mature company.
Right.
Quote, quote. Things change. The meetings change, the stock changes the way you handle it. We're not the competitive Walmart is paying better. We're not the competitive company that we used to be. The customers, the associates were always first, and I don't see that now.
Gary, I appreciate your comments. We will continue to evaluate and continue to look at the markets in total. We do this on a market-by-market basis. I really appreciate your input. Thank you.
Okay. Well, thank you for your time.
Thank you.
Thank you, Mr. Chairman.
Yes.
Good morning, everyone. I'm Dr. Laura Shields, and I'm here on behalf of PETA, People for the Ethical Treatment of Animals. I have a question about the Home Depot sale of glue traps, which are among the cruelest devices on the market. Glue traps are rodent control devices that use an extremely strong adhesive to trap animals. Animals wander across them, and they become stuck. They panic and struggle, often tearing their flesh and breaking their bones as they try to free themselves. Some chew off their own limbs. The glue holds the live animals in place until they die, which is often days later from blood loss, suffocation, exhaustion. The Home Depot will not use glue traps in its own stores because they are so cruel, yet we continue to sell them.
It's difficult to reconcile why our company continues to profit off something that we've deemed too cruel to use in our stores. The Home Depot has taken steps to reduce consumer demand for them, but the fact that they remain on shelves for consumers to buy is unacceptable. The Home Depot cannot claim to source ethically while continuing to sell devices that are designed to cause prolonged agony simply because some customers still buy them. In fact, today's consumers are becoming increasingly focused on socially conscious issues, and they're looking to companies like ours to do the right thing. Glue traps account for a tiny fraction of our business. My question is this: given that Home Depot is well aware that the glue traps cause egregious suffering, when will the company live up to its mission to do things better every day and stop selling them?
Ms. Shields, thank you very much for your comment. We appreciate you being here again. As you know, we have a difference of opinion here. We offer a wide variety of product for our customers, and we do have customers who have small children and pets who believe that this is the best solution for them. Again, I thank you for your opinion, your passion, and appreciate you here.
Thank you.
Thank you.
Good morning. I'm Mike Davis from Greenville, South Carolina. Hope everybody's having a good day. I am a stockholder, I am a Home Depot employee, and I am a big Home Depot customer. I buy a lot of stuff at these stores. I'm on the ground at the store at Greenville, South Carolina, store 1119. I've came to this meeting this morning. It's the first time ever. Matter of fact, I know Gary. Matter of fact, Gary and I went to college together. The main difference between Gary and I is grades were easy for him because he's a personal guy, and he was good with the instructors. Teachers' pet. I had to work for my grades. It's just like the football teams he mentioned, Tampa Bay and all these losing teams. Well, where I'm from, we have the Clemson Tigers. You know what that means.
I'm here this morning not for a question to you, just to say that, hey, I'm impressed by this meeting today. It's my first visit. I'm very impressed with The Home Depot and how you guys did welcome me here. Everybody here is so friendly and so welcoming, and that atmosphere carried over into the store creates tons of sales for the store. When you showed your different things up here and the people talking about the different things, the EEO, I see it in the stores. I see it in the southeastern leadership of The Home Depot and the people who's in those management positions. I see it. When you talk about the things about the environment or protecting the animals and stuff, I see it in the stores.
We have an environmental policy not to let fertilizer or things like that get into the water to be able to be exposed to the groundwater. There's many things that The Home Depot has in place, many good things. I can tell you from being on the ground level at the store, it's there. Mrs. Tomé, I've never met you before, I know you. I know the name, and it's all over The Home Depot. It's very sad that you're leaving, I know the guy that's been appointed is going to do a great job. Mr. Blank, I've never met him, he's a legend. He's left a concept of how we should manage The Home Depot and how we should manage the stores and the people. When Mr. Menear put up there the people and the associates, I like that because it is about the people.
It's about the employees in the store. You have to keep them trained. You have to discipline. Yep, you have to discipline them if you have to. That's a part of it. You have to reward the employees, and most of all, you have to treat the employees consistent. Today, I think you guys do a good job at The Home Depot, the leadership, the board of directors. In my opinion, based upon this, my first visit here, I think everybody here should give this The Home Depot team a round of applause because you've done a great job. Thank you.
Appreciate it.
Thank you.
All righty.
I'm not an employee. Are you hiring?
Certainly.
After 30 years of HBO.
We've got our HR department here. We'll be happy to talk to you.
I worked for HBO for 30 years. I worked for a great company, too, so I'm very happy in retirement. As I told you, it's bittersweet when I come to these meetings because one of your predecessors, I don't know, 8, 10 years ago, I sold 95% of my stock when a CEO got a huge bonus and the shareholder stock price went down by 40%. Bittersweet. Had to hold onto some, being from Atlanta and seeing what this company's done. My question is, I think in the back of everyone's minds today, that's tariffs.
What I'd like to ask you, Craig, is it seems like if any company is going to be impacted from tariffs, it's going to be The Home Depot. Really, I know it's going to be hard to answer specific questions, but I guess up until now, how have the tariffs impacted you? Have you been able to absorb some of those costs? If you get hit with the 25%, which I assume a number of your products would, how do you anticipate that hurting growth and sales going forward?
Sure. Thank you for your question. Couple of comments. First comment would be 70% of what we sell is local. Think about drywall, think about lumber, think about live goods, think about dirt, mulch, all of that local product. The 25% impact on tariffs will represent about 3.5% of our U.S. purchases, or about $1.2 billion of cost pressure. We're working through that. It won't actually begin to impact us for another few weeks. It's goods that shipped from China on May 10th. We'll obviously work to handle that on a one-off individual basis by product category with our suppliers. An example of a tariff that went into place earlier, this is where we're still working through what will the impacts really be. Laundry, for example, had a tariff that went in place some time ago.
What we saw initially for the first several months was zero impact at all. We actually saw units go slightly negative. Last quarter, double-digit growth in the business. The market absorbed it. It is yet to be determined how this will ultimately all play out. What I can tell you is we will use our leverage, we will use our size, we will use our merchants' capability to manage through line structures to try to have as minimal impact on the customer as we possibly can.
Thank you.
Thank you. With that, I'd like to thank you all for being here today, and we will see Do we have one more question? Yeah. Okay. Very good. Mr. Evans.
Thank you so much. This is real sweet.
How are you?
Bringing down the microphone. My name is John Evans. I represent a great deal and a great part of the community in this area, in the Black community. The one thing we hear that resonates in our community, good service, quality products, and I think that's on top of our list. Anywhere we go and however we set up, that's a quality situation that we must have. Furthermore, I think Home Depot is a quality company. Give it a big hand.
Thank you.
We appreciate you. We appreciate all that you do, and we hear the words so clearly in our community that you're a good company. I think we're on the right track. We're very competitive, and we owe a lot to our community, and I think you give that to our community. We appreciate that so much. Thank you.
Mr. Evans, it's great that you're here. Thank you. Great to see you again. All righty. With that, I'll thank you all