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. So really thank you for being here.
Now 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. 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.
So thank you very much. It's also my pleasure to introduce our Board of Directors, Gerard Arpi, Ari Busby, Jeff Boyd, Frank Brown, Al Carey, Helena Fox, Linda Gooden Wayne Hewitt Manny Cadre Stephanie Leonardz and our Lead Director, Greg Brennaman. I also want to take this opportunity to recognize Armando Codina and Mark Badan, who are both stepping down from our Board today. Armando has been a member of our Board since 2007 and Mark joined in 2012, and we can't thank them enough for their service to The Home Depot and to our shareholders. And I'd like to have the members of our senior leadership team that are here today.
If you could please stand. I'd also like to recognize Hector Mohina and Scott Flynn from KPMG, the company's independent auditors. And finally, I'd like to introduce 2 members of my senior leadership team who are with me here on stage, Carol Tamay, our Chief Financial Officer and Executive Vice President of Corporate Services and Teresa Wynne Roseboro, Executive Vice President, General Counsel and Corporate Secretary. And 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 4 50% over her tenure and Earnings per share have increased 6.50%. 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. So Carol, We can't thank you enough for what you've done for Home Depot and for all of our stakeholders.
So thank you. We'll begin today's meeting with a 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 will provide a brief overview, and then we'll open up the floor for questions. So now, I officially call the 2019 Home Depot Annual Shareholder Meeting to order. Teresa is serving as our to the meeting and Broadridge Investor Communications Solutions is our Inspector of Elections.
As of March 25, 2019, which is the record date for this meeting, there were Approximately 1,100,000,000 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. Now if you have not voted yet and would like to vote today.
Please raise your hand so that we can give you a ballot and 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. And 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 1 on your ballot. The Board has nominated the individuals named in the proxy statement to serve for a 1 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 2 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 3 on your ballot. Specifically, you are being asked to approve the compensation of the company's named executive officers as closed in the proxy statement for this meeting. Your Board recommends that you vote for this proposal. The next item for consideration is the shareholders proposal regarding EE01 disclosures, which is item number 4 on your ballot.
And Ms. 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, members
of the Board and 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 4 on the ballot seeks a board review of our company's policies regarding disclosure of equal opportunity data known as EEO-one 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 mentioned in the resolution that Home Depot has paid out more than $100,000,000 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-one data, which offers investors a measurement tool. An EEO report is submitted annually by 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 1 year and then stopped. In the absence of meaningful disclosure, Investors cannot fully assess potential risk Home Depot faces nor for that matter fully identify successful diversity efforts. A number of companies make their EEO-one data available publicly. In 2015, the U.
S. Equal Employment Opportunity Commission reported that racial minorities comprise 37.2 percent of Private Industry Workforce, but just 14% of executives and management. We feel this is a bottom line issue In competitiveness and market share. We ask 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, and we ask you to vote in favor of stockholder proposal number 4.
Thank you. Your The Board recommends that you vote against this proposal. The next item for consideration is the shareholder proposal to reduce the threshold to call Special Shareholders Meeting to 10% of outstanding shares, which is item number 5 on your ballot. And Ms. Jack is the representative of Mr.
John Chiaveden, if you would please present the proposal.
Thank you.
Shareowners asked the Board of Directors to take the steps necessary to amend the governing documents to give the owners 10% of 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 of 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 shareowners 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 Edward Life Sciences and SunEdison in 2013.
A shareholder ability to call a special meeting would put shareholders in a position to give continuing input on improving the Board of Directors. For instance, Greg Brennaman, 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 and 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 percent 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 5.
Thank you, Ms. Jack. Your Board recommends that you vote against this proposal. The next item for consideration is the shareholder proposal regarding Preparation of a report on prison labor in the supply chain, which is item number 6 on your ballot. And 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 6 regarding a report on prison labor in the supply chain. As a consumer facing company, brand name and reputation are crucial to 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 exists 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 un Paid, forced punitive labor to work at his plastics company, Hendren Plastics, which 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, Hindren Plastics Dock Floats were sold by Home Depot despite our company's stated This example illustrates the problem that we see with responsible sourcing programs that neglect to review suppliers that manufacture in the United States.
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. And now if you have Any further outstanding balance? 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, PMG 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-one disclosure. Approximately 45% of the votes cast have voted in favor of the shareholder proposal to reduce the threshold to call special shareholder meetings. And 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 None of the shareholder proposals have been approved.
Please note that the balance collected at this meeting will be verified and
This concludes the formal business and I declare that the meeting is adjourned. And now we'll move on to an overview of our business after which will be happy to take questions that you may have. So 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. And I'm pleased to share with you our 2018 financial performance and our outlook for 2019.
But 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. So please take a moment to familiarize yourself with this chart. All right. So 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 $7,000,000,000 to $108,200,000,000 Our net earnings grew approximately $2,500,000,000 to $11,100,000,000 and our diluted earnings per share Rubai 33.5 percent to $9.73 Our company continues thank you, 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 from $2,000,000,000 of net debt issuances to invest $2,400,000,000 back into the business, Pay $4,700,000,000 of dividends to our shareholders and repurchase approximately $10,000,000,000 of our outstanding shares. The power of our company can be seen in our cash flow generation.
Now 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. So for fiscal 2019, we expect our sales to grow by approximately 3.3%.
Now 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 5 net new stores. For earnings per share. We expect fiscal 2019 diluted earnings per share to grow by approximately 3.1% to $10.03 And 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. And part of creating value for our shareholders is paying a dividend. In 2018, our quarterly dividend grew 15 point 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 5 years of approximately 167%.
And 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. So let's turn it back to Craig.
Thank you, Carol. 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 2 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. And 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 $11,000,000,000 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. On the 1st 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 asked us to reduce several pain points around store navigation, checkout, and 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. And 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 1300 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, 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 time cards and request time off from their mobile device. We also focused on empowering associates through new training and development opportunities. And 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 continue 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 while in the stores we are investing in designated pickup areas and lockers. This ongoing focus of our digital properties, which better conversion and increased sales. For fiscal 2018, online sales grew 24.1% versus the prior year and now represents 7.9% of our total sales.
According to Internet retailer, Home Depot is now the 7th 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 5 year $1,200,000,000 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 to 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 'nineteen as the year that we will 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. And while today's comments are U.
S. Centric, the capabilities that we have been discussing will to inform the investments that we make in Canada and Mexico as well. They are 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 And 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.
And with that, I thank you all very much for attending the meeting today. And 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. The and I would also like to thank Carol for the wonderful experience and a wonderful ride with her. And 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'd like to ask whether Home Depot has and I think that that would to a great extent improve the experience of first time customers and even older people.
Thank you.
Thank you for your comments. Just 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 to 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 want to have. But we continue to look at it and we look worldwide for that of Technology. Thank you.
Thank you. I'm Susan Melanie Levy. I don't have a question, but I would like to thank Mr. Blanc and Mr. Marcus.
I've worked as a reservation agent for Delta Airlines, to average salary. And because of the DRIP program, I was able to invest in Home Depot. I don't know how many years, I was When it first started and 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, but had it not been for Mr.
Blank and Mr. Marcus, I never would have been able to invest in Home Depot. And I want to thank for doing this for the average person who could not go out and buy a lot lump sum of stock.
Thank you very much for your comments. Appreciate it.
Thank you, Mr. Chairman. My name is Julian Martinez, and I represent Sera Jobs for Progress National. Sera National is a non profit of the organization assisting over 1,300,000 individuals a year with their employment, economic and educational needs. We would like to acknowledge Home Depot's role in investing and supporting the Latino community.
We would also like to acknowledge to the diversity Home Depot has in its Board of Directors and employees. If and when the time comes to replace Mr. Armando Codinez' position on your Board of Directors. We'd like to see him replaced with an Hispanic. We are sad to see him go.
He has done a great job. The Hispanic Association on Corporate Responsibility, Acer, has a corporate inclusion index that rates corporations in the areas of employment, procurement, Philanthropy and Governance. We would like to see Home Depot participate in next year's index. We believe it will help Home Depot become an even better company. Latinos currently comprise over 18% of the United States population.
And by 2,050, it is Predicted that Latinas will be 128,000,000 people, 29 percent of the population. There are approximately 4,400,000 Latino owned businesses in the United States that contribute more than $700,000,000,000 to the U. S. Economy. Hispanics in the U.
S. Represent over $1,500,000,000,000 in buying power, making our community the 7th 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 Home Depot will continue to reflect and represent Latinos. We have worked with Home Depot in the past and we'd 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. So thank you very much for your comments.
Hi, Gary. Hello, Craig. Hi, Steve. Hi, Steve. 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 Bill from Scratch. And Giles, if he's here, I'd like to get his signature this year. But 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 Bucks. My team. But I wanted to thank you guys make me feel so much like family when I come, Tim and Derek and everyone.
Lucie told me about I want to go visit the 1 Home Depot store that's all digital. After today, I'm going to go visit that. So thank you guys so much.
You bet.
Not too many years before I came to The Home Depot, I spent 2 weeks in a coma. So I'm developing as I come and talk to you guys. So you bear with me, please. I'm going to try not to say and like I did last year so much. But last year, I wanted to thank Mondo 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. So we'll wait and see. I'm hoping in 5 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.
Yes. They tell me that all the time. We've got many, many Regular customers 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 to President. Is that true?
Yes. I was asked to come and serve on a workforce council. Yes. I
I don't want to be congratulated for something that didn't happen. Thank you. Now, and 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, many fellow associates. You promised something that we would see in 2018. You mentioned it When we were seeing the slides and the only thing you mentioned was for the parental care extending that to men And women, so now men have that ability. But we didn't really see anything to benefit our pay for those of us who have been around a long time. And you quoted saying, I just list that's why I'm trying not to say, because I just listened to the tape on the way up here this morning.
Continue to be 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 and if you work here, the father can take time off for the child. I have a 16 year old and a 11 year old, and that would be very beneficial 11 to 16 years ago, which I was with Home Depot then. But we're not seeing any kind of pay increase. And I'm still hearing from fellow associates That the raises are still not there.
It's not that I'm gossiping, but everyone seems to know that I come to these shareholder meetings. Do you talk to people? Does people really listen? And 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. And you know what I'm talking about. But when they talk bad about Craig or Carol or whomever, our District Managers or Regional Managers, the Vice Presidents or whatever is going on with that. I say, they're not like that. That's not what we're trying to do as a company.
And I can't convince them of that when I say, Craig promised me in 2018, we're going to see something. And in 2018, we didn't see anything.
So 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 It's both the bereavement, the shortening of benefit requirement times that came into play. And we look at all levels of the company and engage in benchmarking in terms of our competitiveness on wage throughout the organization. And we look at that and 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. And the parental leave rose to the top and that was a huge investment for us as a company to be able to do that. We've received tremendous feedback.
And I'm proud to tell you, Gary, that our Voice of Associate scores are at Our highest levels ever and you know that we do that on a regular basis. We will continue to look at opportunities that were not done by any stretch of the imagination. We will continue to look for opportunities to invest in our associates as we move forward. So I really appreciate your thoughts and thoughts. Well, that's kind of
what you said last year though. And
I
can't believe that the associates did not say Who doesn't want more money? And that's what I hear from everyone.
Sure.
And I don't want to get in that argument.
No, I understand.
I apologize. Yes. But 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 'ninety two that Arthur and also have a memory of Arthur Arberny, authorizing a stock split, not that we're going to do that anymore, but in this building, not this room specifically 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. But, so things change, the meetings change, the stock changes, the way you handle it. But 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.
Jerry, I appreciate your comments. We will continue to evaluate and to continue to look at the markets in total. We do this on a market by market basis. So I really appreciate your input. Thank you.
Okay. Well, thank you for your time. Thank you.
Thank you, Mr. Chairman. Good morning, everyone. I'm Doctor. 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. Glu 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. So 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. So 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?
Sheila, 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 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. So Again, I thank you for your opinion, your passion and appreciate you're 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.
So 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 bad. And I had to work for my grades. So and it's just like the football teams you mentioned, Tampa Bay and all these losing teams.
Well, where I'm from, we have the Clemson Tigers.
And you
know what that means. But I'm here this morning not for a question to you, but 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. I mean, 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 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. So there's many things that Home Depot has in place, many good things. And I can tell you from being on the ground level at the store, It's there. Mrs.
Tomi, I've never met you before, but I know you. I know the name and it's all over Home Depot. And it's very sad that you're leaving, but I know the guy that's been appointed is going to do a great job. Mr. Blank, I've never met him, But he's a legend.
He's left a concept of how We should manage Home Depot and how we should manage the stores and the people. And when Mr. Menard put up there the people and 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, yes, you have to discipline 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. So today, I think you guys do a good job at The Home Depot, the leadership, The Board of Directors. In my opinion and based upon this, my first visit here, I think everybody here should give this Home Depot team a round of applause because you've done a great job.
Thank you.
All right.
I'm not an employee. Are you hiring? I mean Certainly.
After 30 years in 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. It's always 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%. So bittersweet, had to hold on to some being from Atlanta and seeing what this company has done.
My question is, I think, in the back of everyone's minds today, and that's to tariffs. And 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 Home Depot. So 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? But if you get hit with the 25%, which I assume a number of your Rex Wood.
How do you anticipate that hurting growth in sales going forward?
Sure. Thank you for your question. Couple of comments. First comment would be 70% of what we sell is local. So think about drywall, think about lumber, think about live goods, think about Dirt, mulch, all of that local product.
The 25% impact on tariffs We'll represent about 3.5 percent of our U. S. Purchases or about $1,200,000,000 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 10. We'll obviously work to handle that on a one off individual basis by product category with our suppliers. And an example of a tariff that went into place earlier and 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. And What we saw initially for the 1st several months was 0 impact at all.
Then we actually saw units go slightly negative. And then last quarter double digit growth in the business. The market absorbed it. So It is yet to be determined how this will ultimately all play out. But 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 As minimal impact on the customer as we possibly can. Thank you. And with that, I'd like to thank you all for being here today. And we will see do we have one more question?
Yes. Okay.
Very good. Mr. Robbins.
Thank you so much. This is real sweet. How are you? Bring down the microphone. My name is John Evans, and I represent a great deal and a great part of the community in this and the one thing we hear that resonates in our community, Good service, quality products.
And I think it's on top of our list Anywhere we go and however we set up, that's a quality situation that we must have. And furthermore, I think Home Depot is a quality, quality company. Give it a big hand.
Thank you. 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, and 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. And we appreciate that so much. Thank you.
Mr. Evans, it's great to hear.
Thank you. Great to see you again. All righty. And with that, I'll thank you all