What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-03-13 compared with 2023-03-15 · 132 added, 146 removed, 236 unchanged (54% of the section changed)

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Our telephone number at that address is (770) 433-8211.

The retail landscape has changed rapidly over the past several years, with customer expectations constantly evolving.

In fiscal 2022, we continued to operate with agility to meet the challenges created by a fluid domestic and global business environment, including supply chain disruptions, tight labor market conditions, and ongoing inflationary pressures.

Our ability to operate successfully and meet the needs of our customers was due in significant part to our investments over the past several years aimed at creating an interconnected, frictionless shopping experience that enables our customers to seamlessly blend the digital and physical worlds.

Going forward, we will leverage the momentum of these investments and continue to invest in our business in support of the following goals:

• We intend to provide the best customer experience in home improvement;

The retail landscape has changed rapidly over the past several years, with a complex macroeconomic environment and customer expectations continually evolving.

In fiscal 2023, we experienced a year of moderation after the unprecedented growth of the prior three years, as we navigated the continued shift in consumer consumption trends away from goods and towards services and the impact of a rising interest rate environment.

Our ability to operate successfully and meet the needs of our customers in an efficient and cost-effective way was due in significant part to our investments over the past several years aimed at creating an interconnected, frictionless shopping experience that enables our customers to seamlessly blend the digital and physical worlds.

Going forward, we will continue to leverage the momentum of these investments and invest in our business in support of the following goals:

• We intend to provide the best customer experience in home improvement and develop differentiated capabilities for our customers;

• We intend to extend our position as the low-cost provider in home improvement;

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• First, we intend to reinvest in our business to drive growth faster than the market.

• Second, after meeting the needs of the business, we look to pay a quarterly dividend, which we intend to increase as we grow earnings.

• Second, after meeting the needs of the business, we look to pay a quarterly dividend.

• Third, after reinvesting in our business and paying our dividend, we intend to return excess cash to our shareholders through share repurchases.

In fiscal 2023, we invested $3.2 billion in capital expenditures to support our business, advance our goals, and continue to build an interconnected customer experience.

We also focused on driving productivity throughout the business to lower our costs.

The combination of reinvesting in the business to drive higher sales and supporting productivity to lower costs creates what we refer to as a virtuous cycle, which has allowed us to improve the customer experience, increase our competitiveness in the market, and deliver shareholder value.

We also focused on driving productivity throughout the business by lowering our product and transportation costs and initiating a plan to reduce our fixed cost structure by approximately $500 million, which we expect will be realized in fiscal 2024.

The combination of reinvesting in the business to drive higher sales and supporting productivity to lower costs allows us to improve our customer experience, increase our competitiveness in the market, and deliver shareholder value.

Fiscal 2023 Form 10-K

In fiscal 2023, we returned over $16 billion to shareholders in the form of cash dividends and share repurchases.

Our capital allocation is discussed further in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Fiscal 2022 Form 10-K 1

Management’s Discussion and Analysis of Financial Condition and Results o f Ope ration s .

OUR CUSTOMERS

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We also offer a variety of clinics and workshops both to share this knowledge and to build an emotional connection with our DIY customers.

As the preferences and behaviors of our DIY customers are changing, we are investing in capabilities to better serve the needs of those customers.

Professional Customers (or “Pros”)

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These customers build, renovate, remodel, repair, and maintain residential properties, multifamily properties, hospitality properties, and commercial facilities, including education, healthcare, government, institutional, and office buildings.

We have a number of initiatives designed to drive growth with our Pros, including a customized online experience, a dedicated sales force, an extensive delivery network, our Pro Xtra loyalty program, enhanced credit offerings, and inventory management programs.

Building on our historical strength as a destination for urgent purchase needs, we are investing in capabilities that will help us better serve our Pros’ planned purchase needs (in-store or via our dedicated sales team), including our expanded supply chain capabilities and advance ordering through our interconnected digital platforms.

We believe that focusing on meeting the Pros’ planned purchase needs, particularly for larger renovator/remodeler Pros, will help us drive growth and deliver value to our shareholders.

We extended our reach in the MRO marketplace with our fiscal 2020 acquisition of HD Supply, a leading national distributor and provider of MRO products and related value-added services to multifamily, hospitality, healthcare, and government housing facilities, among others, and in fiscal 2021 we integrated our legacy Interline Brands business into HD Supply.

We have a number of initiatives designed to drive growth with Pros, including those working on both simple and complex projects.

We remain focused on providing a customized online experience, a dedicated sales force, a broad assortment of Pro-focused products and brands, an extensive delivery network, our Pro Xtra loyalty program, and enhanced credit offerings.

Building on our historical strength as a destination for urgent purchase needs, we are investing in differentiated capabilities that will help us better serve our Pros’ complex purchase needs, including expanded supply chain capabilities, additional trade credit offerings, more showroom space, and an enhanced order management system.

We serve the MRO marketplace through our subsidiary HD Supply, a leading national distributor and provider of MRO products and related value-added services to multifamily, hospitality, healthcare, and government housing facilities, among others.

Our MRO operations use a distribution center-based model that sells products primarily through a professional sales force and through e-commerce platforms and print catalogs.

We recognize the great value our Pros provide to their clients, and we strive to make their jobs easier and help them grow their businesses.

In October 2023, we announced changes to our leadership structure, aligning our outside sales and service business with our global store organization to better serve our Pros by leveraging our full ecosystem and newest capabilities.

We recognize the great value our Pros provide to their clients, and we strive to make their jobs easier and help them grow their businesses, from expanded capabilities to improve their business and customer experience to the Path to Pro network we are building for Pros to connect with jobseekers to help address the skilled labor shortage.

We believe that investments aimed at deepening our relationships with our Pros are yielding increased engagement and will continue to translate into incremental sales to these customers.

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Our online product offerings complement our stores by serving as an extended aisle, and we offer a significantly broader product assortment through our websites and mobile applications, including homedepot.com, our primary website;

homedepot.ca and homedepot.com.mx, our websites in Canada and Mexico;

homedepot.ca and homedepot.com.mx, our websites in Canada and Mexico, respectively;

hdsupply.com, our website for our MRO products and related services;

blinds.com, our online site for custom window coverings;

and thecompanystore.com, our online site featuring textiles and décor products.

our websites for custom window coverings including blinds.com, justblinds.com and americanblinds.com;

and thecompanystore.com, our website featuring textiles and décor products.

Fiscal 2023 Form 10-K

We believe our merchandising organization is a key competitive advantage, delivering product innovation, assortment and value, which reinforces our position as the product authority in home improvement.

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To help our merchandising organization keep pace with changing customer expectations and increasing desire for innovation, localization, and personalization, we are continuing to invest in tools to better leverage our data and drive a deeper level of collaboration with our supplier partners.

As a result, we have continued to focus on enhanced

Fiscal 2022 Form 10-K 2

merchandising information technology tools to help us:

As a result, we have continued to focus on enhanced merchandising information technology tools to help us:

(1) build an interconnected shopping experience that is tailored to our customers’ shopping intent and location;

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and (3) optimize our product assortments.

Our merchandising team leverages technology and works closely with our inventory and supply chain teams, as well as our supplier partners, to manage our assortments, drive innovation, and adjust inventory levels to respond to fluctuations in demand, which helped us navigate the challenges of continuing global supply chain disruption in fiscal 2022.

As cost pressures have risen in several product categories in the current environment, our tools have helped our merchandising, finance and data analytics teams as they work with our supplier partners to manage these pressures.

Our merchandising team leverages technology and works closely with our inventory and supply chain teams, as well as our supplier partners, to manage our assortments, drive innovation, manage the cost environment, and adjust inventory levels to respond to fluctuations in demand.

To complement our merchandising efforts, we offer a number of services for our customers, including installation services for our DIY and DIFM customers, as noted above.

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and Canada, providing value and convenience for both Pros and consumers.

To improve the customer experience and continue to grow this differentiated service offering, we are continuing to invest in more locations (including piloting rental locations in Mexico), more tools, and better technology.

To improve the customer experience and continue to grow this differentiated service offering, we are continuing to invest in more locations (including continuing to pilot rental locations in Mexico), more tools, and better technology.

Sourcing and Quality Assurance

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Under our supplier contracts, our suppliers are obligated to ensure that their products comply with applicable international, federal, state and local laws.

These contracts also require compliance with our responsible sourcing standards, which cover a variety of expectations across multiple areas of social compliance, including supply chain transparency, compliance with local laws, health and safety, environmental laws and regulations, compensation, hours of work, and prohibitions on child and forced labor.

These contracts also require compliance with our responsible sourcing standards, which cover a variety of expectations across multiple areas of social compliance, including supply chain transparency, compliance with applicable laws and regulations addressing prohibitions on child and forced labor, health and safety, environmental matters, compensation, and hours of work.

To drive accountability with our suppliers, our standard supplier buying agreement includes a factory audit right related to these standards, and we conduct factory audits and compliance visits with non-Canada and non-U.S.

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COMPETITION AND SEASONALITY

Our industry is highly competitive, very fragmented, and evolving.

Our industry is highly competitive, fragmented, and evolving.

As a result, we face competition for customers for our products and services from a variety of retailers, suppliers, service providers, and distributors and manufacturers that sell products directly to their respective customer bases.

These competitors range from traditional brick-and-mortar, to multichannel, to exclusively online, and they include a number of other home improvement retailers;

Fiscal 2023 Form 10-K

regional and national hardware stores;

electrical, plumbing and building materials supply houses;

and lumber yards.

With respect to some products and services, we also compete with specialty design stores, showrooms, discount stores, local, regional and national hardware stores, paint stores, specialty and mass digital retailers, warehouse clubs, independent building supply stores, MRO distributors, home décor retailers, and other retailers, as well as with

Fiscal 2022 Form 10-K 3

providers of home improvement services and tool and equipment rental.

With respect to some products and services, we also compete with specialty design stores, showrooms, discount stores, paint stores, specialty and mass digital retailers, warehouse clubs, MRO distributors, home décor retailers, and other retailers, as well as with providers of home improvement services and tool and equipment rental.

The internet facilitates competitive entry, price transparency, and comparison shopping, increasing the level of competition we face.

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We also compete based on store location and appearance, presentation of merchandise, and ease of shopping experience.

Our Pros also look for a dedicated sales team, competitive credit and pricing options, project planning tools, and product depth and job lot quantities, particularly for their planned purchase needs.

Furthermore, with respect to delivery options, customers are increasingly seeking faster and/or guaranteed delivery times, low-price or free shipping, and/or convenient pickup options.

Our Pros also look for dedicated sales support, competitive credit and pricing options, project planning tools, and product depth and job lot quantities, particularly for their complex purchase needs.

Furthermore, with respect to delivery options, customers are seeking faster and/or guaranteed delivery times, low-price or free shipping, and/or convenient pickup options.

Our ability to be competitive on delivery and pickup times, options and costs depends on many factors, including the success of our supply chain investments, described more fully under “Our Supply Chain” below.

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Digital Experience

Enhancements to our digital properties are critical for our increasingly interconnected customers, who often research products online and check available inventory before going into one of our stores to view the products in person or talk to an associate and then make their purchase in store or online.

Enhancements to our digital properties are critical for our increasingly interconnected customers, who often research products and check available inventory online before going into one of our stores to view products in person or talk to an associate and then making their purchase either in store or online.

While in the store, customers may also go online to access ratings and reviews, compare prices, view our extended assortment, and purchase additional products.

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Mobile customers expect more simplicity and relevancy in their digital interactions.

As a result, we have made investments to our digital properties to improve the overall presentation and ease of navigation for the user.

As a result, we have made investments in our digital properties to improve the overall presentation and ease of navigation for the user.

We have also enhanced the “shopability” of an online product by including more information on the product’s landing page, including related products and/or parts of a collection, as well as various fulfillment options.

We believe our focus on improving search capabilities, site functionality, category presentation, product content, speed to checkout, and enhanced fulfillment options has yielded higher traffic, better conversion and continued sales growth.

We believe our focus on improving search capabilities, site functionality, category presentation, product content, speed to checkout, and fulfillment options has yielded higher traffic, better conversion and continued sales growth.

Further, we do not view the interconnected shopping experience as a specific transaction;

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Customers expect more personalized messaging, so we are continuing to focus on connecting marketing activities with the online and in-store experiences to create seamless engagement across channels.

From the inspirational point of the purchase journey to providing product know-how, we continue to invest in the infrastructure and capabilities needed to deliver the most relevant marketing messages to our customers based upon what is important to them today.

Store Experience

Our stores remain the hub of our business, and we continue to invest to improve the customer shopping experience through easier navigation and increased convenience and speed of checkout.

In fiscal 2022, we continued to leverage the investments made in our stores over the past several years to operate effectively and meet changing customer expectations.

These investments include wayfinding signage and store refresh packages;

self-service lockers, online order storage areas at front entrances and curbside pickup to provide convenient pickup options for online orders;

In fiscal 2023, we continued to leverage the investments made in our stores over the past several years to operate effectively and meet customer expectations.

These investments included wayfinding signage and store refresh packages;

self-service lockers, online order storage areas and curbside service to enable convenient online order pickup options;

electronic shelf label capabilities;

and the re-design of front-end areas, including reconfigured service desks, improved layouts in checkout areas, and expanded and enhanced self-checkout options.

To improve the customer’s experience in our stores, we have also empowered our customers with additional self-help tools, including mobile app-enabled store navigation.

We have also empowered our customers with additional self-help tools, including mobile app-enabled store navigation.

Our app provides store-specific maps, which allow customers to pinpoint the exact location of an item on their mobile devices.

We believe these investments are driving higher customer satisfaction scores, and we will continue to invest to improve the customer experience going forward.

Investing in Associate Productivity.

We continually strive to improve our store operations for our associates.

Our goal is to remove complexity and inefficient processes from the stores to allow our associates to focus on our customers.

To this end, we have continued to focus our efforts in such areas as optimizing product flow to decrease the amount of time a store associate spends locating product and to improve on-shelf product availability;

Finally, we have also invested in compensation enhancements for our front-line associates, which we believe are contributing to lower attrition, increased associate engagement, and fewer safety incidents in our stores.

We believe these investments

Fiscal 2023 Form 10-K

simpler order management system;

are driving higher customer satisfaction scores, and we will continue to invest to improve the customer experience.

In addition, we have identified areas that have experienced significant population growth or where market voids exist, and in fiscal 2023 we initiated a plan to open approximately 80 new stores over a five-year period to address those opportunities.

These new stores will help relieve pressure at existing high-volume stores and add stores in areas with less store coverage, helping us to improve the customer experience and drive revenue growth.

Investing in Associate Productivity.

We continually strive to improve our store operations to remove complexity and inefficient processes, allowing our associates to spend more of their time serving our customers.

To this end, we have continued to focus on process improvements like optimizing product flow to improve on-shelf product availability and thus decrease the amount of time store associates spend locating products;

creating a simpler order management system;

expanding in-aisle, real-time mobile learning tools for our associates’ own development and to assist with customer questions;

and using labor model tools to better align associate activity with customer needs.

For several years, our associates have used web-enabled handheld devices to help them more efficiently meet the needs of the business and serve customers.

In fiscal 2022, we began rolling out the next generation of digital phones to our stores, which we call “hdPhones,” so that each associate will have a digital device during their shift.

The new devices offer enhanced functionality to allow associates to readily query inventory, access applications that support customer service, and drive on-shelf availability of product.

For a number of years, our associates have used web-enabled handheld devices to help them more efficiently meet the needs of the business and serve customers.

Our current generation of these digital “hdPhone” devices offers enhanced functionality that allows associates to readily query inventory, access applications that support customer service, and assist with locating products.

Our hdPhones also give our U.S.

store associates access to Sidekick, an application that directs associates to bays where product is low or out of stock and helps our associates prioritize the highest value tasks more effectively.

To further support productivity, in fiscal 2023 we rolled out Computer Vision in our U.S.

stores, which provides greater visibility into where product is located, including both on the shelves and in the overhead space, enabling strategically-directed tasking and improving on-shelf availability.

Investing in Safety.

We are committed to maintaining a safe shopping and working environment for our customers and associates.

We empower trained EH&S associates to evaluate, develop, implement and enforce policies, processes and programs on a Company-wide basis.

Our EH&S policies are woven into our everyday operations and are part of The Home Depot culture.

Common program elements include daily store inspection checklists (by department);

routine follow-up audits from our store-based safety team members and regional, district and store operations field teams;

equipment enhancements and preventative maintenance programs to promote physical safety;

departmental merchandising safety standards;

training and education programs for all associates, with varying degrees of training provided based on an associate’s role and responsibilities;

and awareness, communication and recognition programs designed to drive operational awareness and an understanding of EH&S matters.

We remain committed to maintaining a safe shopping and working environment for our customers and associates.

We accomplish this by creating a strong culture of safety, building on our core value of Taking Care of Our People, that starts from the top with engaged leaders who empower associates to make decisions that prioritize the safety of everyone.

We use data to identify areas of greatest risk, including emerging risks, and invest in tools, equipment and technology to reduce those risks in our packaging, processes, and behaviors.

Our associate training and awareness initiatives target individual roles and responsibilities, integrating with overall strategies that promote physical and psychological safety and mental wellness.

We empower trained EH&S associates to continuously evaluate, develop, implement and enforce policies, processes and programs in our stores, facilities and offices across the Company.

Our EH&S policies are woven into our everyday operations for site, district and regional teams, and integrate with operating platforms to provide safety line-of-sight to all leaders and associates.

Common program elements include daily store inspection checklists;

routine follow-up audits from our store-based safety team members;

preventative maintenance programs to promote equipment and physical space safety;

and departmental merchandising safety standards.

OUR SUPPLY CHAIN

We continue to focus on building best-in-class competitive advantages in our supply chain to be responsive to our customers’ expectations for how, when and where they choose to receive our products and services.

As part of enhancing the interconnected shopping experience, we continue to invest in expanding our supply chain network, with the goal of achieving the fastest, most efficient and most reliable delivery capabilities in home improvement.

As part of enhancing the interconnected shopping experience, we continue to invest in our supply chain network, with the goal of achieving the fastest, most efficient and most reliable delivery capabilities in home improvement.

Our efforts are focused on ensuring product availability and increasing the speed and reliability of delivery for our customers while managing our costs.

Our supply chain investments have helped us to operate effectively and meet our customers’ needs throughout the challenging environment over the past few years.

Our supply chain investments have helped us to operate effectively and meet our customers’ needs, even with the challenging environment over the past few years.

We centrally forecast and replenish the vast majority of our store products through sophisticated inventory management systems and utilize our network of distribution centers to serve both our stores’ and customers’ needs.

Our supply chain includes multiple distribution center platforms in the U.S., Canada, and Mexico tailored to meet the needs of our stores and customers based on types of products, location, transportation, and delivery requirements.

These platforms include rapid deployment centers, stocking distribution centers, bulk distribution centers, and direct fulfillment centers, among others.

As part of the expansion of our supply chain, we have invested to further automate and mechanize our rapid deployment center network to drive efficiency and faster movement of product.

We are also continuing to expand our fulfillment network, investing in a significant number of new fulfillment facilities to drive speed and reliability of delivery for our customers and to help us ultimately meet our goal of reaching 90% of the U.S.

population with same or next day delivery for extended home improvement product offerings, including big and bulky products.

These facilities include omni-channel fulfillment centers, which deliver product directly to customers, and market delivery operations, which function as local hubs to consolidate freight for dispatch to customers for the final mile of delivery, with a focus on appliances.

In fiscal 2022, we realized our goal to control more of our appliance delivery end-to-end and began managing all of our appliance delivery volume through our market delivery operations.

We have also added flatbed distribution centers, which handle large items like lumber and building materials that are transported on flatbed trucks.

As of the end of fiscal 2022, we have opened a number of additional fulfillment facilities, and we will continue to build out our fulfillment network to support our business.

Our network is designed to create a competitive advantage with unique, industry-leading capabilities for home improvement needs for both Pros and consumers.

These include rapid deployment centers, stocking distribution centers, bulk distribution centers, flatbed distribution centers, and direct fulfillment centers, among others.

Over the past several years, we have invested to further automate and mechanize our rapid deployment center network to drive greater efficiency and faster movement of product.

We are also continuing to enhance our supply chain network, with our expanded fulfillment facilities designed to drive speed and reliability of delivery for our customers.

In many markets we offer same day or next day delivery of a multitude of products through our stores and fulfillment centers.

We also have omni-channel fulfillment centers, which deliver product directly to customers, and market delivery operations, which function as local hubs to consolidate freight for dispatch to customers for the final mile of delivery, with a focus on appliances.

We met our goals to control more of our appliance delivery end-to-end and manage all of our appliance delivery volume through our market delivery operations in fiscal 2022, and in fiscal 2023, we continued to invest in these capabilities,

Fiscal 2023 Form 10-K

including expansion of our last mile delivery capacity.

We have also opened additional flatbed distribution centers, which handle large items like lumber and building materials that are transported on flatbed trucks.

Our network is designed to create a competitive advantage with unique, industry-leading capabilities for home improvement needs for both our Pros and consumers.

We will continue to invest in our supply chain network as needed to support our business.

In addition to our distribution and fulfillment centers, we leverage our stores as a network of convenient customer pickup, return, and delivery fulfillment locations.

Our premium real estate footprint provides a distinct structural and competitive advantage.

For customers who shop online and wish to pick up or return merchandise at, or have merchandise delivered from, our stores, we have implemented four interconnected retail programs:

For customers who shop online and want to pick up or return merchandise at a store, or have it delivered from a store, we have four interconnected retail programs:

BOSS, BOPIS, BODFS, and BORIS.

We also provide curbside pickup to complement our BOPIS offerings, in addition to the self-service lockers at the front entrance of many of our stores.

We also offer express car and van delivery service that covers over 80% of the U.S.

We also offer car and van delivery service from the majority of our U.S.

For fiscal 2023, approximately 50% of our U.S.

online orders were fulfilled through a store.

We also continue to focus on developing new capabilities to improve both efficiency and customer experience in our store delivery program.

We also continue to focus on developing new capabilities to improve both efficiency and customer experience for delivery from our stores.

Our strategic intent is to have a portfolio of efficient, timely and reliable sources and methods of delivery to choose from, optimizing order fulfillment and delivery based on customer needs, inventory locations, and available transportation options.

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CORPORATE RESPONSIBILITY AND HUMAN CAPITAL MANAGEMENT

We view environmental, social and governance matters through the lens of our business, with an understanding that if we support our associates, our customers, our supplier partners, and the communities we serve, we also support our business and create long-term value for our shareholders.

As a result, we believe that ESG is fundamentally embedded in our operations and culture.

We view corporate responsibility matters through the lens of our business, with an understanding that if we support our associates, our customers, our supplier partners, and the communities we serve, we also support our business and create long-term value for our shareholders.

As a result, we believe that what is commonly called ESG today is fundamentally embedded in our operations and culture.

We organize our efforts around three pillars:

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Our values also guide our efforts to create an environment that will help us attract and retain skilled associates in the competitive marketplace for talent.

We empower our associates to deliver a superior customer experience by living our values, and we position our associates to embody our core values by integrating the importance of our culture into ongoing development programs, performance management practices, and rewards programs.

Leaders participate in programs designed to build and strengthen our culture, such as training on leadership skills, cross-functional collaboration, inclusiveness, and associate engagement, and all associates receive annual training on unconscious bias.

Leaders participate in programs designed to

Fiscal 2023 Form 10-K

build and strengthen our culture, such as training on leadership skills, cross-functional collaboration, inclusiveness, and associate engagement, and associates receive training on unconscious bias.

Our core values are at the root of our human capital management programs.

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(1) Includes associates in our sourcing organization located in China, Vietnam, India, Italy, Poland and Turkey.

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Talent Attraction and Development.

As we attract and hire new associates, we strive to create a customer-like experience for jobseekers as they progress through the steps of our recruiting process by focusing on speed and personalization.

As we attract and hire new associates, we strive to create a customer-like experience for jobseekers by focusing on speed and personalization as they progress through the steps of our recruiting process.

We employ targeted marketing practices through our careers website, which personalizes the user’s experience based on jobseeker location and searching behavior.

Jobseekers can also apply for roles from anywhere using desktop or mobile devices.

Once a jobseeker has applied for a role and has been selected to move forward in the recruiting process, we provide self-service by allowing candidates to schedule or reschedule pre-hire activities directly from their mobile device.

Lastly, we created a quick hiring process for candidates by leveraging job-matching automation that matches candidates to jobs that fit their needs.

Once a jobseeker has applied for a role and has been selected to move forward in the recruiting process, we provide self-service for many of our positions by allowing candidates to schedule or reschedule pre-hire activities directly from their mobile device.

Lastly, we created a quick hiring process for select roles by matching candidates to jobs that fit their needs.

We offer all of our associates the opportunity to benefit from robust development opportunities.

Our Home Depot University, or “HDU,” program, is a key part of this development, offering relevant content through multiple platforms, including instructor-led classes, e-learning, mobile learning, and additional online resources.

We invest in ongoing growth and development by integrating our culture and values into our performance management practices, providing coaching through continuous leader support, and empowering our associates to learn new skills at their own pace through mobile applications our associates can access at any time.

We also invest in ongoing growth and development by providing coaching through continuous leader support and empowering our associates to learn new skills at their own pace through mobile applications our associates can access at any time.

We equip our leaders with the tools they need to develop themselves and their teams through several programs designed to help them lead inclusively, empower their teams, and serve as mentors for our associates.

In fiscal 2022, we supported both associate development and engagement by starting the year with a new store leadership structure.

We created new management positions in our stores focused on the customer service experience, increasing the number of managers on the floor at any given time.

This new structure frees up time for other store leaders to devote to associate training and development.

We also continue to work to ensure our store leadership structure supports both associate development and engagement as well as alignment across our organization.

In fiscal 2023, we continued to refine the updated store leadership structure established in fiscal 2022, which created new management positions in our stores focused on the customer service experience, increasing the number of managers on the floor at any given time.

This structure frees up time for other store leaders to devote to associate training and development.

The result is an improved customer and associate experience, while also providing new career paths for associates.

In fiscal 2023, we also announced changes to our senior leadership structure to better align the outside sales and service team with the global store organization, so that both outside sales and store associates can better serve our Pros.

Associate Engagement.

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Guided by our core values and grounded in our culture, we believe that having a diverse, equitable and inclusive Company is key to our success.

We are focused on building a workplace and retail space that reflect the customers and communities we are proud to serve.

We strive to maintain a Company where our associates are valued and respected and feel a sense of belonging in the workplace, so that they can provide the customer experience that supports our business.

Our Office of Diversity, Equity and Inclusion supports our focus on associate diversity, supplier diversity, and engagement with our communities.

Below is the fiscal 2022 diversity data for our U.S.

Our Office of Diversity, Equity and Inclusion (“DEI”) supports our DEI engagement efforts with our associates, suppliers, and communities.

Fiscal 2023 Form 10-K

Below is the fiscal 2023 demographic data for our U.S.

Associate Population Race/Ethnicity Gender

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1% 35% 65% 1%

Officers 26% 73% 2% 29% 69% 2%

(1) Does not include officers.

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• Associate Engagement

◦ Increase diverse representation throughout our organization

◦ Create an environment where every associate feels included and valued for who they are

◦ Consider inclusivity throughout our organization and create an environment where every associate feels included and valued for who they are

◦ Promote equal opportunity in recruitment, hiring, training, development and advancement

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• Supplier Diversity

◦ Increase use of and spend with diverse suppliers

◦ Develop diverse suppliers by providing mentorship and sharing resources

◦ Increase visibility into our spend with diverse suppliers, including diverse subcontractors

◦ Increase the pipeline of diverse suppliers to be considered for engagement

• Community Engagement

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Consistent with our core values, we take care of our people by offering competitive compensation and comprehensive benefits programs.

We continuously make wage investments to ensure our compensation packages reflect the evolving circumstances across our markets, and our profit-sharing program for hourly associates provides semi-annual cash awards for performance against our business plan.

We transitioned from the enhanced pay and benefits we provided for our associates in fiscal 2020 to alleviate some of the challenges presented by the COVID-19 pandemic to permanent compensation enhancements for our frontline, hourly associates, which we have continued to make since fiscal 2020.

We continuously make wage investments to ensure our compensation packages reflect the evolving circumstances across our markets.

Our profit-sharing program for hourly associates also provides semi-annual cash awards for performance against our business plan.

Our associates can take advantage of a range of benefits, including healthcare and wellness programs, vacation and leave of absence benefits including parental leave and paid sick/personal time off, a 401(k) match, our ESPPs, personal finance education and advisory services, assistance programs to help with managing personal and work-life challenges, family support programs, and educational assistance.

Operate Sustainably

We have a long-standing and substantial commitment to sustainable business operations, understanding that if we make our operations more efficient and sustainable, we can support both our business and the environment.

This philosophy extends from the products and services we offer to our customers;

We have a long-standing commitment to reduce the impact that our operations and products have on the environment, which we believe helps make our business stronger, more agile, and more resilient.

This approach extends from the products and services we offer to our customers;

to our store construction, maintenance and operations;

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Our 2023 ESG Report, available on our website at https://corporate.homedepot.com/responsibility, includes more information on our goals, as well as specific initiatives we have in place to help achieve these goals.

Below are highlights of our sustainability strategy.

Our Environmental Goals.

We currently have several goals to help address climate impact and reduce our environmental footprint:

Year Announced Goal Goal Date Status

2018 Cleaning Products Chemical Reduction :

Eliminate certain added chemicals from residential household cleaning products sold in-store or online by the end of fiscal 2022

2022 Complete (1)

2018 Science-Based Carbon Emissions Targets :

Reduce Scope 1 and 2 carbon emissions by 2.1% per year, with the goal to achieve a 40% reduction by the end of fiscal 2030 and a 50% reduction by the end of fiscal 2035

2035 In Process

2019 Recyclable Packaging :

Exclude expanded polystyrene foam (EPS) and polyvinyl chloride (PVC) film from the packaging of private-brand products we sell, replacing them with easier-to-recycle materials by the end of fiscal 2023

2023 In Process

2020 Renewable/Alternative Energy Sources :

Produce or procure, on an annual basis, 335 megawatts of renewable or alternative energy by the end of fiscal 2025

2025 In Process

2021 100% Renewable Electricity :

Produce or procure renewable electricity equivalent to the needs for all Home Depot facilities worldwide by the end of fiscal 2030

2030 In Process

(1) A de minimis number of suppliers are still in the process of reformulating and transitioning their product assortment.

These goals follow the completion of a number of previously announced goals, including goals related to reducing store electricity use, eliminating certain chemicals from products we sell, and helping customers reduce their greenhouse gas emissions and water use and save on electricity costs.

In order to progress against our goals to reduce our environmental footprint, we have a number of environmentally focused programs and initiatives.

Science-Based Targets for Emissions Reductions.

In fiscal 2023, we submitted new reduction goals to the Science Based Targets initiative (SBTi) to reduce Scope 1, 2 and 3 emissions in line with the Paris Agreement goals, and we further enhanced our goal for Scope 3 emissions reductions in early fiscal 2024.

We now plan to reduce our combined absolute Scope 1 and 2 emissions and our absolute Scope 3 Category 11 (“Use of Sold Products”) emissions by 42%, each by the end of fiscal 2030 from a fiscal 2020 base year.

The SBTi has validated that our enhanced goals conform with its criteria and has determined that our Scope 1 and 2 target is in line with a 1.5-degree Celsius trajectory.

Adoption of these SBTi-approved goals builds on and supersedes our previous science-based goals to reduce Scope 1 and 2 carbon emissions by 2.1% per year, to achieve a 40% reduction by the end of fiscal 2030 and a 50% reduction by the end of fiscal 2035.

Fiscal 2023 Form 10-K

Our Environmental Programs and Initiatives.

In order to progress against our goals, we have a number of environmentally-focused programs and initiatives, including:

Store Operations and Renewable/Alternative Energy.

We have reduced store energy consumption through initiatives such as LED lighting upgrades;

We have reduced U.S.

store electricity consumption through initiatives such as LED lighting upgrades;

installation of energy-efficient HVAC systems;

participation in demand mitigation;

on-site alternative or renewable energy projects such as fuel cells and solar panels;

and contracts with off-site wind and solar power providers.

and participation in demand mitigation.

We have also invested in on-site alternative or renewable energy projects such as fuel cells and solar panels and contracts with off-site wind and solar power providers.

We have continued to work toward our goal to produce or procure renewable electricity equivalent to the electricity needs for all Home Depot facilities by the end of fiscal 2030.

We have also continued our focus on saving water, implementing smart irrigation systems capable of reducing irrigation-related water use in more than 500 U.S.

Product Offerings.

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and many other products.

These products, through proper use, help our customers save money on their utility bills and reduce their environmental impact.

These products, through proper use, help our customers save money on their utility bills and reduce their environmental impact, and in fiscal 2023 we set new goals for customer savings on energy costs and reduced water usage through purchases of these products.

In fiscal 2023, we also announced a goal that by the end of fiscal 2028, 85% of our U.S.

and Canada in-store and online sales of push mowers and handheld outdoor power equipment will be powered by rechargeable battery technology.

Through Eco Actions, we also provide customers with resources, such as project tutorials, to take individual action on environmental issues.

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We periodically evaluate our Chemical Strategy to ensure our approach and goals are appropriate.

In fiscal 2023, we updated our Chemical Strategy to include a new goal to not allow added PFAS (Perfluoroalkyl and Polyfluoroalkyl Substance) chemicals in our new private-brand patio and home décor products sold in our U.S.

and Canada stores by the end of fiscal 2025.

Sustainable Packaging.

In addition to our goal related to eliminating EPS and PVC from our private-brand products, we are continually working with our suppliers to find ways to make product packaging more recyclable or simply use less materials, such as through the reduction of single-use plastics.

In addition to our goal related to eliminating expanded polystyrene foam (EPS) and polyvinyl chloride (PVC) film from new packaging for our private-brand products sold in U.S.

and Canada stores and online, we are continually working with our suppliers to find ways to make product packaging more recyclable or simply use less material, such as through the reduction of single-use plastics.

In fiscal 2023, we also announced a new goal that all private brand fiber packaging for new SKUs in our U.S.

and Canada stores and online will be compostable, recyclable or recycled content by the beginning of fiscal 2027.

Supply Chain Optimization.

Through our supply chain initiatives such as space sharing and optimization technology, we are working to maximize our use of every mile to make our supply chain more efficient.

We also utilize hydrogen fuel cell technology in a number of our forklifts to make our supply chain even more environmentally responsible.

CDP Participation.

We are a long-standing participant in the annual CDP Climate Change reporting process.

We are a long-standing participant in the annual CDP Climate Change disclosure process.

CDP is an independent, international, not-for-profit organization providing a global system for companies and cities to measure, disclose, manage, and share environmental information.

In February 2023, we received a score of “B” from CDP.

We have also announced that we plan to begin participating in CDP’s Forests reporting process.

• Assessment of SBTi Goals .

In fiscal 2021, we announced plans to adopt, by the end of fiscal 2023, new Science Based Targets Initiative (SBTi) goals to reduce Scope 1, 2 and 3 emissions in line with Paris Agreement goals.

Adoption of SBTi goals would build on our current science-based goals to reduce Scope 1 and 2 carbon emissions by 2.1% per year, to achieve a 40% reduction by the end of fiscal 2030 and a 50% reduction by the end of fiscal 2035.

In fiscal 2022, we continued to work on evaluating potential SBTi goals.

In February 2024, we received a score of “A-” from CDP on our Climate Change submission, reflecting leadership and an improved level of action on climate change.

We began participating in CDP’s Forests disclosure process in fiscal 2023, receiving a score of “C” on our first submission, indicating awareness of how these issues intersect with our business.

Over the past several years, our commitment to sustainable operations has resulted in a number of environmental awards and recognitions.

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an EPA WaterSense ® Partner of the Year Award for our commitment to offering and promoting water-efficient products;

an EPA SmartWay High Performer Award, which recognized us as an industry leader in improving freight efficiency and environmental performance;

an EPA Safer Choice Partner of the Year Award, which recognizes achievement in products with safer chemicals that furthers innovative source reduction;

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veterans, assisting communities affected by natural disasters, and training skilled tradespeople to fill the labor gap.

The Company and The Home Depot Foundation are partnering with industry leaders on training programs to train the next generation of skilled tradespeople and help them find careers in the home improvement industry through our Path to Pro program, which includes a new career networking site to connect skilled tradespeople to industry Pros.

Our Team Depot associate volunteers also extend

The Company and The Home Depot Foundation are partnering with industry leaders on training programs to train the next generation of skilled tradespeople and help them find careers in the home improvement industry through our Path to Pro program, which includes a career networking site to connect skilled tradespeople to industry Pros.

Our Team Depot associate volunteers also extend the mission of The Home Depot Foundation in communities across the country, donating thousands of volunteer hours each year to serve the needs of our communities.

Fiscal 2023 Form 10-K

the mission of the Home Depot Foundation in communities across the country, donating thousands of volunteer hours each year on a wide variety of projects.

We partner with diverse suppliers and organizations to further support our diversity, equity and inclusion efforts.

As noted above, our Office of Diversity, Equity and Inclusion partners with community organizations on programs designed to close the wealth gap and enhance education outcomes across underserved and underrepresented communities.

To further advance diversity, equity and inclusion in our communities, we have a supplier diversity program through which we provide supplier development and other resources to our diverse suppliers, and in fiscal 2021 we launched a Tier II supplier diversity program that aims to drive more spending from our direct suppliers to diverse suppliers.

In fiscal 2022, the Company joined the Billion Dollar Roundtable Inc., or BDR, a not-for-profit organization that promotes supplier diversity excellence and best practices.

The BDR consists of U.S.-based corporations that spend $1.0 billion or more annually with minority- and woman-owned suppliers.

We are working to cultivate a supplier base that creates long-lasting growth and mutual business success, while reflecting the diversity of our customers and strengthening the communities in which our customers and associates live.

We partner with a variety of suppliers and organizations to further support our DEI efforts.

As noted above, our Office of DEI partners with community organizations on programs designed to close the wealth gap and enhance education outcomes across a broad range of communities.

We are working to cultivate a supplier base that creates long-lasting growth and mutual business success, while strengthening the communities in which our customers and associates live.

Please see our 2023 ESG Report for additional information about our efforts to support the communities we serve.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business