Atlanta Home Depot held its annual meeting here, with customer service topping the list of issues on the minds of stockholders.
Several stockholders addressed CEO and chairman Frank Blake, as well as members of the company’s board of directors, on customer service issues -- a number of the speakers cited poor customer service experiences they personally had in stores.
Stockholder Barbara Snow said she had found herself “extremely frustrated” at various Home Depot stores in the recent past and suggested the retailer take cues from Target by having call boxes in stores. Blake noted that Home Depot has rolled out similar help boxes in several locations in the past year, a program the retailer plans to continue.
Gary Patton, a 16-year Home Depot store employee from North Carolina, said he has observed a “great need” for more associates on the store floor. Stockholder Thomas Wilkins said that finding goods in stores can be “a difficult experience,” stockholder Bernie Goldstein suggested training employees to make better eye contact with customers and stockholder Sally White said she had had difficulty with installation services on two occasions.
“You need to have people who know the product, know how to install it,” she said.
Blake addressed all of these issues by discussing Home Depot’s ongoing “Aprons on the Floor” initiative, which includes a $180 million investment this year to add more sales hours at the store level. He said the company has “a senior leadership team that fully understands [and] is very supportive of investing into associates.”
On Tuesday, Home Depot announced it would take a hit to first-quarter earnings to the tune of $543 million, due to the planned closing of 15 stores and the curtailment of construction plans of 50 more locations. Earnings were $356 million in the first quarter, down 66 percent from last year. Home Depot saw negative comp-store sales numbers in every store department except for garden.
Stockholder Anna Causey of Marietta, Ga., said prior to the meeting that she was disappointed with the first-quarter results and was hoping to see executive changes that might bring “fresh blood” to company operations.
In his opening statement to investors, Blake emphasized a long-term strategy to deal with the downturn in the housing market, while acknowledging Home Depot’s stock price will cause some “short-term pain.” Pointing to an overall downward-facing stock chart detailing the Home Depot share price over the course of the last year, Blake said, “This is, of course, my first report card, and it’s not a good one.”
Still, shareholders praised Blake at the meeting for his willingness to listen to a variety of issues and his diplomatic efforts with a number of shareholder interest groups.
Also at the annual meeting, shareholders rejected a bid to give investors an advisory vote on the compensation of some of the company's senior executives. The issue has been ongoing since the controversial pay package awarded to former CEO Bob Nardelli when he departed the company in early 2007.
The board of directors will see some changes - as had been previously announced, two founding directors will retire: Ken Langone and Milledge Hart. B onnie Hill, former CEO of the Times Mirror Foundation, will replace Langone as lead director.
Aspecial emphasis was put on international stores, which have seen a great deal of positive sales results in the past year, offsetting in part the downturn in the U.S. market, Blake said. The event kicked off with a series of video vignettes of cheering Home Depot employees at stores in Quebec, Canada; Monterrey, Mexico; New York; and Bayomon, Puerto Rico.
Stockholders discussed a number of other issues not central to store operations. Stephanie Downs, a member of People for the Ethical Treatment of Animals, (PETA) addressed stockholders on an initiative to eliminate the sale of certain types of glue traps because of concerns they are cruel to animals, a proposal that has been brought before Home Depot before as well as the Lowe's board of directors. A representative of the Sierra Club raised concerns about emissions from diesel vehicles used under Home Depot's transportation management plan.
The heavily Atlanta-based crowd gave Home Depot co-founder Bernie Marcus heavy applause and whistles at his introduction. Marcus, who helped found the Georgia Aquarium with a donation of $240 million of his own money, announced late last week a planned $110 million expansion of the aquarium’s dolphin exhibit.
Next on the agenda, Home Depot will hold its meeting with investment analysts on June 5.