家得宝(HOME DEPOT)2023年年度报告(英文版)(99页).pdf

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家得宝(HOME DEPOT)2023年年度报告(英文版)(99页).pdf

1、23AnnualReportFiscal 2023:A Year of ModerationFiscal 2023 was a year of moderation after three years of unprecedented growth in the home improvement market.It was also a year of opportunity.We focused on several operational improvements to strengthen the business,while also staying true to the growt

2、h opportunities detailed at our Investor and Analyst conference in June of 2023.During fscal 2023,total sales declined 3.0 percent to$152.7 billion,compared to fscal 2022.Fiscal 2023 comparable sales declined 3.2 percent for the total Company and 3.5 percent in the U.S.Our fscal 2023 net earnings we

3、re$15.1 billion,and earnings per diluted share decreased 9.5 percent to$15.11.Focused on Strategic ObjectivesOver the last several years,we have successfully managed through a dynamic macroeconomic environment,including infation and disinfation,higher interest rates,and shifts in consumer spending.T

4、hroughout this time,our strategic priorities have remained the same:deliver the best customer experience in home improvement,develop differentiated capabilities,and extend our low-cost provider position.Our objectives to grow market share and deliver exceptional shareholder value also remain unchang

5、ed.Fiscal 2023 marked another year of important progress in support of these priorities and objectives.We are focused on the execution of our strategies to continue to remove friction from the interconnected experience,enhance the Pro experience through our ecosystem of capabilities,and grow our sto

6、re footprint.Our customers navigate the physical and digital worlds in a truly interconnected way,and for us it is all about delivering the best shopping experience regardless of how they choose to shop with us.In the last few years,we have enhanced our digital in-store navigation in our Home Depot

7、app through our store mode feature,transformed the front end of stores to enable our customers to get in and out of our stores faster,and transitioned 100%of our appliance delivery to our new market delivery network,which has led to signifcant improvements in customer satisfaction.While we have made

8、 tremendous progress in removing friction,we are not done.We will continue to invest to meet our customers when,where,and how they want to shop with us.We have made signifcant progress developing our Pro ecosystem,from building out additional fulfllment modes,to a robust sales organization and digit

9、al platform specifcally geared at our Pro customers needs.We will continue investing to drive a best in-class experience to support our Pros for all of their project needs,including a new trade credit offering and an order management system designed to support the planning and execution of a complex

10、 project.Additionally,we completed the acquisition of Construction Resources in fscal 2023.With showrooms across the East Coast and Southeast,Construction Resources will provide another avenue through which we can effectively sell aesthetic products to our Pro customers who are executing complex pro

11、jects.The capabilities we are building to better serve more complex Pro project needs also help improve the experience for Pros shopping in our stores.More Pro jobsite deliveries fulflled through our distribution centers mean less congestion in our aisles and more product on hand to satisfy the need

12、 of our in-store Pro customers.We also see an opportunity to drive sales through new store openings.Since 2008,we have driven incredible sales productivity in our existing store base and have not focused on new stores as a driver ofgrowth.While we will maintain our focus on sales productivity in the

13、 existing stores,we know there are opportunities to increase sales further by building stores.During our Investor and Analyst conference in June,we announced plans to open approximately 80 new stores over the next fve years,including 13 in fscal 2023.We will continue to build out our store footprint

14、 in a strategic way by investing in new stores in geographic areas that have experienced signifcant population growth,or where it makes sense to relieve pressure on existing high-volume stores.Extending our Competitive AdvantagesIn fscal 2023,we invested approximately$1 billion in incremental annual

15、ized compensation for our frontline,hourly associates.We know that our associates are a key differentiator,and they are essential in helping us sustain an excellent customer experience.As a result of this investment,we have seen meaningful improvement in our attrition rates,particularly among our mo

16、st tenured associates.More consistent staffng levels are resulting in improved customer service,productivity,and safety.In addition to associate and other investments,we also drove productivity within the four walls of our store through multiple initiatives.Our Sidekick application,which was launche

17、d at the beginning of fscal 2023,is key to improving our on-shelf availability.Powered by machine learning,Sidekick directs associates to key bays where product is low or out of stock,and helps associates prioritize the highest value tasks more effectively.Computer Vision,which partners with Sidekic

18、k,utilizes technology to do what we previously relied on associates eyes to do.Computer Vision will give us better visibility into product that is on our shelves and overhead,which will further improve our on-shelf availability and drive sales.These tools have been deployed across all our U.S.stores

19、,and while its early,they have driven meaningful improvements in our on-shelf availability.In fscal 2023,we also made a strategic change to our leadership structure and named Ann-Marie Campbell Senior Executive Vice President.She has assumed responsibility for outside Pro sales efforts as well as ou

20、r installation services business,while continuing to oversee our U.S.stores and operations and our Canada and Mexico business units.By aligning the outside sales and service business with the global store organization,we are bringing together our full ecosystem of deep expertise with our newest capa

21、bilities to better serve what we believe is one of our largest growth opportunities,our Pro customer.Throughout the year our associates displayed strength and resilience,and I want to thank them and our supplier partners for their hard work and dedication to serving our customers and communities.As

22、we look to fscal 2024,we will continue to leverage our distinct competitive advantages to capitalize on compelling long-term growth opportunities in our space.The investments we have made and will continue to make in differentiated capabilities throughout the business will deliver a value propositio

23、n that we believe is unique in home improvement,allowing us to grow faster than the market over time and deliver exceptional shareholder value.March 13,2024Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 1

24、5(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended January 28,2024or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number 1-8207THE HOME DEPOT,INC.(Exact name of registrant as specified in its

25、 charter)Delaware95-3261426(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)2455 Paces Ferry RoadAtlanta,Georgia30339(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(770)433-8211 Securities registered

26、pursuant to Section 12(b)of the Act:Title of each classTrading SymbolName of each exchange on which registeredCommon Stock,$0.05 Par Value Per ShareHDNew York Stock ExchangeSecurities registered pursuant to section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned

27、 issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15

28、(d)of the Securities Exchange Act of 1934 duringthe preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements forthe past 90 days.Yes No Indicate by check mark whether the registrant has submitted electron

29、ically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large a

30、ccelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”inRule 12b-2 of the Exchange Act.Large accelerated filer

31、Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant

32、 to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal controlover financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered

33、public accounting firm that prepared or issued itsaudit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filingreflect the correction of an error to previously issued financial statements

34、.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received byany of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the regis

35、trant is a shell company(as defined in Rule 12b-2 of the Act).Yes No The aggregate market value of voting common stock held by non-affiliates of the registrant on July 28,2023 was$331.5 billion.The number of shares outstanding of the registrants common stock as of February 28,2024 was 991,015,773 sh

36、ares.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants proxy statement for the 2024 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K to the extentdescribed herein.TABLE OF CONTENTSCommonly Used or Defined TermsiiForward-Looking StatementsiiiPART

37、 IItem 1.Business.1Item 1A.Risk Factors.10Item 1B.Unresolved Staff Comments.22Item 1C.Cybersecurity.22Item 2.Properties.23Item 3.Legal Proceedings.25Item 4.Mine Safety Disclosures.25PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securiti

38、es.26Item 6.Reserved.27Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.27Item 7A.Quantitative and Qualitative Disclosures About Market Risk.34Item 8.Financial Statements and Supplementary Data.35Item 9.Changes in and Disagreements With Accountants on Accou

39、nting and Financial Disclosure.66Item 9A.Controls and Procedures.66Item 9B.Other Information.68Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.68PART IIIItem 10.Directors,Executive Officers and Corporate Governance.68Item 11.Executive Compensation.69Item 12.Security Owner

40、ship of Certain Beneficial Owners and Management and Related Stockholder Matters.69Item 13.Certain Relationships and Related Transactions,and Director Independence.69Item 14.Principal Accountant Fees and Services.69PART IVItem 15.Exhibit and Financial Statement Schedules.70Item 16.Form 10-K Summary.

41、74SIGNATURES75Fiscal 2023 Form 10-KiTable of ContentsCOMMONLY USED OR DEFINED TERMSTermDefinitionASUAccounting Standards UpdateBODFSBuy Online,Deliver From StoreBOPISBuy Online,Pickup In StoreBORISBuy Online,Return In StoreBOSSBuy Online,Ship to StoreCDPThe not-for-profit organization formerly known

42、 as the Carbon Disclosure ProjectComparable salesAs defined in the Results of Operations section of MD&ADIFMDo-It-For-MeDIYDo-It-YourselfEH&SEnvironmental,Health,and SafetyEPAU.S.Environmental Protection AgencyESGEnvironmental,social,and governanceESPPEmployee Stock Purchase PlanExchange ActSecuriti

43、es Exchange Act of 1934,as amendedFASBFinancial Accounting Standards Boardfiscal 2020Fiscal year ended January 31,2021(includes 52 weeks)fiscal 2021Fiscal year ended January 30,2022(includes 52 weeks)fiscal 2022Fiscal year ended January 29,2023(includes 52 weeks)fiscal 2023Fiscal year ended January

44、28,2024(includes 52 weeks)fiscal 2024Fiscal year ending February 2,2025(includes 53 weeks)GAAPU.S.generally accepted accounting principlesIRSInternal Revenue ServiceLIBORLondon interbank offered rateMD&AManagements Discussion and Analysis of Financial Condition and Results of OperationsMROMaintenanc

45、e,repair,and operationsNOPATNet operating profit after taxNYSENew York Stock ExchangePLCCPrivate label credit cardProProfessional customerRestoration PlansHome Depot FutureBuilder Restoration Plan and HD Supply Restoration PlanROICReturn on invested capitalSECSecurities and Exchange CommissionSecuri

46、ties ActSecurities Act of 1933,as amendedSG&ASelling,general,and administrative expensesSOFRSecured Overnight Financing RateFiscal 2023 Form 10-KiiTable of ContentsFORWARD-LOOKING STATEMENTSCertain statements contained herein,as well as in other filings we make with the SEC and other written and ora

47、l information we release,regarding our performance or other events or developments in the future constitute“forward-looking statements”as defined in the PrivateSecurities Litigation Reform Act of 1995.Forward-looking statements may relate to,among other things,the demand for our products andservices

48、,including as a result of macroeconomic conditions;net sales growth;comparable sales;the effects of competition;our brand andreputation;implementation of interconnected retail,store,supply chain and technology initiatives;inventory and in-stock positions;the state ofthe economy;the state of the hous

49、ing and home improvement markets;the state of the credit markets,including mortgages,home equity loans,and consumer credit;the impact of tariffs;issues related to the payment methods we accept;demand for credit offerings;management ofrelationships with our associates,potential associates,suppliers a

50、nd service providers;cost and availability of labor;costs of fuel and otherenergy sources;events that could disrupt our business,supply chain,technology infrastructure,or demand for our products and services,suchas international trade disputes,natural disasters,climate change,public health issues,cy

51、bersecurity events,geopolitical conflicts,and militaryconflicts or acts of war;our ability to maintain a safe and secure store environment;our ability to address expectations regarding environmental,social and governance matters and meet related goals;continuation or suspension of share repurchases;

52、net earnings performance;earningsper share;future dividends;capital allocation and expenditures;liquidity;return on invested capital;expense leverage;changes in interest rates;changes in foreign currency exchange rates;commodity or other price inflation and deflation;our ability to issue debt on ter

53、ms and at ratesacceptable to us;the impact and expected outcome of investigations,inquiries,claims,and litigation,including compliance with relatedsettlements;the challenges of operating in international markets;the adequacy of insurance coverage;the effect of accounting charges;theeffect of adoptin

54、g certain accounting standards;the impact of legal and regulatory changes,including changes to tax laws and regulations;storeopenings and closures;financial outlook;and the impact of acquired companies on our organization and the ability to recognize the anticipatedbenefits of any acquisitions.Forwa

55、rd-looking statements are based on currently available information and our current assumptions,expectations and projections about futureevents.You should not rely on our forward-looking statements.These statements are not guarantees of future performance and are subject tofuture events,risks and unc

56、ertainties many of which are beyond our control,dependent on the actions of third parties,or currently unknown tous as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and ourexpectations and projections.These risks and un

57、certainties include,but are not limited to,those described in Part I,Item 1A.Risk Factors,andelsewhere in this report and also as may be described from time to time in future reports we file with the SEC.You should read such informationin conjunction with our consolidated financial statements and re

58、lated notes and Part II,Item 7.Managements Discussion and Analysis ofFinancial Condition and Results of Operations in this report.There also may be other factors that we cannot anticipate or that are not describedherein,generally because we do not currently perceive them to be material.Such factors

59、could cause results to differ materially from ourexpectations.Forward-looking statements speak only as of the date they are made,and we do not undertake to update these statements otherthan as required by law.You are advised,however,to review any further disclosures we make on related subjects in ou

60、r filings with the SEC andin our other public statements.Fiscal 2023 Form 10-KiiiTable of ContentsPART IItem 1.Business.INTRODUCTIONThe Home Depot,Inc.is the worlds largest home improvement retailer based on net sales for fiscal 2023.We offer our customers a wideassortment of building materials,home

61、 improvement products,lawn and garden products,dcor products,and facilities maintenance,repair andoperations products.We also provide a number of services,including home improvement installation services and tool and equipment rental.Asof the end of fiscal 2023,we operated 2,335 stores located throu

62、ghout the U.S.(including the Commonwealth of Puerto Rico and the territoriesof the U.S.Virgin Islands and Guam),Canada,and Mexico.The Home Depot stores average approximately 104,000 square feet of enclosedspace,with approximately 24,000 additional square feet of outside garden area.We also maintain

63、a network of distribution and fulfillmentcenters,as well as a number of e-commerce websites in the U.S.,Canada and Mexico.When we refer to“The Home Depot,”the“Company,”“we,”“us”or“our”in this report,we are referring to The Home Depot,Inc.and its consolidated subsidiaries.The Home Depot,Inc.is a Dela

64、ware corporation that was incorporated in 1978.Our Store Support Center(corporate headquarters)is located at2455 Paces Ferry Road,Atlanta,Georgia 30339.Our telephone number at that address is(770)433-8211.OUR BUSINESSOUR STRATEGYThe retail landscape has changed rapidly over the past several years,wi

65、th a complex macroeconomic environment and customer expectationscontinually evolving.In fiscal 2023,we experienced a year of moderation after the unprecedented growth of the prior three years,as wenavigated the continued shift in consumer consumption trends away from goods and towards services and t

66、he impact of a rising interest rateenvironment.Our ability to operate successfully and meet the needs of our customers in an efficient and cost-effective way was due in significantpart to our investments over the past several years aimed at creating an interconnected,frictionless shopping experience

67、 that enables ourcustomers to seamlessly blend the digital and physical worlds.Going forward,we will continue to leverage the momentum of these investmentsand invest in our business in support of the following goals:We intend to provide the best customer experience in home improvement and develop di

68、fferentiated capabilities for our customers;We intend to extend our position as the low-cost provider in home improvement;andWe intend to be the most efficient investor of capital in home improvement.We believe that these goals will help us grow faster than the market and deliver value to our shareh

69、olders.We are steadfast in this commitment,while also recognizing that exercising corporate responsibility and being informed by the needs of our other stakeholders,including ourcustomers,associates,supplier partners,and communities,creates value for all stakeholders,including our shareholders.DELIV

70、ER SHAREHOLDER VALUEWe deliver on our objective to create shareholder value through our disciplined approach to capital allocation.Our capital allocation principlesare as follows:First,we intend to reinvest in our business to drive growth faster than the market.Second,after meeting the needs of the

71、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 sharerepurchases.In fiscal 2023,we invested$3.2 billion in capital expenditures to support our business,advance our goals,and conti

72、nue to build aninterconnected customer experience.We also focused on driving productivity throughout the business by lowering our product and transportationcosts and initiating a plan to reduce our fixed cost structure by approximately$500 million,which we expect will be realized in fiscal 2024.Thec

73、ombination of reinvesting in the business to drive higher sales and supporting productivity to lower costs allows us to improve our customerexperience,increase our competitiveness in the market,and deliver shareholder value.Fiscal 2023 Form 10-K1Table of ContentsIn fiscal 2023,we returned over$16 bi

74、llion to shareholders in the form of cash dividends and share repurchases.Our capital allocation isdiscussed further in Part II,Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.OUR CUSTOMERSWe serve two primary customer groups consumers(including both DIY a

75、nd DIFM customers)and professional customers and havedeveloped varying approaches to meet their diverse needs:DIY CustomersThese customers are typically homeowners who purchase products and complete their own projects and installations.Our associates assistthese customers both in our stores and thro

76、ugh online resources and other media designed to provide product and project knowledge.We alsooffer a variety of clinics and workshops both to share this knowledge and to build an emotional connection with our DIY customers.As thepreferences and behaviors of our DIY customers are changing,we are inv

77、esting in capabilities to better serve the needs of those customers.Professional Customers(or“Pros”)These customers are primarily professional renovators/remodelers,general contractors,maintenance professionals,handymen,propertymanagers,building service contractors and specialty tradespeople,such as

78、 electricians,plumbers and painters.These customers build,renovate,remodel,repair,and maintain residential properties,multifamily properties,hospitality properties,and commercial facilities,includingeducation,healthcare,government,institutional,and office buildings.We have a number of initiatives de

79、signed to drive growth with Pros,including those working on both simple and complex projects.We remainfocused on providing a customized online experience,a dedicated sales force,a broad assortment of Pro-focused products and brands,anextensive delivery network,our Pro Xtra loyalty program,and enhanc

80、ed credit offerings.Building on our historical strength as a destination forurgent purchase needs,we are investing in differentiated capabilities that will help us better serve our Pros complex purchase needs,includingexpanded supply chain capabilities,additional trade credit offerings,more showroom

81、 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 relatedvalue-added services to multifamily,hospitality,healthcare,and government housing facilities,among others.Our MRO operat

82、ions use adistribution center-based model that sells products primarily through a professional sales force and through e-commerce platforms and printcatalogs.In October 2023,we announced changes to our leadership structure,aligning our outside sales and service business with our global storeorganiza

83、tion to better serve our Pros by leveraging our full ecosystem and newest capabilities.We recognize the great value our Pros provide totheir clients,and we strive to make their jobs easier and help them grow their businesses,from expanded capabilities to improve their businessand customer experience

84、 to the Path to Pro network we are building for Pros to connect with jobseekers to help address the skilled laborshortage.We believe that investments aimed at deepening our relationships with our Pros are yielding increased engagement and will continueto translate into incremental sales to these cus

85、tomers.DIFM CustomersIntersecting our DIY customers and our Pros are our DIFM customers.These customers are typically homeowners who use Pros to completetheir project or installation.Currently,we offer installation services in a variety of categories,such as flooring,water heaters,bath,garage doors,

86、cabinets,cabinet makeovers,countertops,sheds,furnaces and central air systems,and windows.DIFM customers can purchase these servicesin our stores,online,or in their homes through in-home consultations.In addition to serving our DIFM customer needs,we believe our focus onthe Pros who perform services

87、 for these customers helps us drive higher product sales.OUR PRODUCTS AND SERVICESA typical The Home Depot store stocks approximately 30,000 to 40,000 items during the year,including both national brand name andproprietary products.Our online product offerings complement our stores by serving as an

88、extended aisle,and we offer a significantly broaderproduct assortment through our websites and mobile applications,including ,our primary website;homedepot.ca .mx,our websites in Canada and Mexico,respectively;,our website for our MRO products and related services;our websites for custom window cove

89、rings including , and ;and ,ourwebsite featuring textiles and dcor products.Fiscal 2023 Form 10-K2Table of ContentsWe believe our merchandising organization is a key competitive advantage,delivering product innovation,assortment and value,whichreinforces our position as the product authority in home

90、 improvement.In fiscal 2023,we continued to invest in merchandising resets in our storesto refine assortments,optimize space productivity,introduce innovative new products to our customers,and improve visual merchandising todrive a better shopping experience.At the same time,we remain focused on off

91、ering everyday values in our stores and online.To help ourmerchandising organization keep pace with changing customer expectations and increasing desire for innovation,localization,andpersonalization,we are continuing to invest in tools to better leverage our data and drive a deeper level of collabo

92、ration with our supplierpartners.As a result,we have continued to focus on enhanced merchandising information technology tools to help us:(1)build aninterconnected shopping experience that is tailored to our customers shopping intent and location;(2)provide the best value in the market;and(3)optimiz

93、e our product assortments.Our merchandising team leverages technology and works closely with our inventory and supply chainteams,as well as our supplier partners,to manage our assortments,drive innovation,manage the cost environment,and adjust inventory levelsto respond to fluctuations in demand.To

94、complement our merchandising efforts,we offer a number of services for our customers,including installation services for our DIY and DIFMcustomers,as noted above.We also provide tool and equipment rentals at locations across the U.S.and Canada,providing value andconvenience for both Pros and consume

95、rs.To improve the customer experience and continue to grow this differentiated service offering,we arecontinuing to invest in more locations(including continuing to pilot rental locations in Mexico),more tools,and better technology.Sourcing and Quality AssuranceWe maintain a global sourcing program

96、to obtain high-quality and innovative products directly from manufacturers in the U.S.and around theworld.During fiscal 2023,in addition to our U.S.sourcing operations,we maintained sourcing offices in Mexico,Canada,China,India,Vietnamand Europe.To ensure that suppliers adhere to our high standards

97、of social and environmental responsibility,we also have a global responsiblesourcing program.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 respo

98、nsible sourcing standards,which cover a variety ofexpectations across multiple areas of social compliance,including supply chain transparency,compliance with applicable laws and regulationsaddressing prohibitions on child and forced labor,health and safety,environmental matters,compensation,and hour

99、s of work.To driveaccountability with our suppliers,our standard supplier buying agreement includes a factory audit right related to these standards,and weconduct factory audits and compliance visits with non-Canada and non-U.S.suppliers of private branded and direct import products.Our 2023Responsi

100、ble Sourcing Report,available on our website at https:/ under“Responsibility Sourcing Responsibly,”provides more information about this program.In addition,we have both quality assurance and engineering resources dedicated to establishingcriteria and overseeing compliance with safety,quality and per

101、formance standards for our private branded products.Intellectual PropertyOur business has one of the most recognized brands in North America.As a result,we believe that The Home Depot trademark has significantvalue and is an important factor in the marketing of our products,e-commerce,stores and bus

102、iness.We have registered or applied forregistration of trademarks,service marks,copyrights and internet domain names,both domestically and internationally,for use in our business,including our proprietary brands such as HDX,Husky,Hampton Bay,Home Decorators Collection,Glacier Bay,Vigoro,Everbilt and

103、Lifeproof.The duration of trademark registrations varies from country to country.However,trademarks are generally valid and may be renewedindefinitely as long as they are in use and/or their registrations are properly maintained.We also maintain patent portfolios relating to our business operations,

104、retail services,and products,and we seek to patent or otherwise protectinnovations we incorporate into our business.Patents generally have a term of twenty years from the date they are filed.As our patent portfoliohas been built over time,the remaining terms of the individual patents across our pate

105、nt portfolio vary.Although our patents have value,nosingle patent is essential to our business.We continuously assess our merchandising departments and product lines for opportunities to expandthe assortment of products offered within The Home Depots portfolio of proprietary and exclusive brands.COM

106、PETITION AND SEASONALITYOur industry is highly competitive,fragmented,and evolving.As a result,we face competition for customers for our products and services from avariety of retailers,suppliers,service providers,and distributors and manufacturers that sell products directly to their respective cus

107、tomer bases.These competitors range from traditional brick-and-mortar,to multichannel,to exclusively online,and they include a number of other homeimprovement retailers;local,Fiscal 2023 Form 10-K3Table of Contentsregional and national hardware stores;electrical,plumbing and building materials suppl

108、y houses;and lumber yards.With respect to someproducts and services,we also compete with specialty design stores,showrooms,discount stores,paint stores,specialty and mass digitalretailers,warehouse clubs,MRO distributors,home dcor retailers,and other retailers,as well as with providers of home impro

109、vement servicesand tool and equipment rental.The internet facilitates competitive entry,price transparency,and comparison shopping,increasing the level ofcompetition we face.Both in-store and online,we compete primarily based on customer experience,price,quality,product availability and assortment,a

110、nd deliveryoptions.We also compete based on store location and appearance,presentation of merchandise,and ease of shopping experience.Our Prosalso look for dedicated sales support,competitive credit and pricing options,project planning tools,and product depth and job lot quantities,particularly for

111、their complex purchase needs.Furthermore,with respect to delivery options,customers are seeking faster and/or guaranteeddelivery times,low-price or free shipping,and/or convenient pickup options.Our ability to be competitive on delivery and pickup times,optionsand costs depends on many factors,inclu

112、ding the success of our supply chain investments,described more fully under“Our Supply Chain”below.Our business is subject to seasonal influences.Generally,our highest volume of sales occurs in our second fiscal quarter,as we move into thespring season in the regions in which we operate.INTERCONNECT

113、ED SHOPPING EXPERIENCEWe continue to enhance our capabilities to provide our customers with a frictionless interconnected shopping experience across our stores,online,on the job site,and in their homes,focusing on continued investments in our website and mobile apps to enhance the digital customerex

114、perience.Digital ExperienceEnhancements to our digital properties are critical for our increasingly interconnected customers,who often research products and checkavailable inventory online before going into one of our stores to view products in person or talk to an associate and then making their pu

115、rchaseeither in store or online.While in the store,customers may also go online to access ratings and reviews,compare prices,view our extendedassortment,and purchase additional products.Our investments in a truly interconnected experience are focused on bringing together the powerof our physical ret

116、ail presence and the frictionless interaction of our digital capabilities.A significant majority of the traffic in our digital channels is on mobile devices.Mobile customers expect more simplicity and relevancy in theirdigital interactions.As a result,we have made investments in our digital properti

117、es to improve the overall presentation and ease of navigation forthe user.We have also enhanced the“shopability”of an online product by including more information on the products landing page,includingrelated products and/or parts of a collection,as well as various fulfillment options.We believe our

118、 focus on improving search capabilities,sitefunctionality,category presentation,product content,speed to checkout,and fulfillment options has yielded higher traffic,better conversion andcontinued sales growth.Further,we do not view the interconnected shopping experience as a specific transaction;rat

119、her,we believe it encompasses an entire journeyfrom inspiration and know-how,to purchase and fulfillment,to post-purchase care and support.Customers expect more personalizedmessaging,so we are continuing to focus on connecting marketing activities with the online and in-store experiences to create s

120、eamlessengagement across channels.From the inspirational point of the purchase journey to providing product know-how,we continue to invest in theinfrastructure and capabilities needed to deliver the most relevant marketing messages to our customers based on what is important to themtoday.Store Exper

121、ienceOur stores remain the hub of our business,and we continue to invest to improve the customer shopping experience through easier navigationand increased convenience and speed of checkout.In fiscal 2023,we continued to leverage the investments made in our stores over the pastseveral years to opera

122、te effectively and meet customer expectations.These investments included wayfinding signage and store refreshpackages;self-service lockers,online order storage areas and curbside service to enable convenient online order pickup options;electronic shelflabel capabilities;and the re-design of front-en

123、d areas,including reconfigured service desks,improved layouts in checkout areas,and expandedand enhanced self-checkout options.We have also empowered our customers with additional self-help tools,including mobile app-enabled storenavigation.Our app provides store-specific maps,which allow customers

124、to pinpoint the exact location of an item on their mobile devices.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 inv

125、estmentsFiscal 2023 Form 10-K4Table of Contentsare driving higher customer satisfaction scores,and we will continue to invest to improve the customer experience.In addition,we haveidentified areas that have experienced significant population growth or where market voids exist,and in fiscal 2023 we i

126、nitiated a plan to openapproximately 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

127、.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 improvementslike optimizing product fl

128、ow to improve on-shelf product availability and thus decrease the amount of time store associates spend locatingproducts;creating a simpler order management system;expanding in-aisle,real-time mobile learning tools for our associates own developmentand to assist with customer questions;and using lab

129、or model tools to better align associate activity with customer needs.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 f

130、unctionality that allows associates to readily query inventory,accessapplications that support customer service,and assist with locating products.Our hdPhones also give our U.S.store associates access toSidekick,an application that directs associates to bays where product is low or out of stock and

131、helps our associates prioritize the highest valuetasks more effectively.To further support productivity,in fiscal 2023 we rolled out Computer Vision in our U.S.stores,which provides greatervisibility into where product is located,including both on the shelves and in the overhead space,enabling strat

132、egically-directed tasking andimproving on-shelf availability.Investing in Safety.We remain committed to maintaining a safe shopping and working environment for our customers and associates.Weaccomplish this by creating a strong culture of safety,building on our core value of Taking Care of Our Peopl

133、e,that starts from the top withengaged 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 beh

134、aviors.Ourassociate training and awareness initiatives target individual roles and responsibilities,integrating with overall strategies that promote physicaland psychological safety and mental wellness.We empower trained EH&S associates to continuously evaluate,develop,implement and enforce policies

135、,processes and programs in ourstores,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 in

136、clude daily storeinspection checklists;routine follow-up audits from our store-based safety team members;preventative maintenance programs to promoteequipment and physical space safety;and departmental merchandising safety standards.OUR SUPPLY CHAINWe continue to focus on building best-in-class comp

137、etitive advantages in our supply chain to be responsive to our customers expectations forhow,when and where they choose to receive our products and services.As part of enhancing the interconnected shopping experience,wecontinue to invest in our supply chain network,with the goal of achieving the fas

138、test,most efficient and most reliable delivery capabilities in homeimprovement.Our efforts are focused on ensuring product availability and increasing the speed and reliability of delivery for our customers whilemanaging our costs.Our supply chain investments have helped us to operate effectively an

139、d meet our customers needs,even with thechallenging 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 ournetwork of distribution centers to serve both our stores and customers

140、 needs.Our supply chain includes multiple distribution center platforms inthe U.S.,Canada,and Mexico tailored to meet the needs of our stores and customers based on types of products,location,transportation,anddelivery requirements.These include rapid deployment centers,stocking distribution centers

141、,bulk distribution centers,flatbed distributioncenters,and direct fulfillment centers,among others.Over the past several years,we have invested to further automate and mechanize ourrapid deployment center network to drive greater efficiency and faster movement of product.We are also continuing to en

142、hance our supply chain network,with our expanded fulfillment facilities designed to drive speed and reliability ofdelivery for our customers.In many markets we offer same day or next day delivery of a multitude of products through our stores and fulfillmentcenters.We also have omni-channel fulfillme

143、nt centers,which deliver product directly to customers,and market delivery operations,whichfunction as local hubs to consolidate freight for dispatch to customers for the final mile of delivery,with a focus on appliances.We met our goalsto control more of our appliance delivery end-to-end and manage

144、 all of our appliance delivery volume through our market delivery operations infiscal 2022,and in fiscal 2023,we continued to invest in these capabilities,Fiscal 2023 Form 10-K5Table of Contentsincluding expansion of our last mile delivery capacity.We have also opened additional flatbed distribution

145、 centers,which handle large items likelumber 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

146、supply chainnetwork 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 deliveryfulfillment locations.Our premium real estate footprint provides a distinct structural and competitive ad

147、vantage.For customers who shop onlineand 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

148、 at thefront entrance of many of our stores.We also offer car and van delivery service from the majority of our U.S.stores.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 improveboth efficiency and c

149、ustomer experience for delivery from our stores.Our strategic intent is to have a portfolio of efficient,timely and reliablesources and methods of delivery to choose from,optimizing order fulfillment and delivery based on customer needs,inventory locations,andavailable transportation options.CORPORA

150、TE RESPONSIBILITY AND HUMAN CAPITAL MANAGEMENTWe view corporate responsibility matters through the lens of our business,with an understanding that if we support our associates,ourcustomers,our supplier partners,and the communities we serve,we also support our business and create long-term value for

151、our shareholders.As a result,we believe that what is commonly called ESG today is fundamentally embedded in our operations and culture.We organize ourefforts around three pillars:(1)Focus on Our People,(2)Operate Sustainably,and(3)Strengthen Our Communities.Highlights of each of thesepillars are set

152、 forth below.For further information on our three pillars and other ESG-related matters,see our annual ESG Report,available onour website at https:/ on Our PeopleOur culture and our associates provide intangible and hard-to-replicate competitive advantages,which have been key to helping us navigatec

153、hallenging market conditions.Our associates are essential to providing the experience and service that our customers demand.To preserveand protect that customer experience,we focus on cultivating a compelling associate experience,which we believe supports our ability to attractand retain our associa

154、tes.This includes investing in competitive wages and benefits while also providing the culture,tools,training anddevelopment opportunities that make working at The Home Depot an enjoyable and rewarding experience.These actions are the foundation ofour key tenets of putting customers first and taking

155、 care of our associates.Culture and Values.The Home Depot has a strong commitment to ethics and integrity,and we are a values-and culture-centric business.Ourcommitment to our core values drives our approach to human capital management.Our culture is based on our servant leadership philosophyreprese

156、nted by the inverted pyramid,which puts primary importance on our customers and our associates by positioning them at the top,withsenior management at the base in a support role.We bring our culture to life through our core values,which serve as the foundation of ourbusiness and as the guiding princ

157、iples behind the decisions we make every day.Our values also guide our efforts to create an environment that will help us attract and retain skilled associates in the competitive marketplace fortalent.We empower our associates to deliver a superior customer experience by living our values,and we pos

158、ition our associates to embody ourcore values by integrating the importance of our culture into ongoing development programs and rewards programs.Leaders participate inprograms designed toFiscal 2023 Form 10-K6Table of Contentsbuild and strengthen our culture,such as training on leadership skills,cr

159、oss-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.Our Workforce.At the end of fiscal 2023,we employed approximately 463,100 associates,of whom approximately

160、46,200 were salaried,withthe remainder compensated on an hourly basis.Set forth below is the geographic makeup of our workforce:Geographic LocationNumber of Associates%of Total WorkforceUnited States411,200 88.8%Canada33,8007.3%Mexico17,8003.8%Other 3000.1%Total463,100100%(1)Includes associates in o

161、ur sourcing organization located in China,Vietnam,India,Italy,Poland and Turkey.Talent Attraction and Development.As we attract and hire new associates,we strive to create a customer-like experience for jobseekers byfocusing on speed and personalization as they progress through the steps of our recr

162、uiting process.We employ targeted marketing practicesthrough our careers website,which personalizes the users experience based on jobseeker location and searching behavior.Jobseekers canalso apply for roles from anywhere using desktop or mobile devices.Once a jobseeker has applied for a role and has

163、 been selected to moveforward in the recruiting process,we provide self-service for many of our positions by allowing candidates to schedule or reschedule pre-hireactivities directly from their mobile device.Lastly,we created a quick hiring process for select roles by matching candidates to jobs tha

164、t fit theirneeds.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,mobilelearning

165、,and additional online resources.We also invest in ongoing growth and development by providing coaching through continuous leadersupport 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

166、 tools they need to develop themselves and their teams through several programs designed to help them leadinclusively,empower their teams,and serve as mentors for our associates.We also continue to work to ensure our store leadership structure supports both associate development and engagement as we

167、ll as alignmentacross our organization.In fiscal 2023,we continued to refine the updated store leadership structure established in fiscal 2022,which creatednew management positions in our stores focused on the customer service experience,increasing the number of managers on the floor at anygiven tim

168、e.This structure frees up time for other store leaders to devote to associate training and development.The result is an improvedcustomer and associate experience,while also providing new career paths for associates.In fiscal 2023,we also announced changes to oursenior leadership structure to better

169、align the outside sales and service team with the global store organization,so that both outside sales andstore associates can better serve our Pros.Associate Engagement.Associate engagement is the emotional commitment associates have to The Home Depot.It is vital to our culture andto our success.We

170、 create an engaging workplace by continuously listening to and acting on associate feedback.We provide several pulsecheck surveys to associates throughout the year that help us determine how emotionally connected those associates are to our customers,theCompany,their jobs,fellow associates,and leade

171、rs.In addition,our annual Voice of the Associate survey,which includes all associates,servesas our primary means of gauging associates level of engagement within their roles.We use the feedback from these surveys to help improvethe overall associate experience.We also maintain a digital associate en

172、gagement platform that links associates with common interests andfuels connections to co-workers and Company leaders.Additionally,we have a number of programs to recognize stores and individualassociates for exceptional customer service and demonstrating our core values.Diversity,Equity and Inclusio

173、n.Guided by our core values and grounded in our culture,we believe that having a diverse,equitable andinclusive Company is key to our success.We strive to maintain a Company where our associates are valued and respected and feel a sense ofbelonging in the workplace,so that they can provide the custo

174、mer experience that supports our business and the communities we serve.OurOffice of Diversity,Equity and Inclusion(“DEI”)supports our DEI engagement efforts with our associates,suppliers,and communities.(1)Fiscal 2023 Form 10-K7Table of ContentsBelow is the fiscal 2023 demographic data for our U.S.a

175、ssociates:Associate PopulationRace/EthnicityGender%Minority%White%Undisclosed%Female%Male%UndisclosedU.S.Workforce49%49%2%37%62%1%U.S.Managers&Above 39%60%1%35%65%1%U.S.Officers25%74%1%31%68%1%(1)Does not include officers.Note:Certain percentages may not sum to totals due to rounding.As a Company,we

176、 have identified several priorities designed to guide our efforts to enhance diversity,equity and inclusion.We believe theseassociate-,supplier-and community-focused priorities will further enhance our customers experience and make a sustainable difference withinthe workplace,marketplace,and communi

177、ty:Associate EngagementConsider inclusivity throughout our organization and create an environment where every associate feels included and valued forwho they arePromote equal opportunity in recruitment,hiring,training,development and advancementSupplier DiversityIncrease visibility into our spend wi

178、th diverse suppliers,including diverse subcontractorsIncrease the pipeline of diverse suppliers to be considered for engagementCommunity EngagementPartner with organizations on programs designed to close the wealth gapSupport programs that advance education for allCompensation and Benefits.Consisten

179、t with our core values,we take care of our people by offering competitive compensation andcomprehensive benefits programs.We continuously make wage investments to ensure our compensation packages reflect the evolvingcircumstances across our markets.Our profit-sharing program for hourly associates al

180、so provides semi-annual cash awards for performanceagainst our business plan.Our associates can take advantage of a range of benefits,including healthcare and wellness programs,vacation andleave of absence benefits including parental leave and paid sick/personal time off,a 401(k)match,our ESPPs,pers

181、onal finance education andadvisory services,assistance programs to help with managing personal and work-life challenges,family support programs,and educationalassistance.Operate SustainablyWe have a long-standing commitment to reduce the impact that our operations and products have on the environmen

182、t,which we believe helpsmake our business stronger,more agile,and more resilient.This approach extends from the products and services we offer to our customers;toour store construction,maintenance and operations;to our supply chain and packaging initiatives;to our ethical sourcing program.As we stri

183、veto operate sustainably,we have focused on efforts that help protect the climate,reduce our environmental impact,and source productsresponsibly,and we have set goals to drive progress in these areas.Our 2023 ESG Report,available on our website at https:/ more information on our goals,aswell as spec

184、ific initiatives we have in place to help achieve these goals.In order to progress against our goals to reduce our environmentalfootprint,we have a number of environmentally focused programs and initiatives.Science-Based Targets for Emissions Reductions.In fiscal 2023,we submitted new reduction goal

185、s 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 emissionsreductions in early fiscal 2024.We now plan to reduce our combined absolute Scope 1 and 2 emissions and our absolute Scope 3

186、 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 ourenhanced 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

187、SBTi-approved goals builds on and supersedes our previous science-based goals to reduce Scope 1 and 2 carbon emissionsby 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.(1)Fiscal 2023 Form 10-K8Table of ContentsStore Operations and Renewa

188、ble/Alternative Energy.We have reduced U.S.store electricity consumption through initiatives such as LEDlighting upgrades;installation of energy-efficient HVAC systems;and participation in demand mitigation.We have also invested in on-sitealternative or renewable energy projects such as fuel cells a

189、nd solar panels and contracts with off-site wind and solar power providers.We havecontinued to work toward our goal to produce or procure renewable electricity equivalent to the electricity needs for all Home Depot facilities bythe end of fiscal 2030.Product Offerings.Through our Eco Actions program

190、,we have helped our customers more easily identify products related to five areas:carbon emissions,circularity,responsible chemistry,sustainable forestry,and water use.Under our Eco Actions program,we sell ENERGYSTAR certified appliances;WaterSense-labeled bath faucets,showerheads,aerators,toilets,a

191、nd irrigation controllers;LED light bulbs;tankless water heaters;and many other products.These products,through proper use,help our customers save money on their utility bills andreduce their environmental impact,and in fiscal 2023 we set new goals for customer savings on energy costs and reduced wa

192、ter usage throughpurchases 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 andonline sales of push mowers and handheld outdoor power equipment will be powered by rechargeable battery technology.Through Eco Actions,we also pro

193、vide customers with resources,such as project tutorials,to take individual action on environmental issues.In-Store Recycling Programs.We offer customer-facing recycling programs in the U.S.,including in-store recycling programs for compactfluorescent light bulbs,rechargeable batteries,and lead acid

194、batteries.Chemical Strategy.We are committed to increasing our assortment of products that meet high environmental standards,and we encourage oursuppliers to invest in developing environmentally innovative products.We periodically evaluate our Chemical Strategy to ensure our approachand goals are ap

195、propriate.In fiscal 2023,we updated our Chemical Strategy to include a new goal to not allow added PFAS(Perfluoroalkyl andPolyfluoroalkyl Substance)chemicals in our new private-brand patio and home dcor products sold in our U.S.and Canada stores by the end offiscal 2025.Sustainable Packaging.In addi

196、tion to our goal related to eliminating expanded polystyrene foam(EPS)and polyvinyl chloride(PVC)film fromnew packaging for our private-brand products sold in U.S.and Canada stores and online,we are continually working with our suppliers to findways to make product packaging more recyclable or simpl

197、y 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 becompostable,recyclable or recycled content by the beginning of fiscal 2027.Supply Ch

198、ain Optimization.Through our supply chain initiatives such as space sharing and optimization technology,we are working tomaximize our use of every mile to make our supply chain more efficient.CDP Participation.We are a long-standing participant in the annual CDP Climate Change disclosure process.CDP

199、 is an independent,international,not-for-profit organization providing a global system for companies and cities to measure,disclose,manage,and shareenvironmental information.In February 2024,we received a score of“A-”from CDP on our Climate Change submission,reflecting leadershipand an improved leve

200、l of action on climate change.We began participating in CDPs Forests disclosure process in fiscal 2023,receiving a scoreof“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

201、in a number of environmental awards and recognitions.In2023,we received the following awards:an EPA WaterSense Partner of the Year Award for our commitment to offering and promoting water-efficient products;an EPA Safer Choice Partner of the Year Award,which recognizes achievement in products with s

202、afer chemicals that furthersinnovative source reduction;and an EPA ENERGY STAR Partner of the Year Award for our contribution to promoting energy efficiency.Strengthen our CommunitiesOne of our core values is“Giving Back,”and we support our communities in a number of ways.The Home Depot Foundation f

203、ocuses onimproving the homes and lives of U.S.veterans,assisting communities affected by natural disasters,and training skilled tradespeople to fill thelabor gap.The Company and The Home Depot Foundation are partnering with industry leaders on training programs to train the next generationof skilled

204、 tradespeople and help them find careers in the home improvement industry through our Path to Pro program,which includes a careernetworking site to connect skilled tradespeople to industry Pros.Our Team Depot associate volunteers also extend the mission of The HomeDepot Foundation in communities acr

205、oss the country,donating thousands of volunteer hours each year to serve the needs of our communities.TMFiscal 2023 Form 10-K9Table of ContentsWe partner with a variety of suppliers and organizations to further support our DEI efforts.As noted above,our Office of DEI partners withcommunity organizat

206、ions on programs designed to close the wealth gap and enhance education outcomes across a broad range ofcommunities.We are working to cultivate a supplier base that creates long-lasting growth and mutual business success,while strengthening thecommunities in which our customers and associates live.P

207、lease see our 2023 ESG Report for additional information about our efforts to support the communities we serve.GOVERNMENT REGULATIONAs a company with both U.S.and international operations,we are subject to the laws of the U.S.and foreign jurisdictions in which we operateand the rules and regulations

208、 of various governing bodies,which may differ among jurisdictions.Compliance with these laws,rules andregulations has not had,and is not expected to have,a material effect on our capital expenditures,results of operations,or competitive positionas compared to prior periods.AVAILABLE INFORMATIONOur i

209、nternet website is .We make available on the Investor Relations section of our website,free of charge,our AnnualReports to shareholders,Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,Proxy Statements,andForms 3,4 and 5,and amendments to those reports,as soon a

210、s reasonably practicable after filing such documents with,or furnishing suchdocuments to,the SEC.We include website addresses throughout this report for reference only.The information contained on these websites is not incorporated byreference into this report.Item 1A.Risk Factors.Our business,resul

211、ts of operations,and financial condition are subject to numerous risks and uncertainties.In connection with any investmentdecision with respect to our securities,you should carefully consider the following risk factors,as well as the other information contained in thisreport and our other filings wi

212、th the SEC.Additional risks and uncertainties not presently known to us or that we currently deem immaterial mayalso impair our business operations.Should any of these risks materialize,our business,results of operations,financial condition and futureprospects could be negatively impacted,which in t

213、urn could affect the trading value of our securities.You should read these Risk Factors inconjunction with Part II,Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations and our consolidatedfinancial statements and related notes in Item 8.STRATEGIC RISKSStrong co

214、mpetition could adversely affect prices and demand for our products and services and could decrease our market share.Our industry is highly competitive,highly fragmented,and evolving.As a result,we face competition for customers for our products and servicesfrom a variety of retailers,suppliers,serv

215、ice providers,and distributors and manufacturers that sell products directly to their respective customerbases.These competitors range from traditional brick-and-mortar,to multichannel,to exclusively online,and they include a number of other homeimprovement retailers;local,regional and national hard

216、ware 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,paint stores,specialtyand mass digital retailers,warehouse clubs,MRO distributors,home dcor retailer

217、s,and other retailers,as well as with providers of homeimprovement services and tool and equipment rental.The internet facilitates competitive entry,price transparency,and comparison shopping,increasing the level of competition we face.We compete primarily based on customer experience;price;quality;

218、product availability,assortment,and innovation;and delivery options,bothin-store and online.We also compete based on store location and appearance,presentation of merchandise,and ease of shopping experiencethroughout every step of the project,from inspiration and research to any post-purchase suppor

219、t.Our Pros also look for dedicated sales support,competitive credit and pricing options,project planning tools,product depth and job lot quantities,particularly for their complex purchase needs.Furthermore,customers are increasingly shopping online and seeking faster and/or guaranteed delivery times

220、,low-price or free shipping,and/orconvenient pickup options.Our ability to be competitive on delivery and pickup times,options and costs depends on many factors,includingleveraging the momentum of our investments in our supply chain and our interconnected retail capabilities to further enhance the c

221、ustomershopping experience.Failure to successfully manage these factors and offer competitive delivery and pickup options could negatively impact ourprofit margins and the demand for our products.Fiscal 2023 Form 10-K10Table of ContentsWe use our marketing,advertising and promotional programs to dri

222、ve customer traffic and compete more effectively,and we must regularlyassess and adjust our efforts to address changes in the competitive landscape.Intense competitive pressures from one or more of ourcompetitors,such as through aggressive promotional pricing or liquidation events,or our inability t

223、o adapt effectively and quickly to a changingcompetitive landscape,could adversely affect our prices,our margins,or demand for our products and services.If we are unable to timely andappropriately respond to these competitive pressures,including through the delivery of a superior interconnected cust

224、omer experience orthrough maintenance of effective sales and marketing,advertising or promotional programs leveraging both our digital and physical platforms,our market share and our financial performance could be adversely affected.In fiscal 2023 we also continued to operate in an inflationary andr

225、ising interest rate environment,and the long-term outlook is difficult to predict.If we experience inflation or deflation at a level beyond our abilityto respond effectively,we may not be able to adjust prices to sufficiently offset the effects without negatively impacting consumer demand ormargins,

226、as applicable,or it may adversely affect our ability to compete based on price.We may not timely identify or effectively respond to consumer needs,expectations or trends,which could adversely affect ourrelationship with our customers,the demand for our products and services,and our market share.The

227、success of our business depends in part on our ability to identify and respond promptly to evolving trends in demographics;shifts inconsumer preferences,expectations and needs;changes in the macroeconomic environment;and unexpected weather conditions,naturaldisasters,or public health issues(includin

228、g pandemics and related impacts)that impact our customers,while also managing appropriateinventory levels in our stores and distribution or fulfillment centers and maintaining an excellent customer experience.It is difficult to successfullypredict the products and services our customers will demand.

229、As our customers expect a more personalized experience,our ability to collect,use,retain,and protect relevant customer data is important to our ability to effectively meet their expectations.Our ability to collect and use thatdata,however,is subject to a number of external factors,including the impa

230、ct of legislation or regulations governing data privacy,data-driventechnologies such as artificial intelligence,and data security,as well as customer expectations around data collection,retention,and use.Inaddition,each of our primary customer groups has different needs and expectations,many of whic

231、h evolve as the demographics in a particularcustomer group change.Customer preferences and expectations related to sustainability of products and operations are also changing.Inaddition,as the impacts of COVID-19 have subsided,customers have shifted more of their spending back to travel,dining and o

232、therexperiences,compared to the historic levels of home improvement spending we saw during the heights of the pandemic.If we do notsuccessfully differentiate the shopping experience to attract our customers and meet their individual needs and expectations,it may adverselyimpact our sales or our mark

233、et share.Customer expectations about the methods by which they purchase and receive products or services are also becoming more demanding.Customers routinely and increasingly use technology and a variety of electronic devices and digital platforms to rapidly compare products andprices,read product r

234、eviews,determine real-time product availability,and purchase products,and new channels and tools to expand thecustomer experience appear and change rapidly.Our Pros also look for additional capabilities,including dedicated sales support,competitivecredit and pricing options,project planning tools,an

235、d product depth and job lot quantities,particularly for their complex purchase needs.Onceproducts are purchased,customers seek alternate options for delivery of those products,including advance ordering through digital platforms forPros,and they often expect quick,timely,and low-price or free delive

236、ry and/or convenient pickup options.We must continually anticipate andadapt to these changes in the shopping and purchasing process by continuing to adjust and enhance the online and in-store customerexperience as well as our delivery options.The coordinated operation of our network of physical stor

237、es,distribution facilities,and onlineplatforms is fundamental to the success of our interconnected strategy.We cannot guarantee that our current or future fulfillment options will bemaintained and implemented successfully or that we will be able to meet customer expectations on delivery or pickup ti

238、mes,options and costs.In addition,as our customers continue to leverage our enhanced interconnected shopping and fulfillment options,a greater concentration ofonline sales with direct fulfillment could result in a reduction in the amount of traffic in our stores,which would,in turn,reduce the opport

239、unitiesfor cross-selling of merchandise that such traffic creates and could reduce our overall sales and adversely affect our financial performance.Agreater concentration of online sales with direct fulfillment could also result in higher costs for delivery,potentially impacting our profit margins.F

240、ailure to provide a relevant and effective customer experience in a timely manner that keeps pace with technological developments anddynamic customer expectations;to maintain appropriate inventory;to provide quick and low-price or free delivery alternatives and convenientpickup options;to differenti

241、ate the customer experience for our primary customer groups;to effectively implement an increasingly localizedmerchandising assortment;or toFiscal 2023 Form 10-K11Table of Contentsotherwise timely identify or respond to changing consumer preferences,expectations and home improvement needs could adve

242、rsely affect ourrelationship with our customers,the demand for our products and services,and our market share.A positive brand and reputation are critical to our business success,and,if our brand and reputation are damaged,it could negativelyimpact our relationships with our customers,current and po

243、tential associates,suppliers,vendors,and shareholders,and,consequently,our business and results of operations or the price of our stock.Our brand and reputation are critical to attracting customers,current and potential associates,suppliers and vendors to do business with us.Wemust continue to manag

244、e and protect our brand and reputation.Negative incidents can erode trust and confidence quickly,and adverse publicityabout us could damage our brand and reputation;undermine our customers confidence in us;reduce demand for our products and services;affect our ability to recruit,engage,motivate and

245、retain associates;attract regulatory scrutiny;and impact our relationships with current andpotential suppliers and vendors.Our suppliers and vendors business practices and positions may also be attributed to us,regardless of ourCompanys actions,meaning the actions of third parties pose similar risks

246、 to our brand and reputation.Further,our actual or perceived positionor lack of position on social,environmental,governance,political,public policy,economic,geopolitical,or other sensitive issues,and anyperceived lack of transparency about those matters,could harm our reputation with certain groups.

247、In addition,we could be criticized for thescope or nature of ESG-related initiatives or goals,or for any revisions to or failure to achieve these goals on a timely basis or at all.If our ESG-related data,processes and reporting are incomplete or inaccurate,we could face regulatory scrutiny,litigatio

248、n and/or adverse reputationalimpacts.Customers are also increasingly using social media to provide feedback and information about our Company,including our productsand services,in a manner that can be quickly and broadly disseminated.Negative sentiment about the Company shared over social media,ormi

249、sinformation from fraudulent accounts impersonating the Company,could impact our brand and reputation,whether or not it is based in fact.The execution of initiatives to implement our interconnected retail strategy could adversely impact our business operations orfinancial results,and these initiativ

250、es might not provide the anticipated benefits.Over the past several years,we have made significant investments to execute our interconnected retail strategy,including enhancing andexpanding our supply chain,developing differentiated capabilities for our customers,expanding our store base,and making

251、strategicacquisitions.These investments are designed to streamline our operations to allow our associates to continue to provide high-quality service toour customers;simplify customer interactions;provide our customers with a more interconnected shopping experience;expand our sales tolarger Pros and

252、 better address their complex purchase needs;and create the fastest,most efficient,and most reliable delivery network for homeimprovement products.Executing our interconnected retail strategy requires continual investment in our operations and information technologysystems,as well as the development

253、 and execution of new processes,systems and support.Investment in our supply chain also involvessignificant real estate projects as we expand our distribution network,requiring us to identify and secure available locations with appropriatecharacteristics needed to support the different types of faci

254、lities.In addition,our stores are a key element of our interconnected retail strategy,serving as the hub of our customers interconnected shopping experience.We have an aging store base that requires maintenance,investment,and space reallocation initiatives to deliver the shopping experience that our

255、 customers desire.We also need to identify and secure availablelocations with appropriate characteristics for new stores to ensure we can continue to serve our customers effectively.We must effectively manage the volume,timing,nature,location,and cost of our investments,projects and changes.Failure

256、to continue to makeinvestments to effectively support our strategy and to implement or integrate those investments in the right manner and at the right pace couldadversely impact our business operations or financial results.The cost and potential problems,defects of design,and interruptions associat

257、edwith the implementation of these initiatives,including those associated with managing third-party service providers,employing new online toolsand services,implementing new technologies such as artificial intelligence,implementing and restructuring support systems and processes,securing appropriate

258、 store and facility locations,and addressing impacts on inventory levels,could disrupt or reduce the efficiency of ouroperations in the near term,lead to product availability issues,create complexity in our systems and operations and impact our profitability.Ourinvestments to enhance our interconnec

259、ted shopping experience,including investments in our store base,supply chain,and capabilities,mightnot provide the anticipated benefits,or might take longer than expected to complete,integrate or realize anticipated benefits,each of which couldadversely impact our competitive position and our financ

260、ial condition,results of operations,or cash flows.Fiscal 2023 Form 10-K12Table of ContentsIf we are unable to effectively manage and expand our alliances and relationships with certain suppliers of both brand name andproprietary products,we may be unable to effectively execute our strategy to differ

261、entiate ourselves from our competitors.As part of our focus on product differentiation,we have formed strategic alliances and exclusive relationships with certain suppliers to marketproducts under a variety of well-recognized brand names.We have also developed relationships with certain suppliers to

262、 allow us to marketproprietary products that are comparable to national brands.Our proprietary products differentiate us from other retailers and generally carryhigher margins than national brand products.If we are unable to manage and expand these alliances and relationships,maintain favorable term

263、swith current suppliers,or identify alternative sources for comparable brand name and proprietary products,we may not be able to effectivelyexecute product differentiation,which may impact our sales and gross margin results.Our suppliers business practices and positions may alsobe attributed to us,r

264、egardless of our Companys actions,meaning that controversies regarding our suppliers of brand name or proprietaryproducts pose risks to our reputation and brand,and could require us to quickly identify alternative sources for comparable products.Our strategic transactions involve risks,which could h

265、ave an adverse impact on our business,financial condition and results ofoperations,and we may not realize the anticipated benefits of these transactions.We regularly consider and enter into strategic transactions,including mergers,acquisitions,investments,alliances,and other growth and marketexpansi

266、on strategies.We generally expect that these transactions will result in sales increases,cost savings,synergies,enhanced capabilities orvarious other benefits.Assessing the viability and realizing the benefits of these transactions is subject to significant uncertainty.For each of ouracquisitions,we

267、 need to determine the appropriate level of integration of the target companys products,services,associates,and informationtechnology,financial,human resources,compliance,and other systems and processes,and then successfully manage that integration into ourcorporate structure.Integration can be a co

268、mplex and time-consuming process,and if the integration is not fully successful or is delayed for amaterial period of time,we may not achieve the anticipated synergies or benefits of the acquisition.In addition,the integration of businesses maycreate increased complexity in our financial systems,int

269、ernal controls,technology and cybersecurity systems,and operations and may makethem more difficult to manage.Even if the target companies are successfully integrated,the acquisitions may fail to further our business strategyas anticipated,expose us to increased competition or challenges with respect

270、 to our products or services,and expose us to additional risks andliabilities.Strategic transactions may also be subject to significant regulatory uncertainty.The changing enforcement landscape may result inadditional costs or delays that affect the anticipated outcome of a transaction.Any failure i

271、n the execution of a strategic transaction orinvestment,our approach to the integration of an acquired asset or business,or achievement of synergies or other benefits could result in slowergrowth,higher than expected costs,the recording of an impairment of goodwill or other intangible assets,and oth

272、er actions which couldadversely affect our business,financial condition and results of operations.OPERATIONAL RISKSOur success depends upon our ability to attract,develop and retain highly qualified associates to provide excellent customer serviceand to support our strategic initiatives while also c

273、ontrolling our labor costs.Our customers expect a high level of customer service and product knowledge from our associates.To meet the needs and expectations of ourcustomers,we must attract,develop and retain a large number of highly qualified associates and maintain a productive relationship with t

274、hoseassociates.Our ability to meet our labor needs while controlling labor costs is subject to numerous external factors,including increased marketpressures with respect to prevailing wage rates,unemployment levels,and health and other insurance costs;the impact of legislation orregulations governin

275、g labor relations,employment,immigration,minimum wage,and healthcare benefits;changing demographics andexpectations among the workforce;public health concerns;and our reputation within the labor market.We also compete with other retailbusinesses for many of our associates in hourly positions,and we

276、invest significant resources in training and motivating them to maintain a highlevel of job satisfaction.These positions often have high turnover rates,which can lead to increased training and retention costs,particularly in acompetitive labor market.We have faced and may continue to face additional

277、 challenges in recruiting and retaining associates due to wagepressure;flexible scheduling needs;health and safety concerns;and challenges related to a remote or hybrid working environment forassociates who work in our store support centers.We are also subject to labor union efforts to organize grou

278、ps of our associates from time totime and,if successful,those organizational efforts may decrease our operational flexibility and efficiency,and/or otherwise negatively impact ouroperations or reputation.These factors,together with competition among potential employers,have resulted in and may conti

279、nue to result inincreased salaries,benefits,or other employee-related costs,and/or may impair our ability to recruit and retainFiscal 2023 Form 10-K13Table of Contentsassociates,which could have an adverse impact on our business operations,financial condition and results of operations.In addition,to

280、 execute our interconnected retail strategy,including our supply chain investments,we must attract and retain a large number ofskilled professionals,including technology professionals,to implement our ongoing technology and other investments.The market for theseprofessionals is very competitive.An i

281、nability to provide wages and/or benefits,including remote or hybrid work flexibility,that are competitivewithin the markets in which we operate could adversely affect our ability to retain and attract associates.Further,changes in marketcompensation rates may adversely affect our labor costs.Additi

282、onally,our ability to successfully execute organizational changes,including management transitions within the Companys seniorleadership,and to effectively motivate and retain associates is critical to our business success.If we are unable to locate,attract or retainqualified associates,or manage lea

283、dership transitions successfully,our ability to effectively manage our strategy may be negatively impacted,the quality of service we provide to our customers may decrease,and our financial performance may be adversely affected.A failure of a key information technology system or process could adverse

284、ly affect our business.We rely extensively on information technology systems and related personnel to collect,use,retain,manage,transmit,and protect transactionsand data.Some of these systems are managed or provided by third-party service providers,including certain cloud platform providers.Inmanagi

285、ng our business,we also rely heavily on the integrity of,security of,and consistent access to,systems that provide operational andfinancial data and capabilities related to sales(both in store and online),customer data,supplier data,associate data,job applicant data,partnerdata,demand forecasting,me

286、rchandise ordering,inventory replenishment,supply chain management,payment processing,order fulfillment,customer service,and post-purchase matters.For these information technology systems,applications,and processes to operate effectively,weor our service providers must maintain and update them.Delay

287、s in the maintenance,updates,upgrading,or patching of these systems,applications or processes,as well as the actions taken to maintain,update,upgrade and patch,could,and on occasion have,impaired theireffectiveness or exposed us to security risks.Our systems and the third-party systems with which we

288、 interact,as well as any systems those thirdparties utilize,are subject to and on occasion have experienced damage,interruption,or malicious activity from a number of causes,includingpower and other critical infrastructure outages;computer and telecommunications failures;computer viruses;data or sec

289、urity breaches;internalor external data theft or misuse;cyber-attacks,including the use of malicious codes,worms,phishing,smishing,vishing,spyware,denial ofservice attacks,and ransomware;responsive containment measures by us that may involve voluntarily taking systems offline;natural disastersand ca

290、tastrophic events such as fires,floods,earthquakes,tornadoes,hurricanes,or other extreme weather events;public health concerns,such as pandemics and quarantines;geopolitical or military conflicts,acts of war,terrorism or civil unrest;other systems outages;inadequate orineffective redundancy;and desi

291、gn or usage errors or malfeasance by our associates,contractors or third-party service providers.In addition,asmore business activities have shifted online,and as many of our store support associates continue to work in a remote or hybrid environment,we face an increased risk due to the potential fa

292、ilure of internal or external information technology infrastructure as well as increasedcybersecurity threats and attempts to breach our security networks.Although we and our third-party service providers seek to maintain our respective systems effectively and to successfully address the risk ofcomp

293、romise of the integrity,security and consistent operations of these systems,such efforts are not always successful.As a result,we or ourservice providers could experience and on some occasions have experienced errors,interruptions,delays or cessations of service in keyportions of our information tec

294、hnology infrastructure,which could significantly disrupt our operations or impair data security;impact our ability tooperate or access communications,financial or banking systems;be costly,time-consuming and resource-intensive to remedy;and adverselyimpact our reputation and relationship with our cu

295、stomers,associates,suppliers,shareholders or regulators.We may have to expend significantresources to mitigate the impact of any errors,interruptions,delays or cessations of service and may have insufficient recourse against serviceproviders who experience such events.In addition,we are currently ma

296、king,and expect to continue to make,substantial investments in our information technology systems,infrastructure and personnel,in certain cases with the assistance of strategic partners and other third-party service providers.These investmentsinvolve replacing existing systems,some of which are olde

297、r,legacy systems that are less flexible and efficient,with successor systems;outsourcing certain technology and business processes to third-party service providers;making changes to existing systems,including themigration of applications to the cloud;maintaining or enhancing legacy systems that are

298、not currently being replaced;designing or cost-effectively acquiring new systems with new functionality;or testing the use and incorporation of artificialFiscal 2023 Form 10-K14Table of Contentsintelligence,including generative artificial intelligence.These efforts could result,and on occasion have

299、resulted,in significant potential risks,including failure of the systems to operate as designed,unexpected impacts on related systems or processes,potential loss or corruption ofdata,failures in security processes and internal controls,cost overruns,implementation delays or errors,disruption of oper

300、ations,and thepotential inability to meet business and reporting requirements.Any system implementation and transition difficulty may result in operationalchallenges,security failures,reputational harm,and increased costs that could adversely affect our business operations,our relationships withour

301、customers,and results of operations.Disruptions in our customer-facing technology systems could impair our interconnected retail strategy and give rise to negativecustomer experiences.Through our information technology systems,we are able to provide an improved overall shopping and interconnected ex

302、perience thatempowers our customers to shop and interact with us from a variety of electronic devices and digital platforms at each stage of their shoppingjourney.We use our digital platforms as sales channels for our products and services,as methods of providing inspiration,and as sources ofproduct

303、,project,and other relevant information to our customers to help drive sales.We also have multiple online communities,digital platforms,and knowledge centers that allow us to inform,assist and interact with our customers.The retail industry is continually evolving and expanding,with a significant in

304、crease in sales initiated online and via mobile applications in recent years.We may not be successful at managing thisincreased volume and related delivery options without interruption in the future.Additionally,we must effectively respond to new developmentsand changing customer preferences with re

305、spect to a complex,evolving digital and interconnected experience.We continually seek to enhanceall of our online and digital properties to provide a personalized,user-friendly interface for our customers.Disruptions,delays,failures or otherperformance issues with our customer-facing technology syst

306、ems,either due to increased volume,system modifications,or other factors,or afailure of these systems to meet our or our customers expectations,could impair the value they provide,adversely impact our sales,andnegatively affect our relationship with our customers.Disruptions in our supply chain and

307、other factors affecting the availability and distribution of our merchandise could adversely impactour business.Disruption within our logistics or supply chain network,such as the industry-wide supply chain challenges that resulted from the COVID-19pandemic,have in the past and may in the future adv

308、ersely affect our ability to receive and deliver inventory in a timely manner,impair our abilityto meet customer demand for products,and result in lost sales,increased supply chain costs,and/or damage to our reputation.Such disruptionsmay result from damage or destruction to our distribution or fulf

309、illment centers or those of our supply chain service providers;weather-relatedevents;cybersecurity incidents or attacks;natural disasters;international trade disputes,trade policy changes or restrictions,or import-orexport-related governmental sanctions or restrictions;customs actions,including regu

310、latory enforcement inquiries,holds,detentions,andexclusions;quotas,tariffs or other import-related taxes;strikes,lock-outs,work stoppages or slowdowns;shortages of supply chain labor,including truck drivers;shipping capacity constraints,including shortages of related equipment;raw material or other

311、shortages;third-partycontract disputes or inability to maintain favorable contract terms;supply or shipping interruptions or costs;increased costs or unavailability offuel;geopolitical or military conflicts or acts of war,as well as any related sanctions or other government or private responses;acts

312、 of terrorism;public health issues,including pandemics or quarantines and other related impacts;civil unrest;or other factors beyond our control.In recentyears,ports in the U.S.and elsewhere have been impacted by capacity constraints,port congestion and delays,periodic labor disputes,securityissues,

313、weather-related events,and natural disasters.As we saw during the heights of the COVID-19 pandemic,these types of disruptions place strain on the domestic and international supply chain,which affected and may in the future negatively affect the flow or availability of certain products.Even when we a

314、re able to find alternate sourcesfor certain products,they may cost more or require us to incur higher transportation costs,which could adversely impact our profitability andfinancial condition.Increased demand for online purchases of products,which we experienced during the COVID-19 pandemic,can im

315、pact ourfulfillment operations,as well as those of our third-party carriers,resulting in delays in delivering products to customers and increases in our out-of-stock levels.We and our suppliers have experienced,and may continue to experience,labor shortages at some of our distribution and fulfillmen

316、t centers bothdue to unexpected events such as the COVID-19 pandemic and to the competitive labor market.Such labor shortages,whether temporary orsustained,may adversely impact the flow or availability of products to our stores and customers.Fiscal 2023 Form 10-K15Table of ContentsAny of these circu

317、mstances could impair our ability to meet customer demand for products and result in lost sales,increased supply chain costs,or damage to our reputation,any of which could negatively impact our business performance or financial condition.Failure to maintain a safe and secure store environment may ad

318、versely impact sales,costs,the customer and associate experience,orour brand and reputation.Our customers and associates expect a safe store environment in which to shop and work,and maintaining that environment helps protectagainst loss or theft of our inventory(also called“shrink”).Like other reta

319、ilers,we have seen an increase in shrink in recent years,particularly asa result of organized retail crime.While we have a number of initiatives underway to address shrink,minimize theft,and maintain safety in andaround our stores,these efforts require operational changes that may increase costs and

320、 reduce margins,and they may negatively impact thecustomer experience.Furthermore,an unsafe environment or negative incidents in or around our stores may erode trust and confidence withcustomers,associates,or potential associates,which can adversely impact sales,associate morale and retention,and ou

321、r brand and reputation.If our efforts to maintain the privacy and security of customer,associate,job applicant,business partner,and Company informationare not successful,we could incur substantial costs and reputational damage and could become subject to litigation and enforcementactions.Our busines

322、s,like that of most retailers,involves the collection,use,retention,management,transmission,and deletion of personal information(including identifiers,localization,internet activity,preferences,and payment information)from our customers,associates,job applicants,andbusiness partners,as well as confi

323、dential Company information.We also work with third-party service providers that provide technology,systemsand services that we use in connection with the handling of information.Our information systems,and those of our third-party service providers,are vulnerable to continually evolving data protec

324、tion and cybersecurity risks.Unauthorized parties have in the past gained access,and willcontinue to attempt to gain access,to these systems and data through fraud or other means of deceiving or coercing our associates or third-party service providers,which could jeopardize the confidentiality,integ

325、rity,or availability of such information systems or our information.Hardware,software or applications we develop or obtain from third parties may contain exploitable vulnerabilities,bugs,or defects in design,maintenance or manufacture or other problems that could unexpectedly compromise information

326、security.We have experienced and continue toface the ongoing risk of exploitation of our software providers and our software development and implementation process,including from codingand process vulnerabilities and the installation of so-called back doors that provide unauthorized access to system

327、s and data.The increased useof a remote workforce has also expanded the possible attack surface areas.In addition,the risk of cyber-attacks has increased in connectionwith geopolitical conflicts and ongoing trade and diplomatic tensions.In light of the conflicts in Europe and the Middle East and oth

328、er geopoliticalevents,nation-state actors or their supporters may launch retaliatory cyber-attacks,and may attempt to cause supply chain and other third-partyservice provider disruptions,or take other geopolitically-motivated retaliatory actions that may disrupt our business operations,result in dat

329、acompromise,or both.Nation-state actors have in the past carried out,and may in the future carry out,cyber-attacks to achieve their aims andgoals,which may include espionage,monetary gain,disruption,and destruction.To achieve their objectives,nation-state actors and other cybercriminals have used an

330、d may continue to use numerous attack vectors and methods,including use of stolen passwords,social engineering,phishing,smishing,vishing,identity spoofing,ransomware or other disruptive and destructive malware,supply chain compromises,and man-in-the-middle and denial of service attacks.The methods u

331、sed to obtain unauthorized access,disable or degrade service,or sabotage systems areconstantly changing and evolving,increasing in frequency and sophistication,and may be difficult to anticipate or detect for long periods of time.The ever-evolving cybersecurity threat landscape means that we and our

332、 third-party service providers and business partners must continuallyevaluate and adapt our respective systems and processes and overall security environment,as well as those of companies we or they acquire.There is no guarantee that the measures we take will be adequate to safeguard against all thr

333、eats,including vulnerabilities,data securitybreaches,system compromises or misuses of data.As we have experienced in the past,any significant compromise or breach of our datasecurity,whether external or internal,or misuse of customer,associate,job applicant,business partner,or Company data,could result insignificant costs,including costs to investigate and remediate,as well as lost sales,fines,law



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