The Home Depot, Inc.Atlanta, GA, United States (NYSE: HD)

Remodeling Activity Down - Home center and hardware store sales are impacted by residential home remodeling activity due to contractor and homeowner demand for tools and materials. Remodeling market conditions dropped 15 percent to 40.9 in fourth quarter 2007 from the previous year, according to the National Association of Home Builder's (NAHB) Remodeling Market Index (RMI); an index over 50 indicates improving market conditions. The three major categories influencing the remodeling market were down from the same period a year ago: major additions and alterations, 15.7 percent; minor additions and alterations, 12.2; and maintenance and repair, 18.9.

Housing Market Affects Hardware Sales Less - Hardware store sales depend primarily on remodeling activity, while the competition, building material supply dealers, depends heavily on new construction. Remodeling activity has been affected by the current US housing downturn, but not to the extent of the rest of the housing market, according to NAHB. US hardware stores sales rose 9.3 percent to $21.3 billion in 2007 compared to 2006, while building materials and supplies dealer sales fell 2.9 percent.

Training Program Boosts Product Knowledge - Home centers and hardware stores differentiate themselves and improve sales by training employees about products. The Canadian Retail Building Supply Council will offer the North American Retail Hardware Association (NRHA) its product knowledge training program to NRHA members. The program, which is customized for Canadian dealers, uses interactive modules to train employees on subjects that hardware and home improvement retailers need to differentiate themselves.