Despite impressive growth since 2010, Home Depot CFO Carol Tomé warns that slowing housing market growth coupled with the falling prices of raw materials could hurt company growth by a minimum of two percentage points. On Tuesday, February 25, 2014, Home Depot announced a 21 percent increase of 47 cents per share over the prior dividend, but diminished growth may be around the corner.Currently, Home Depot is enjoying the boost of exceeding analysts’ expectations and continuing growth through 2013. Tomé recognizes, however, that macro and housing data are signaling growth in the housing recovery, which in turn will impact business. For instance, average home prices are expected to improve by six percent in 2014. While impressive, that’s only half the growth rate of the year prior. As home values increase, so does Home Depot’s ability to raise prices in lockstep. Slowing home price improvements will likely erode that benefit.
Home Depot is also coming off its strongest fiscal year in 14 years, which has further dampened expectations for 2014. Still, its stock is up almost two percent. Tomé also reveals that she is pleased Wells Fargo has loosened its restrictions on mortgage lending terms, which should help the housing market further its recovery.
Lessons from CFO Carol Tomé
After a successful 2013 at Home Depot, CFO Carol Tomé is perhaps the most powerful Atlanta businesswoman. Aside from her 14 years at Home Depot, she also serves on the Metro Atlanta Chamber and Atlanta Federal Reserve Bank. According to Tomé, the most important aspect of any business profession is to stay “focused on your core business.” When Tomé first joined Home Depot, she began as treasurer, working beneath all four CEOs in the company’s history.
Tomé was told she would be given the opportunity to reach her full potential, and consequently, she’s worked her way to CFO. Tomé likes to offer the same opportunities to her team, and she encourages other business leaders to give their employees options to grow. Loyalty to company, mission, and brand are of the utmost importance to Carol Tomé, who says she “bleeds orange.”
How are you building a strong foundation for your team and business?