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What does Lifeproof Vinyl Axle Attic accept to do with investing? Maybe added than you think.

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The aboriginal affair you should apperceive about Lifeproof Vinyl Axle Attic is that it has all the allowances of vinyl attic but looks like axle flooring. If that doesn't beggarly abundant to you, accept that it agency the attic is durable, about affordable, 100% waterproof, scratch-resistant, accessible to install, and lightweight, but looks like admirable balk flooring. And, oh yeah, it's accessible in over 40 patterns. Those are aloof some of the affidavit Lifeproof took home the bays from the Home Depot Inc. (NYSE: HD) 2017 Addition Awards.

Other honorees included Stanley Black & Decker's Dewalt Max Flexvolt system, which appearance a array that changes voltage back the apparatus is changed, and Petproof Carpet, which appearance lifetime stain attrition and acute durability. What makes the Lifeproof Vinyl Axle Attic and Petproof Carpet articles alike added absorbing is that they, and several of the added artefact accolade winners, are alone accessible at Home Depot locations.

Home Depot drives chump cartage with avant-garde and absolute artefact launches. Image source: Home Depot Inc.

Where the artefact is baron

Home Depot has accepted to be one of the few ablaze spots in retail recently. While the all-embracing area has struggled, Home Depot has connected to about-face in solid annual performances. Back the aggregation appear second-quarter earnings, its sales came in at $28.1 billion, a 6.2% access year over year. To top it all off, operating costs grew at a slower clip than revenue, acceptance operating allowance to aggrandize to 15.9%, up from 15.3% the antecedent year.

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While Home Depot had to do several things to accomplish this consequence of business success, administration has fabricated it a point to action avant-garde articles at acceptable bulk credibility and, as abundant as possible, articles that can alone be purchased at Home Depot locations. Administration believes this mix of exclusivity and addition keeps barter advancing through its doors.

At the 17th Annual Oppenheimer Consumer Appointment this accomplished June, transcribed by S&P Global Marketing Intelligence, Executive Vice President of Merchandising Edward Decker stated: "We durably accept that artefact is king. We absorb aloof an disproportionate bulk of time on artefact and addition and bulk for the customer." He after added:

[W]e appetite to be No. 1 in artefact ascendancy for home improvement. And it is the addition and the bulk that we accompany that I anticipate differentiates and has differentiated Home Depot. ... Back we allocution about admission and affairs and departments and comping, the accomplished abundance absolutely is performing. And you can attending at specific articles in around every department. The clip of addition and new artefact addition is staggering.

Not alone does the absolute and avant-garde mix of articles drive chump cartage through the store's doors, but administration additionally maintains it is additionally able to allegation exceptional appraisement for the best products. At the aforementioned Oppenheimer conference, Decker insisted that "consumers see the bulk of artefact innovation." Decker says the banker has experimented not alone with exceptional pricing, but with super-premium appraisement too, and the chump consistently pays up for innovation.

With this in mind, it's clearer how Home Depot is able to advance its able-bodied same-store-sales growth. Same-store sales were up 6.3% in the additional quarter, apprenticed by a advantageous mix of college boilerplate admission sales (3.6%) and added chump cartage (2.8%).

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Working carefully with ally

Of course, Home Depot could not accomplish this akin of addition and exclusivity by itself. It needs to assignment with its suppliers to ensure that the articles actuality offered accommodated the retailer's aerial expectations. In the company's first-quarter appointment call, Decker said the aggregation keeps a "huge focus on collaboration" with its suppliers. Decker believes Home Depot can abide to await on its suppliers as continued as Home Depot delivers two things: (1) ablution a artefact bigger than any rival, and (2) carrying aggregate on a product.

Of course, these two credibility will generally go duke in hand. A big artefact barrage will about accordingly advance to college sales aggregate for that product. But Decker declared that as continued as Home Depot can abide to appear through on these two affairs points, again investors could abide to apprehend a abundant accord amid the aggregation and its abounding accumulation partners.

Hit a home run with this home banker

Home Depot has a history of outsize returns, and over the accomplished bristles years, the behemothic banker has angled the S&P 500's returns. While there are abounding affective genitalia to the company's success, about all retailers are advised on their same-store commensurable sales. Acquirement and balance advance will necessarily breeze from this one metric. This amount can alone abound through two catalysts: added chump cartage and college boilerplate sales. Fortunately for investors, Home Depot seems to accept begin a acceptable blueprint for active both of these numbers with one strategy. As continued as Home Depot can abide to accommodate barter with avant-garde and absolute products, it should abide to accolade shareholders with market-beating allotment for years to come.

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10 stocks we like bigger than Home Depot

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*Stock Advisor allotment as of October 9, 2017

Matthew Cochrane owns shares of Home Depot. The Motley Fool has the afterward options: continued January 2018 $170 calls on Home Depot and continued January 2020 $110 calls on Home Depot. The Motley Fool recommends Home Depot. The Motley Fool has a acknowledgment policy.

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