Home Depot's New CEO: What's Wall Street Saying
NEW YORK ( TheStreet) - Home Depot
TheStreet's Jim Cramer says Home Depot's new CEO will have big shoes to fill:
Menear was named president of Home Depot's U.S. retail operations in February of this year. He is a 34-year retail veteran and is a "key leader in the company's success," the Atlanta-based company said in the press release. "In addition to his role as chief merchant, Menear has overseen the company's supply chain efforts, its rapidly growing online and private brand businesses and the company's marketing and global sourcing," according to the release.
Blake has been Chairman and CEO of the company for the past seven years, leading the company through the recession. Since January 2007, when Blake came on, shares have risen 126%, outpacing the 40% gain in the S&P 500 .
Read More: Home Depot's Online Sales Sizzle
On Tuesday, Home Depot reported second-quarter earnings of $2.1 billion, or $1.52 a share, compared to $1.8 billion, or $1.24 a share in the year-earlier period. Sales rose 5.7% to $23.8 billion for the quarter, while comparable store sales for U.S. stores rose 6.4%.
Home Depot shares were falling 0.34% on Friday to $90.84.
Here's what Wall Street analysts were saying about the succession plan:
Christopher Horvers, JPMorgan Chase (Overweight; $98 PT)
Craig joined HD in 1997 (which may have felt like a top to him in the early to mid 2000s) and rose up to EVP Merchandising, where he led the company's merchandising and supply chain transformation, until he was promoted to President earlier this year. We had the opportunity to host a series of investor meetings in July and he is clearly the cultural flag bearer of HD and deeply in touch with merchandising. We asked him "what three adjectives would your wife use to describe you?" His response was: detailed, collaborative, and fiercely competitive (and compassionate). Anecdotally, others who have worked closely with Craig have mentioned "you went to him when you wanted to truth and the right answer" and they would consider him the "smartest guy in the room."
Alan M. Rifkin, Barclays Capital ( $100 PT)
We believe that Home Depot's successes since 2009, during which time Home Depot EBIT margins have risen more than 500 bps together with over twenty quarters of out-comping Lowe's, have been based, in large part, on its impressive merchandising strategy. With this in mind, while we are obviously disappointed that Mr. Blake will be bringing his highly successful tenure as CEO to an end, we believe that Home Depot is in good hands as the company continues to take advantage of the opportunities afforded by the most recent housing recovery. Ultimately, we think Mr. Menear's ambition will be to facilitate an even more cohesive relationship between the company's two most critical channels - its stores and e-commerce presence.