1、ANNUAL REPORT 2022UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended January 29,2023orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXC

2、HANGE ACT OF 1934For the transition period from to Commission file number 1-8207 THE HOME DEPOT,INC.(Exact name of registrant as specified in its charter)Delaware95-3261426(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)2455 Paces Ferry RoadAtlanta,Ge

3、orgia30339(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(770)433-8211Securities registered 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 Yo

4、rk Stock ExchangeSecurities registered pursuant to section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned 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

5、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(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),a

6、nd(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(

7、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 accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large acce

8、lerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the r

9、egistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant 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

10、 of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check ma

11、rk whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation r

12、eceived by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant 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 t

13、he registrant on July 29,2022 was$308.0 billion.The number of shares outstanding of the registrants common stock as of March 1,2023 was 1,014,955,506 shares.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants proxy statement for the 2023 Annual Meeting of Shareholders are incorporated by

14、reference in Part III of this Form 10-K to the extent described herein.Table of ContentsTABLE OF CONTENTSCommonly Used or Defined TermsiiForward-Looking StatementsiiiPART IItem 1.Business.1Item 1A.Risk Factors.10Item 1B.Unresolved Staff Comments.22Item 2.Properties.22Item 3.Legal Proceedings.23Item

15、4.Mine Safety Disclosures.24PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.24Item 6.Reserved.25Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.25Item 7A.Quantitative and Qualitative

16、Disclosures About Market Risk.32Item 8.Financial Statements and Supplementary Data.33Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.62Item 9A.Controls and Procedures.63Item 9B.Other Information.65Item 9C.Disclosure Regarding Foreign Jurisdictions that Pre

17、vent Inspections.65PART IIIItem 10.Directors,Executive Officers and Corporate Governance.65Item 11.Executive Compensation.66Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.66Item 13.Certain Relationships and Related Transactions,and Director Ind

18、ependence.66Item 14.Principal Accountant Fees and Services.66PART IVItem 15.Exhibit and Financial Statement Schedules.67Item 16.Form 10-K Summary.71SIGNATURES72Fiscal 2022 Form 10-KiCOMMONLY USED OR DEFINED TERMSASUAccounting Standards UpdateBODFSBuy Online,Deliver From StoreBOPISBuy Online,Pickup I

19、n StoreBORISBuy Online,Return In StoreBOSSBuy Online,Ship to StoreCDPThe not-for-profit organization formerly known 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.Enviro

20、nmental Protection AgencyESGEnvironmental,social,and governanceESPPEmployee Stock Purchase PlanExchange ActSecurities 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(inc

21、ludes 52 weeks)fiscal 2022Fiscal year ended January 29,2023(includes 52 weeks)fiscal 2023Fiscal year ending January 28,2024(includes 52 weeks)GAAPU.S.generally accepted accounting principlesIRSInternal Revenue ServiceLIBORLondon interbank offered rateMD&AManagements Discussion and Analysis of Financ

22、ial Condition and Results of OperationsMROMaintenance,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 investe

23、d capitalSECSecurities and Exchange CommissionSecurities ActSecurities Act of 1933,as amendedSG&ASelling,general,and administrativeTermDefinitionTable of ContentsFiscal 2022 Form 10-KiiFORWARD-LOOKING STATEMENTSCertain statements contained herein,as well as in other filings we make with the SEC and

24、other written and oral information we release,regarding our performance or other events or developments in the future constitute“forward-looking statements”as defined in the Private Securities Litigation Reform Act of 1995.Forward-looking statements may relate to,among other things,the demand for ou

25、r products and services;net sales growth;comparable sales;the effects of competition;our brand and reputation;implementation of store,interconnected retail,supply chain and technology initiatives;inventory and in-stock positions;the state of the economy;the state of the housing and home improvement

26、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 of relationships with our associates,potential associates,suppliers and service providers;cos

27、t and availability of labor;costs of fuel and other energy sources;international trade disputes,natural disasters,climate change,public health issues(including the continuing impacts of the COVID-19 pandemic and the related recovery),cybersecurity events,military conflicts or acts of war,supply chai

28、n disruptions,and other business interruptions that could compromise data privacy or disrupt operation of our stores,distribution centers and other facilities,our ability to operate or access communications,financial or banking systems,or supply or delivery of,or demand for,our products or services;

29、our ability to address expectations regarding ESG matters and meet ESG goals;continuation or suspension of share repurchases;net earnings performance;earnings per share;dividend targets;capital allocation and expenditures;liquidity;return on invested capital;expense leverage;changes in interest rate

30、s;changes in foreign currency exchange rates;commodity or other price inflation and deflation;our ability to issue debt on terms and at rates acceptable to us;the impact and expected outcome of investigations,inquiries,claims,and litigation,including compliance with related settlements;the challenge

31、s of international operations;the adequacy of insurance coverage;the effect of accounting charges;the effect of adopting certain accounting standards;the impact of legal and regulatory changes,including changes to tax laws and regulations;store openings and closures;financial outlook;and the impact

32、of acquired companies on our organization and the ability to recognize the anticipated benefits of any acquisitions.Forward-looking statements are based on currently available information and our current assumptions,expectations and projections about future events.You should not rely on our forward-

33、looking statements.These statements are not guarantees of future performance and are subject to future events,risks and uncertainties many of which are beyond our control,dependent on the actions of third parties,or currently unknown to us as well as potentially inaccurate assumptions that could cau

34、se actual results to differ materially from our historical experience and our expectations and projections.These risks and uncertainties include,but are not limited to,those described in Part I,Item 1A.Risk Factors,and elsewhere in this report and also as may be described from time to time in future

35、 reports we file with the SEC.You should read such information in conjunction with our consolidated financial statements and related notes and Part II,Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations in this report.There also may be other factors that we ca

36、nnot anticipate or that are not described herein,generally because we do not currently perceive them to be material.Such factors could cause results to differ materially from our expectations.Forward-looking statements speak only as of the date they are made,and we do not undertake to update these s

37、tatements other than as required by law.You are advised,however,to review any further disclosures we make on related subjects in our filings with the SEC and in our other public statements.Table of ContentsFiscal 2022 Form 10-KiiiPART IItem 1.Business.INTRODUCTIONThe Home Depot,Inc.is the worlds lar

38、gest home improvement retailer based on net sales for fiscal 2022.We offer our customers a wide assortment of building materials,home improvement products,lawn and garden products,dcor products,and facilities maintenance,repair and operations products.We also provide a number of services,including h

39、ome improvement installation services and tool and equipment rental.As of the end of fiscal 2022,we operated 2,322 stores located throughout the U.S.(including the Commonwealth of Puerto Rico and the territories of the U.S.Virgin Islands and Guam),Canada,and Mexico.The Home Depot stores average appr

40、oximately 104,000 square feet of enclosed space,with approximately 24,000 additional square feet of outside garden area.We also maintain a network of distribution and fulfillment centers,as well as a number of e-commerce websites in the U.S.,Canada and Mexico.When we refer to“The Home Depot,”the“Com

41、pany,”“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 Delaware corporation that was incorporated in 1978.Our Store Support Center(corporate headquarters)is located at 2455 Paces Ferry Road,Atlanta,Georgia 30339.Our telep

42、hone number at that address is(770)433-8211.OUR BUSINESSOUR STRATEGYThe retail landscape has changed rapidly over the past several years,with customer expectations constantly evolving.In fiscal 2022,we continued to operate with agility to meet the challenges created by a fluid domestic and global bu

43、siness environment,including supply chain disruptions,tight labor market conditions,and ongoing inflationary pressures.Our ability to operate successfully and meet the needs of our customers was due in significant part to our investments over the past several years aimed at creating an interconnecte

44、d,frictionless shopping experience that enables our customers to seamlessly blend the digital and physical worlds.Going forward,we will leverage the momentum of these investments and continue to invest in our business in support of the following goals:We intend to provide the best customer experienc

45、e in home improvement;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 shareholders.We are steadfas

46、t in this commitment,while also recognizing that exercising corporate responsibility and being informed by the needs of our other stakeholders,including our customers,associates,supplier partners,and communities,creates value for all stakeholders,including our shareholders.DELIVER SHAREHOLDER VALUE

47、We deliver on our objective to create shareholder value through our disciplined approach to capital allocation.Our capital allocation principles are as follows:First,we intend to reinvest in our business to drive growth faster than the market.Second,after meeting the needs of the business,we look to

48、 pay a quarterly dividend,which we intend to increase as we grow earnings.Third,after reinvesting in our business and paying our dividend,we intend to return excess cash to our shareholders through share repurchases.In fiscal 2022,we invested$3.1 billion in capital expenditures to support our busine

49、ss,advance our goals,and continue to build an interconnected customer experience.We also focused on driving productivity throughout the business to lower our costs.The combination of reinvesting in the business to drive higher sales and supporting productivity to lower costs creates what we refer to

50、 as a virtuous cycle,which has allowed us to improve the customer experience,increase our competitiveness in the market,and deliver shareholder value.In fiscal 2022,we returned over$14 billion to shareholders in the form of cash dividends and share repurchases.Our capital allocation is discussed fur

51、ther in Part II,Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.Table of ContentsFiscal 2022 Form 10-K1OUR CUSTOMERSWe serve two primary customer groups consumers(including both DIY and DIFM customers)and professional customers and have developed varying a

52、pproaches to meet their diverse needs:DIY CustomersThese customers are typically homeowners who purchase products and complete their own projects and installations.Our associates assist these customers both in our stores and through online resources and other media designed to provide product and pr

53、oject knowledge.We also offer a variety of clinics and workshops both to share this knowledge and to build an emotional connection with our DIY customers.Professional Customers(or“Pros”)These customers are primarily professional renovators/remodelers,general contractors,maintenance professionals,han

54、dymen,property managers,building service contractors and specialty tradespeople,such as electricians,plumbers and painters.These customers build,renovate,remodel,repair,and maintain residential properties,multifamily properties,hospitality properties,and commercial facilities,including education,hea

55、lthcare,government,institutional,and office buildings.We have a number of initiatives designed to drive growth with our Pros,including a customized online experience,a dedicated sales force,an extensive delivery network,our Pro Xtra loyalty program,enhanced credit offerings,and inventory management

56、programs.Building on our historical strength as a destination for urgent purchase needs,we are investing in capabilities that will help us better serve our Pros planned purchase needs(in-store or via our dedicated sales team),including our expanded supply chain capabilities and advance ordering thro

57、ugh our interconnected digital platforms.We believe that focusing on meeting the Pros planned purchase needs,particularly for larger renovator/remodeler Pros,will help us drive growth and deliver value to our shareholders.We extended our reach in the MRO marketplace with our fiscal 2020 acquisition

58、of HD Supply,a leading national distributor and provider of MRO products and related value-added services to multifamily,hospitality,healthcare,and government housing facilities,among others,and in fiscal 2021 we integrated our legacy Interline Brands business into HD Supply.Our MRO operations use a

59、 distribution center-based model that sells products primarily through a professional sales force and through e-commerce platforms and print catalogs.We recognize the great value our Pros provide to their clients,and we strive to make their jobs easier and help them grow their businesses.We believe

60、that investments aimed at deepening our relationships with our Pros are yielding increased engagement and will continue to translate into incremental sales to these customers.DIFM CustomersIntersecting our DIY customers and our Pros are our DIFM customers.These customers are typically homeowners who

61、 use Pros to complete their project or installation.Currently,we offer installation services in a variety of categories,such as flooring,water heaters,bath,garage doors,cabinets,cabinet makeovers,countertops,sheds,furnaces and central air systems,and windows.DIFM customers can purchase these service

62、s in our stores,online,or in their homes through in-home consultations.In addition to serving our DIFM customer needs,we believe our focus on the Pros who perform services for these customers helps us drive higher product sales.OUR PRODUCTS AND SERVICESA typical The Home Depot store stocks approxima

63、tely 30,000 to 40,000 items during the year,including both national brand name and proprietary products.Our online product offerings complement our stores by serving as an extended aisle,and we offer a significantly broader product assortment through our websites and mobile applications,including ,o

64、ur primary website;homedepot.ca and .mx,our websites in Canada and Mexico;,our website for our MRO products and related services;,our online site for custom window coverings;and ,our online site featuring textiles and dcor products.We believe our merchandising organization is a key competitive advan

65、tage,delivering product innovation,assortment and value,which reinforces our position as the product authority in home improvement.In fiscal 2022,we continued to invest in merchandising resets in our stores to refine assortments,optimize space productivity,introduce innovative new products to our cu

66、stomers,and improve visual merchandising to drive a better shopping experience.At the same time,we remain focused on offering everyday values in our stores and online.To help our merchandising organization keep pace with changing customer expectations and increasing desire for innovation,localizatio

67、n,and personalization,we are continuing to invest in tools to better leverage our data and drive a deeper level of collaboration with our supplier partners.As a result,we have continued to focus on enhanced Table of ContentsFiscal 2022 Form 10-K2merchandising information technology tools to help us:

68、(1)build an interconnected shopping experience that is tailored to our customers shopping intent and location;(2)provide the best value in the market;and(3)optimize our product assortments.Our merchandising team leverages technology and works closely with our inventory and supply chain teams,as well

69、 as our supplier partners,to manage our assortments,drive innovation,and adjust inventory levels to respond to fluctuations in demand,which helped us navigate the challenges of continuing global supply chain disruption in fiscal 2022.As cost pressures have risen in several product categories in the

70、current environment,our tools have helped our merchandising,finance and data analytics teams as they work with our supplier partners to manage these pressures.To complement our merchandising efforts,we offer a number of services for our customers,including installation services for our DIY and DIFM

71、customers,as noted above.We also provide tool and equipment rentals at locations across the U.S.and Canada,providing value and convenience for both Pros and consumers.To improve the customer experience and continue to grow this differentiated service offering,we are continuing to invest in more loca

72、tions(including piloting rental locations in Mexico),more tools,and better technology.Sourcing and Quality AssuranceWe maintain a global sourcing program to obtain high-quality and innovative products directly from manufacturers in the U.S.and around the world.During fiscal 2022,in addition to our U

73、.S.sourcing operations,we maintained sourcing offices in Mexico,Canada,China,India,Vietnam and Europe.To ensure that suppliers adhere to our high standards of social and environmental responsibility,we also have a global responsible sourcing program.Under our supplier contracts,our suppliers are obl

74、igated to ensure that their products comply with applicable international,federal,state and local laws.These contracts also require compliance with our responsible sourcing standards,which cover a variety of expectations across multiple areas of social compliance,including supply chain transparency,

75、compliance with local laws,health and safety,environmental laws and regulations,compensation,hours of work,and prohibitions on child and forced labor.To drive accountability with our suppliers,our standard supplier buying agreement includes a factory audit right related to these standards,and we con

76、duct factory audits and compliance visits with non-Canada and non-U.S.suppliers of private branded and direct import products.Our 2022 Responsible Sourcing Report,available on our website at https:/ under“Responsibility Sourcing Responsibly,”provides more information about this program.In addition,w

77、e have both quality assurance and engineering resources dedicated to establishing criteria and overseeing compliance with safety,quality and performance standards for our private branded products.Intellectual PropertyOur business has one of the most recognized brands in North America.As a result,we

78、believe that The Home Depot trademark has significant value and is an important factor in the marketing of our products,e-commerce,stores and business.We have registered or applied for registration of trademarks,service marks,copyrights and internet domain names,both domestically and internationally

79、,for use in our business,including our proprietary brands such as HDX,Husky,Hampton Bay,Home Decorators Collection,Glacier Bay,Vigoro,Everbilt and Lifeproof.The duration of trademark registrations varies from country to country.However,trademarks are generally valid and may be renewed indefinitely a

80、s long as they are in use and/or their registrations are properly maintained.We also maintain patent portfolios relating to our business operations,retail services,and products,and we seek to patent or otherwise protect innovations we incorporate into our business.Patents generally have a term of tw

81、enty years from the date they are filed.As our patent portfolio has been built over time,the remaining terms of the individual patents across our patent portfolio vary.Although our patents have value,no single patent is essential to our business.We continuously assess our merchandising departments a

82、nd product lines for opportunities to expand the assortment of products offered within The Home Depots portfolio of proprietary and exclusive brands.COMPETITION AND SEASONALITYOur industry is highly competitive,very fragmented,and evolving.As a result,we face competition for customers for our produc

83、ts and services from a variety of retailers,suppliers,service providers,and distributors and manufacturers that sell products directly to their respective customer bases.These competitors range from traditional brick-and-mortar,to multichannel,to exclusively online,and they include a number of other

84、 home improvement retailers;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,local,regional and national hardware stores,paint stores,specialty and mass digital

85、retailers,warehouse clubs,independent building supply stores,MRO distributors,home dcor retailers,and other retailers,as well as with Table of ContentsFiscal 2022 Form 10-K3providers of home improvement services and tool and equipment rental.The internet facilitates competitive entry,price transpare

86、ncy,and comparison shopping,increasing the level of competition we face.Both in-store and online,we compete primarily based on customer experience,price,quality,product availability and assortment,and delivery options.We also compete based on store location and appearance,presentation of merchandise

87、,and ease of shopping experience.Our Pros also look for a dedicated sales team,competitive credit and pricing options,project planning tools,and product depth and job lot quantities,particularly for their planned purchase needs.Furthermore,with respect to delivery options,customers are increasingly

88、seeking faster and/or guaranteed delivery times,low-price or free shipping,and/or convenient pickup options.Our ability to be competitive on delivery and pickup times,options and costs depends on many factors,including the success of our supply chain investments,described more fully under“Our Supply

89、 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 the spring season in the regions in which we operate.INTERCONNECTED SHOPPING EXPERIENCEWe continue to enhance our capabilities to provide our customer

90、s 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 customer experience.Digital ExperienceEnhancements to our digital properties are critical for o

91、ur increasingly interconnected customers,who often research products online and check available inventory before going into one of our stores to view the products in person or talk to an associate and then make their purchase in store or online.While in the store,customers may also go online to acce

92、ss ratings and reviews,compare prices,view our extended assortment,and purchase additional products.Our investments in a truly interconnected experience are focused on bringing together the power of our physical retail presence and the frictionless interaction of our digital capabilities.A significa

93、nt majority of the traffic in our digital channels is on mobile devices.Mobile customers expect more simplicity and relevancy in their digital interactions.As a result,we have made investments to our digital properties to improve the overall presentation and ease of navigation for the user.We have a

94、lso enhanced the“shopability”of an online product by including more information on the products landing page,including related products and/or parts of a collection,as well as various fulfillment options.We believe our focus on improving search capabilities,site functionality,category presentation,p

95、roduct content,speed to checkout,and enhanced fulfillment options has yielded higher traffic,better conversion and continued sales growth.Further,we do not view the interconnected shopping experience as a specific transaction;rather,we believe it encompasses an entire journey from inspiration and kn

96、ow-how,to purchase and fulfillment,to post-purchase care and support.Customers expect more personalized messaging,so we are continuing to focus on connecting marketing activities with the online and in-store experiences to create seamless engagement across channels.From the inspirational point of th

97、e purchase journey to providing product know-how,we continue to invest in the infrastructure and capabilities needed to deliver the most relevant marketing messages to our customers based upon what is important to them today.Store ExperienceOur stores remain the hub of our business,and we continue t

98、o invest to improve the customer shopping experience through easier navigation and increased convenience and speed of checkout.In fiscal 2022,we continued to leverage the investments made in our stores over the past several years to operate effectively and meet changing customer expectations.These i

99、nvestments include wayfinding signage and store refresh packages;self-service lockers,online order storage areas at front entrances and curbside pickup to provide convenient pickup options for online orders;electronic shelf label capabilities;and the re-design of front-end areas,including reconfigur

100、ed service desks,improved layouts in checkout areas,and expanded and enhanced self-checkout options.To improve the customers experience in our stores,we have also empowered our customers with additional self-help tools,including mobile app-enabled store navigation.Our app provides store-specific map

101、s,which allow customers to pinpoint the exact location of an item on their mobile devices.We believe these investments are driving higher customer satisfaction scores,and we will continue to invest to improve the customer experience going forward.Investing in Associate Productivity.We continually st

102、rive to improve our store operations for our associates.Our goal is to remove complexity and inefficient processes from the stores to allow our associates to focus on our customers.To this end,we have continued to focus our efforts in such areas as optimizing product flow to decrease the amount of t

103、ime a store associate spends locating product and to improve on-shelf product availability;creating a Table of ContentsFiscal 2022 Form 10-K4simpler order management system;expanding in-aisle,real-time mobile learning tools for our associates own development and to assist with customer questions;and

104、 using labor model tools to better align associate activity with customer needs.For several years,our associates have used web-enabled handheld devices to help them more efficiently meet the needs of the business and serve customers.In fiscal 2022,we began rolling out the next generation of digital

105、phones to our stores,which we call“hdPhones,”so that each associate will have a digital device during their shift.The new devices offer enhanced functionality to allow associates to readily query inventory,access applications that support customer service,and drive on-shelf availability of product.I

106、nvesting in Safety.We are committed to maintaining a safe shopping and working environment for our customers and associates.We empower trained EH&S associates to evaluate,develop,implement and enforce policies,processes and programs on a Company-wide basis.Our EH&S policies are woven into our everyd

107、ay operations and are part of The Home Depot culture.Common program elements include daily store inspection checklists(by department);routine follow-up audits from our store-based safety team members and regional,district and store operations field teams;equipment enhancements and preventative maint

108、enance programs to promote physical safety;departmental merchandising safety standards;training and education programs for all associates,with varying degrees of training provided based on an associates role and responsibilities;and awareness,communication and recognition programs designed to drive

109、operational awareness and an understanding of EH&S matters.OUR SUPPLY CHAINWe continue to focus on building best-in-class competitive advantages in our supply chain to be responsive to our customers expectations for how,when and where they choose to receive our products and services.As part of enhan

110、cing the interconnected shopping experience,we continue to invest in expanding our supply chain network,with the goal of achieving the fastest,most efficient and most reliable delivery capabilities in home improvement.Our efforts are focused on ensuring product availability and increasing the speed

111、and reliability of delivery for our customers while managing our costs.Our supply chain investments have helped us to operate effectively and meet our customers needs throughout the challenging environment over the past few years.We centrally forecast and replenish the vast majority of our store pro

112、ducts through sophisticated inventory management systems and utilize our network of distribution centers to serve both our stores and customers needs.Our supply chain includes multiple distribution center platforms in the U.S.,Canada,and Mexico tailored to meet the needs of our stores and customers

113、based on types of products,location,transportation,and delivery requirements.These platforms include rapid deployment centers,stocking distribution centers,bulk distribution centers,and direct fulfillment centers,among others.As part of the expansion of our supply chain,we have invested to further a

114、utomate and mechanize our rapid deployment center network to drive efficiency and faster movement of product.We are also continuing to expand our fulfillment network,investing in a significant number of new fulfillment facilities to drive speed and reliability of delivery for our customers and to he

115、lp us ultimately meet our goal of reaching 90%of the U.S.population with same or next day delivery for extended home improvement product offerings,including big and bulky products.These facilities include omni-channel fulfillment centers,which deliver product directly to customers,and market deliver

116、y operations,which function as local hubs to consolidate freight for dispatch to customers for the final mile of delivery,with a focus on appliances.In fiscal 2022,we realized our goal to control more of our appliance delivery end-to-end and began managing all of our appliance delivery volume throug

117、h our market delivery operations.We have also added flatbed distribution centers,which handle large items like lumber and building materials that are transported on flatbed trucks.As of the end of fiscal 2022,we have opened a number of additional fulfillment facilities,and we will continue to build

118、out our fulfillment network to support our business.Our network is designed to create a competitive advantage with unique,industry-leading capabilities for home improvement needs for both Pros and consumers.In addition to our distribution and fulfillment centers,we leverage our stores as a network o

119、f convenient customer pickup,return,and delivery fulfillment locations.Our premium real estate footprint provides a distinct structural and competitive advantage.For customers who shop online and wish to pick up or return merchandise at,or have merchandise delivered from,our stores,we have implement

120、ed 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 at the front entrance of many of our stores.We also offer express car and van delivery service that covers over 80%of the U.S.po

121、pulation.For fiscal 2022,approximately 50%of our U.S.online orders were fulfilled through a store.We also continue to focus on developing new capabilities to improve both efficiency and customer experience in our store delivery program.Our strategic intent is to have a portfolio of efficient,timely

122、and reliable sources and methods of delivery to choose from,optimizing order fulfillment and delivery based on customer needs,inventory locations and available transportation options.Table of ContentsFiscal 2022 Form 10-K5CORPORATE RESPONSIBILITY AND HUMAN CAPITAL MANAGEMENTWe view environmental,soc

123、ial and governance matters through the lens of our business,with an understanding that if we support our associates,our customers,our supplier partners,and the communities we serve,we also support our business and create long-term value for our shareholders.As a result,we believe that ESG is fundame

124、ntally embedded in our operations and culture.We organize our efforts around three pillars:(1)Focus on Our People,(2)Operate Sustainably,and(3)Strengthen Our Communities.Highlights of each of these pillars are set forth below.For further information on our three pillars and other ESG-related matters

125、,see our annual ESG Report,available on our 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 navigate challenging market conditions.Our associates are essential to providing the experience

126、 and service that our customers demand.To preserve and protect that customer experience,we focus on cultivating a compelling associate experience,which we believe supports our ability to attract and retain our associates.This includes investing in competitive wages and benefits while also providing

127、the culture,tools,training and development opportunities that make working at The Home Depot an enjoyable and rewarding experience.These actions are the foundation of our key tenets of putting customers first and taking care of our associates.Culture and Values.The Home Depot has a strong commitment

128、 to ethics and integrity,and we are a values-and culture-centric business.Our commitment to our core values drives our approach to human capital management.Our culture is based on our servant leadership philosophy represented by the inverted pyramid,which puts primary importance on our customers and

129、 our associates by positioning them at the top,with senior management at the base in a support role.We bring our culture to life through our core values,which serve as the foundation of our business and as the guiding principles behind the decisions we make every day.Our values also guide our effort

130、s to create an environment that will help us attract and retain skilled associates in the competitive marketplace for talent.We empower our associates to deliver a superior customer experience by living our values,and we position our associates to embody our core values by integrating the importance

131、 of our culture into ongoing development programs,performance management practices,and rewards programs.Leaders participate in programs designed to build and strengthen our culture,such as training on leadership skills,cross-functional collaboration,inclusiveness,and associate engagement,and all ass

132、ociates receive annual training on unconscious bias.Our core values are at the root of our human capital management programs.Our Workforce.At the end of fiscal 2022,we employed approximately 471,600 associates,of whom approximately 46,500 were salaried,with the remainder compensated on an hourly bas

133、is.Set forth below is the geographic makeup of our workforce:Geographic LocationNumber of Associates%of Total WorkforceUnited States418,90088.8%Canada34,5007.3%Mexico17,9003.8%Other(1)3000.1%Total471,600100%(1)Includes associates in our sourcing organization located in China,Vietnam,India,Italy,Pola

134、nd and Turkey.Table of ContentsFiscal 2022 Form 10-K6Talent Attraction and Development.As we attract and hire new associates,we strive to create a customer-like experience for jobseekers as they progress through the steps of our recruiting process by focusing on speed and personalization.We employ t

135、argeted marketing practices through our careers website,which personalizes the users experience based on jobseeker location and searching behavior.Jobseekers can also apply for roles from anywhere using desktop or mobile devices.Once a jobseeker has applied for a role and has been selected to move f

136、orward in the recruiting process,we provide self-service by allowing candidates to schedule or reschedule pre-hire activities directly from their mobile device.Lastly,we created a quick hiring process for candidates by leveraging job-matching automation that matches candidates to jobs that fit their

137、 needs.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,mobile learning,and addi

138、tional online resources.We invest in ongoing growth and development by integrating our culture and values into our performance management practices,providing coaching through continuous leader support,and empowering our associates to learn new skills at their own pace through mobile applications our

139、 associates can access at any time.We equip our leaders with the tools they need to develop themselves and their teams through several programs designed to help them lead inclusively,empower their teams,and serve as mentors for our associates.In fiscal 2022,we supported both associate development an

140、d engagement by starting the year with a new store leadership structure.We created new management positions in our stores focused on the customer service experience,increasing the number of managers on the floor at any given time.This new structure frees up time for other store leaders to devote to

141、associate training and development.The result is an improved customer and associate experience,while also providing new career paths for associates.Associate Engagement.Associate engagement is the emotional commitment associates have to The Home Depot.It is vital to our culture and to our success.We

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

143、ders.In addition,our annual Voice of the Associate survey,which includes all associates,serves as our primary means of gauging associates level of engagement within their roles.We use the feedback from these surveys to help improve the overall associate experience.We also maintain a digital associat

144、e engagement platform that links associates with common interests and fuels connections to co-workers and Company leaders.Additionally,we have a number of programs to recognize stores and individual associates for exceptional customer service and demonstrating our core values.Diversity,Equity and In

145、clusion.Guided by our core values and grounded in our culture,we believe that having a diverse,equitable and inclusive Company is key to our success.We are focused on building a workplace and retail space that reflect the customers and communities we are proud to serve.We strive to maintain a Compan

146、y where our associates are valued and respected and feel a sense of belonging in the workplace,so that they can provide the customer experience that supports our business.Our Office of Diversity,Equity and Inclusion supports our focus on associate diversity,supplier diversity,and engagement with our

147、 communities.Below is the fiscal 2022 diversity data for our U.S.associates:Associate PopulationRace/EthnicityGender%Minority%White%Undisclosed%Female%Male%UndisclosedU.S.Workforce48%50%2%38%62%1%U.S.Managers&Above(1)39%60%1%35%65%0%U.S.Officers26%73%2%29%69%2%(1)Does not include officers.Note:Certa

148、in percentages may not sum to totals due to rounding.As a Company,we have identified several priorities designed to guide our efforts to enhance diversity,equity and inclusion.We believe these associate-,supplier-and community-focused priorities will further enhance our customers experience and make

149、 a sustainable difference within the workplace,marketplace,and community:Associate EngagementIncrease diverse representation throughout our organizationCreate an environment where every associate feels included and valued for who they arePromote equal opportunity in recruitment,hiring,training,devel

150、opment and advancementTable of ContentsFiscal 2022 Form 10-K7Supplier DiversityIncrease use of and spend with diverse suppliersDevelop diverse suppliers by providing mentorship and sharing resourcesCommunity EngagementPartner with organizations on programs designed to close the wealth gapSupport pro

151、grams that advance education for allCompensation and Benefits.Consistent with our core values,we take care of our people by offering competitive compensation and comprehensive benefits programs.We continuously make wage investments to ensure our compensation packages reflect the evolving circumstanc

152、es across our markets,and our profit-sharing program for hourly associates provides semi-annual cash awards for performance against our business plan.We transitioned from the enhanced pay and benefits we provided for our associates in fiscal 2020 to alleviate some of the challenges presented by the

153、COVID-19 pandemic to permanent compensation enhancements for our frontline,hourly associates,which we have continued to make since fiscal 2020.Our associates can take advantage of a range of benefits,including healthcare and wellness programs,vacation and leave of absence benefits including parental

154、 leave and paid sick/personal time off,a 401(k)match,our ESPPs,personal finance education and advisory services,assistance programs to help with managing personal and work-life challenges,family support programs,and educational assistance.Operate SustainablyWe have a long-standing and substantial co

155、mmitment to sustainable business operations,understanding that if we make our operations more efficient and sustainable,we can support both our business and the environment.This philosophy extends from the products and services we offer to our customers;to our store construction,maintenance and oper

156、ations;to our supply chain and packaging initiatives;to our ethical sourcing program.As we strive to operate sustainably,we have focused on efforts that help protect the climate,reduce our environmental impact,and source products responsibly,and we have set goals to drive progress in these areas.Our

157、 2022 ESG Report,available on our website at https:/ more information on our goals,as well as specific initiatives we have in place to help achieve these goals.Below are highlights of our sustainability strategy.Our Environmental Goals.We currently have several goals to help address climate impact a

158、nd reduce our environmental footprint:Year AnnouncedGoalGoal DateStatus2018Cleaning Products Chemical Reduction:Eliminate certain added chemicals from residential household cleaning products sold in-store or online by the end of fiscal 20222022Complete(1)2018Science-Based Carbon Emissions Targets:Re

159、duce Scope 1 and 2 carbon emissions by 2.1%per year,with the goal to achieve a 40%reduction by the end of fiscal 2030 and a 50%reduction by the end of fiscal 20352030;2035In Process2019Recyclable Packaging:Exclude expanded polystyrene foam(EPS)and polyvinyl chloride(PVC)film from the packaging of pr

160、ivate-brand products we sell,replacing them with easier-to-recycle materials by the end of fiscal 20232023In Process2020Renewable/Alternative Energy Sources:Produce or procure,on an annual basis,335 megawatts of renewable or alternative energy by the end of fiscal 20252025In Process2021100%Renewable

161、 Electricity:Produce or procure renewable electricity equivalent to the needs for all Home Depot facilities worldwide by the end of fiscal 20302030In Process(1)A de minimis number of suppliers are still in the process of reformulating and transitioning their product assortment.These goals follow the

162、 completion of a number of previously announced goals,including goals related to reducing store electricity use,eliminating certain chemicals from products we sell,and helping customers reduce their greenhouse gas emissions and water use and save on electricity costs.Table of ContentsFiscal 2022 For

163、m 10-K8Our Environmental Programs and Initiatives.In order to progress against our goals,we have a number of environmentally-focused programs and initiatives,including:Store Operations and Renewable/Alternative Energy.We have reduced store energy consumption through initiatives such as LED lighting

164、upgrades;installation of energy-efficient HVAC systems;participation in demand mitigation;on-site alternative or renewable energy projects such as fuel cells and solar panels;and contracts with off-site wind and solar power providers.We have continued to work toward our goal to produce or procure re

165、newable electricity equivalent to the electricity needs for all Home Depot facilities by the end of fiscal 2030.We have also continued our focus on saving water,implementing smart irrigation systems capable of reducing irrigation-related water use in more than 500 U.S.stores.Product Offerings.Throug

166、h our Eco ActionsTM program,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 ENERGY STAR certified appliances;WaterSense-labeled bath faucets,sh

167、owerheads,aerators,toilets,and 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 and reduce their environmental impact.Through Eco Actions,we also provide customers with resourc

168、es,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 compact fluorescent light bulbs,rechargeable batteries,and lead acid batteries.Chemical Strateg

169、y.We are committed to increasing our assortment of products that meet high environmental standards,and we encourage our suppliers to invest in developing environmentally-innovative products.We periodically evaluate our Chemical Strategy to ensure our approach and goals are appropriate.Sustainable Pa

170、ckaging.In addition to our goal related to eliminating EPS and PVC from our private-brand products,we are continually working with our suppliers to find ways to make product packaging more recyclable or simply use less materials,such as through the reduction of single-use plastics.Supply Chain Optim

171、ization.Through our supply chain initiatives such as space sharing and optimization technology,we are working to maximize our use of every mile to make our supply chain more efficient.We also utilize hydrogen fuel cell technology in a number of our forklifts to make our supply chain even more enviro

172、nmentally responsible.CDP Participation.We are a long-standing participant in the annual CDP Climate Change reporting process.CDP is an independent,international,not-for-profit organization providing a global system for companies and cities to measure,disclose,manage,and share environmental informat

173、ion.In February 2023,we received a score of“B”from CDP.We have also announced that we plan to begin participating in CDPs Forests reporting process.Assessment of SBTi Goals.In fiscal 2021,we announced plans to adopt,by the end of fiscal 2023,new Science Based Targets Initiative(SBTi)goals to reduce

174、Scope 1,2 and 3 emissions in line with Paris Agreement goals.Adoption of SBTi goals would build on our current science-based goals to reduce Scope 1 and 2 carbon emissions by 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.In fiscal 2022,

175、we continued to work on evaluating potential SBTi goals.Over the past several years,our commitment to sustainable operations has resulted in a number of environmental awards and recognitions.In 2022,we received the following awards:an EPA WaterSense Partner of the Year Award for our commitment to of

176、fering and promoting water-efficient products;an EPA SmartWay High Performer Award,which recognized us as an industry leader in improving freight efficiency and environmental performance;an EPA Safer Choice Partner of the Year Award,which recognizes achievement in products with safer chemicals that

177、furthers innovative 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 focuses on improving

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

179、d help them find careers in the home improvement industry through our Path to Pro program,which includes a new career networking site to connect skilled tradespeople to industry Pros.Our Team Depot associate volunteers also extend Table of ContentsFiscal 2022 Form 10-K9the mission of the Home Depot

180、Foundation in communities across the country,donating thousands of volunteer hours each year on a wide variety of projects.We partner with diverse suppliers and organizations to further support our diversity,equity and inclusion efforts.As noted above,our Office of Diversity,Equity and Inclusion par

181、tners with community organizations on programs designed to close the wealth gap and enhance education outcomes across underserved and underrepresented communities.To further advance diversity,equity and inclusion in our communities,we have a supplier diversity program through which we provide suppli

182、er development and other resources to our diverse suppliers,and in fiscal 2021 we launched a Tier II supplier diversity program that aims to drive more spending from our direct suppliers to diverse suppliers.In fiscal 2022,the Company joined the Billion Dollar Roundtable Inc.,or BDR,a not-for-profit

183、 organization that promotes supplier diversity excellence and best practices.The BDR consists of U.S.-based corporations that spend$1.0 billion or more annually with minority-and woman-owned suppliers.We are working to cultivate a supplier base that creates long-lasting growth and mutual business su

184、ccess,while reflecting the diversity of our customers and strengthening the communities in which our customers and associates live.Please see our 2022 ESG Report for additional information about our efforts to support the communities we serve.GOVERNMENT REGULATIONAs a company with both U.S.and inter

185、national operations,we are subject to the laws of the U.S.and foreign jurisdictions in which we operate and the rules and regulations of various governing bodies,which may differ among jurisdictions.Compliance with these laws,rules and regulations has not had,and is not expected to have,a material e

186、ffect on our capital expenditures,results of operations,or competitive position as compared to prior periods.AVAILABLE INFORMATIONOur internet website is .We make available on the Investor Relations section of our website,free of charge,our Annual Reports to shareholders,Annual Reports on Form 10-K,

187、Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,Proxy Statements,and Forms 3,4 and 5,and amendments to those reports,as soon as reasonably practicable after filing such documents with,or furnishing such documents to,the SEC.We include website addresses throughout this report for reference

188、 only.The information contained on these websites is not incorporated by reference into this report.Item 1A.Risk Factors.Our business,results of operations,and financial condition are subject to numerous risks and uncertainties.In connection with any investment decision with respect to our securitie

189、s,you should carefully consider the following risk factors,as well as the other information contained in this report and our other filings with the SEC.Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.Should any

190、 of these risks materialize,our business,results of operations,financial condition and future prospects could be negatively impacted,which in turn could affect the trading value of our securities.You should read these Risk Factors in conjunction with Part II,Item 7.Managements Discussion and Analysi

191、s of Financial Condition and Results of Operations and our consolidated financial statements and related notes in Item 8.STRATEGIC RISKSStrong competition could adversely affect prices and demand for our products and services and could decrease our market share.Our industry is highly competitive,hig

192、hly fragmented,and evolving.As a result,we face competition for customers for our products and services from a variety of retailers,suppliers,service providers,and distributors and manufacturers that sell products directly to their respective customer bases.These competitors range from traditional b

193、rick-and-mortar,to multichannel,to exclusively online,and they include a number of other home improvement retailers;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 sto

194、res,local,regional and national hardware stores,paint stores,specialty and mass digital retailers,warehouse clubs,independent building supply stores,MRO distributors,home dcor retailers,and other retailers,as well as with providers of home improvement services and tool and equipment rental.The inter

195、net facilitates competitive entry,price transparency,and comparison shopping,increasing the level of competition we face.We compete primarily based on customer experience,price,quality,product availability and assortment,and delivery options,both in-store and online.We also compete based on store lo

196、cation and appearance,presentation of merchandise,and ease of shopping experience.Our Pros also look for a dedicated sales team,competitive credit Table of ContentsFiscal 2022 Form 10-K10and pricing options,project planning tools,and product depth and job lot quantities,particularly for their planne

197、d purchase needs.Furthermore,customers are increasingly shopping online and seeking faster and/or guaranteed delivery times,low-price or free shipping,and/or convenient pickup options.Our ability to be competitive on delivery and pickup times,options and costs depends on many factors,including lever

198、aging the momentum of our strategic investments in our supply chain and our interconnected retail capabilities to further enhance the customer shopping experience.Failure to successfully manage these factors and offer competitive delivery and pickup options could negatively impact our profit margins

199、 and the demand for our products.We use our marketing,advertising and promotional programs to drive customer traffic and compete more effectively,and we must regularly assess and adjust our efforts to address changes in the competitive landscape.Intense competitive pressures from one or more of our

200、competitors,such as through aggressive promotional pricing or liquidation events,or our inability to adapt effectively and quickly to a changing competitive landscape,could adversely affect our prices,our margins,or demand for our products and services.If we are unable to timely and appropriately re

201、spond to these competitive pressures,including through the delivery of a superior interconnected customer experience or through maintenance of effective sales and marketing,advertising or promotional programs leveraging both our digital and physical platforms,our market share and our financial perfo

202、rmance could be adversely affected.In addition,we are operating in a highly inflationary environment.If inflation increases beyond our ability to control our related costs,we may not be able to adjust prices to sufficiently offset the effect of the various cost increases without negatively impacting

203、 consumer demand,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 our relationship with our customers,the demand for our products and services,and our market share.

204、The success of our business depends in part on our ability to identify and respond promptly to evolving trends in demographics;shifts in consumer preferences,expectations and needs;and unexpected weather conditions,public health issues(including pandemics and related impacts),natural disasters,or ch

205、anges in the macroeconomic environment that impact our customers,while also managing appropriate inventory levels in our stores and distribution or fulfillment centers and maintaining an excellent customer experience.It is difficult to successfully predict the products and services our customers wil

206、l demand.As our customers expect a more personalized experience,our ability to collect,use and protect relevant customer data is important to our ability to effectively meet their expectations.Our ability to collect and use that data,however,is subject to a number of external factors,including the i

207、mpact of legislation or regulations governing data privacy and security and customer expectations around data collection and use.In addition,each of our primary customer groups has different needs and expectations,many of which evolve as the demographics in a particular customer group change.Custome

208、r preferences and expectations related to sustainability of products and operations are also changing.If we do not successfully differentiate the shopping experience to meet the individual needs and expectations of or within a customer group,we may lose market share with respect to those customers.C

209、ustomer 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 and prices,read product reviews,de

210、termine real-time product availability,and purchase products,and new channels and tools to expand the customer experience appear and change rapidly.Our Pros also look for additional capabilities,including a dedicated sales team,competitive credit and pricing options,project planning tools,and produc

211、t depth and job lot quantities,particularly for their planned purchase needs.Once products are purchased,customers seek alternate options for delivery of those products,including advance ordering through digital platforms for Pros,and they often expect quick,timely,and low-price or free delivery and

212、/or convenient pickup options.We must continually anticipate and adapt to these changes in the shopping and purchasing process by continuing to adjust and enhance the online and in-store customer experience as well as our delivery options.The coordinated operation of our network of physical stores,d

213、istribution facilities,and online platforms is fundamental to the success of our interconnected strategy.We cannot guarantee that our current or future fulfillment options will be maintained and implemented successfully or that we will be able to meet customer expectations on delivery or pickup time

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

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

216、Table of ContentsFiscal 2022 Form 10-K11Failure to provide a relevant or effective online customer experience in a timely manner that keeps pace with technological developments and dynamic customer expectations;to maintain appropriate inventory;to provide quick and low-price or free delivery alterna

217、tives and convenient pickup options;to differentiate the customer experience for our primary customer groups;to effectively implement an increasingly localized merchandising assortment;or to otherwise timely identify or respond to changing consumer preferences,expectations and home improvement needs

218、 could adversely affect our relationship 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 negatively impact our relationships with our customers,c

219、urrent and potential 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.We must con

220、tinue to manage and protect our brand and reputation.Negative incidents can erode trust and confidence quickly,and adverse publicity about 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,engag

221、e,motivate and retain associates;attract regulatory scrutiny;and impact our relationships with current and potential suppliers and vendors.Further,our actual or perceived position or lack of position on social,environmental,governance,political,public policy,economic,geopolitical,or other sensitive

222、issues,and any perceived lack of transparency about those matters,could harm our reputation with certain groups.Customers are also increasingly using social media to provide feedback and information about our Company,including our products and services,in a manner that can be quickly and broadly dis

223、seminated.Negative sentiment about the Company shared over social media,or misinformation 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 expand our supply chain and enhance the interconnected

224、 shopping experience could disrupt our operations in the near term,and these initiatives might not provide the anticipated benefits or might fail.We continue to invest in our interconnected retail strategy,including by making significant investments to expand our supply chain.These investments are d

225、esigned to streamline our operations to allow our associates to continue to provide high-quality service to our customers;simplify customer interactions;provide our customers with a more interconnected shopping experience;better address Pro planned purchase needs;and create the fastest,most efficien

226、t delivery network for home improvement products.Failure to choose the right investments and implement them in the right manner and at the right pace could disrupt our operations.Executing our interconnected retail strategy requires continual investment in our operations and information technology s

227、ystems,as well as the development and execution of new processes,systems and support.Building out our supply chain also involves significant real estate projects as we expand our distribution network,requiring us to identify and secure available locations with appropriate characteristics needed to s

228、upport the different types of facilities.If we are unable to effectively manage the volume,timing,nature,location,and cost of these investments,projects and changes,our business operations and financial results could be materially and adversely affected.The cost and potential problems,defects of des

229、ign,and interruptions associated with the implementation of these initiatives,including those associated with managing third-party service providers,employing new online tools and services,implementing new technologies,implementing and restructuring support systems and processes,securing appropriate

230、 facility locations,and addressing impacts on inventory levels,could disrupt or reduce the efficiency of our operations in the near term,lead to product availability issues,and impact our profitability.In addition,our stores are a key element of our interconnected retail strategy,serving as the hub

231、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 customers desire.We also need to identify and secure available locations with appropriate characteristic

232、s for new stores to ensure we can continue to serve our customers effectively.Our investments in our stores may not deliver the relevant shopping experience our customers expect or fully support an interconnected shopping experience.We must also maintain a safe store environment for our customers an

233、d associates,as well as protect against loss or theft of our inventory(also called“shrink”),including as a result of organized retail crime.High rates of shrink,which we continue to experience,or an unsafe store environment,requires operational changes that may increase costs and adversely impact th

234、e customer and associate experience.Our investments to enhance our interconnected shopping experience and expand our supply chain might not provide the anticipated benefits,might take longer than expected to complete or realize anticipated benefits,or Table of ContentsFiscal 2022 Form 10-K12might fa

235、il altogether,each of which could adversely impact our competitive position and our financial condition,results of operations,or cash flows.If we are unable to effectively manage and expand our alliances and relationships with certain suppliers of both brand name and proprietary products,we may be u

236、nable to effectively execute our strategy to differentiate ourselves from our competitors.As part of our focus on product differentiation,we have formed strategic alliances and exclusive relationships with certain suppliers to market products under a variety of well-recognized brand names.We have al

237、so developed relationships with certain suppliers to allow us to market proprietary products that are comparable to national brands.Our proprietary products differentiate us from other retailers and generally carry higher margins than national brand products.If we are unable to manage and expand the

238、se alliances and relationships,maintain favorable terms with current suppliers,or identify alternative sources for comparable brand name and proprietary products,we may not be able to effectively execute product differentiation,which may impact our sales and gross margin results.Our strategic transa

239、ctions involve risks,which could have an adverse impact on our business,financial condition and results of operations,and we may not realize the anticipated benefits of these transactions.We regularly consider and enter into strategic transactions,including mergers,acquisitions,investments,alliances

240、,and other growth and market expansion strategies.We generally expect that these transactions will result in sales increases,cost savings,synergies,enhanced capabilities or various other benefits.Assessing the viability and realizing the benefits of these transactions is subject to significant uncer

241、tainty.For each of our acquisitions,we need to determine the appropriate level of integration of the target companys products,services,associates,and information technology,financial,human resources,compliance,and other systems and processes,and then successfully manage that integration into our cor

242、porate structure.Integration can be a complex and time-consuming process,and if the integration is not fully successful or is delayed for a material period of time,we may not achieve the anticipated synergies or benefits of the acquisition.In addition,the integration of businesses may create complex

243、ity in our financial systems,internal controls,technology and cybersecurity systems,and operations and may make them more difficult to manage.Even if the target companies are successfully integrated,the acquisitions may fail to further our business strategy as anticipated,expose us to increased comp

244、etition or challenges with respect to our products or services,and expose us to additional risks and liabilities.Strategic transactions may also be subject to significant regulatory uncertainty.The changing enforcement landscape may result in additional costs or delays that affect the anticipated ou

245、tcome of a transaction.Any failure in the execution of a strategic transaction or investment,our approach to the integration of an acquired asset or business,or achievement of synergies or other benefits could result in slower growth,higher than expected costs,the recording of an impairment of goodw

246、ill or other intangible assets,and other actions which could adversely 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 service and to suppor

247、t our strategic initiatives while also controlling 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 our customers,we must attract,develop and retain a large number of highly qualified associates and

248、maintain a productive relationship with those associates.Our ability to meet our labor needs while controlling labor costs is subject to numerous external factors,including increased market pressures with respect to prevailing wage rates,unemployment levels,and health and other insurance costs;the i

249、mpact of legislation or regulations governing labor relations,employment,immigration,minimum wage,and healthcare benefits;changing demographics and expectations among the workforce;public health concerns;and our reputation within the labor market.We also compete with other retail businesses for many

250、 of our associates in hourly positions,and we invest significant resources in training and motivating them to maintain a high level of job satisfaction.These positions often have high turnover rates,which can lead to increased training and retention costs,particularly in a competitive labor market.W

251、e have faced and may continue to face additional challenges in recruiting and retaining associates due to wage pressure;flexible scheduling needs;disruption in the availability of childcare;challenges related to a remote or hybrid working environment for associates who work in our store support cent

252、ers;and health and safety concerns.We are also subject to labor union efforts to organize groups of our associates from time to time and,if successful,those organizational efforts may decrease our operational flexibility and efficiency,and/or otherwise negatively impact our operations or reputation.

253、These factors,together with growing competition among potential employers,have resulted in and may continue to result in increased salaries,benefits,or other employee-related Table of ContentsFiscal 2022 Form 10-K13costs,and/or may impair our ability to recruit and retain associates,which could have

254、 an adverse impact on our business operations,financial condition and results of operations.In addition,to execute our interconnected retail strategy,including our supply chain investments,we must attract and retain a large number of skilled professionals,including technology professionals,to implem

255、ent our ongoing technology and other investments.The market for these professionals is very competitive.An inability to provide wages and/or benefits,including remote or hybrid work flexibility,that are competitive within the markets in which we operate could adversely affect our ability to retain a

256、nd attract associates.Further,changes in market compensation rates may adversely affect our labor costs.Additionally,our ability to successfully execute organizational changes,including management transitions within the Companys senior leadership,and to effectively motivate and retain associates is

257、critical to our business success.If we are unable to locate,attract or retain qualified associates,or manage leadership 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

258、 performance may be adversely affected.A failure of a key information technology system or process could adversely affect our business.We rely extensively on information technology systems and related personnel to collect,process,retain,manage,transmit,and protect transactions and data.Some of these

259、 systems are managed or provided by third-party service providers,including certain cloud platform providers.In managing our business,we also rely heavily on the integrity of,security of,and consistent access to,operational and financial data for information such as sales,customer data,supplier data

260、,associate data,job applicant data,partner data,demand forecasting,merchandise 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 effec

261、tively,we or our service providers must maintain and update them.Delays in the maintenance,updates,upgrading,or patching of these systems,applications or processes could impair,and on occasion have impaired,their effectiveness or could expose us to security risks.Our systems and the third-party syst

262、ems with which we interact are subject to and on occasion have experienced damage or interruption from a number of causes,including power and other critical infrastructure outages;computer and telecommunications failures;computer viruses;data or security breaches;internal or external data theft or m

263、isuse;cyber-attacks,including the use of malicious codes,worms,phishing,smishing,vishing,spyware,denial of service attacks,and ransomware;responsive containment measures by us that may involve voluntarily taking systems offline;natural disasters and catastrophic events such as fires,floods,earthquak

264、es,tornadoes,hurricanes,or other extreme weather events;public health concerns,such as pandemics and quarantines;military conflicts,acts of war,terrorism or civil unrest;other systems outages;inadequate or ineffective redundancy;and design or usage errors or malfeasance by our associates,contractors

265、 or third-party service providers.In addition,as more 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 failure of internal or external information technology infrastru

266、cture as well as increased cybersecurity 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 of compromise of the integrity,security and consistent operations o

267、f these systems,such efforts are not always successful.As a result,we or our service providers could experience errors,interruptions,delays or cessations of service in key portions of our information technology infrastructure,which could significantly disrupt our operations or impair data security;i

268、mpact our ability to operate or access communications,financial or banking systems;be costly,time-consuming and resource-intensive to remedy;and adversely impact our reputation and relationship with our customers,suppliers,shareholders or regulators.In addition,we are currently making,and expect to

269、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 investments involve replacing existing systems,some of which are older,legacy systems t

270、hat 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 the migration of applications to the cloud;maintaining or enhancing legacy systems that are not currently bei

271、ng replaced;or designing or cost-effectively acquiring new systems with new functionality.These efforts can result in significant potential risks,including failure of the systems to operate as designed,potential loss or corruption of data,failures in security processes and internal controls,cost ove

272、rruns,implementation delays or errors,disruption of operations,and the potential inability to meet business and reporting requirements.Any system implementation and transition difficulty may result in operational challenges,security failures,reputational harm,and increased costs that could adversely

273、 affect our business operations and results of operations.Table of ContentsFiscal 2022 Form 10-K14Disruptions in our customer-facing technology systems could impair our interconnected retail strategy and give rise to negative customer experiences.Through our information technology systems,we are abl

274、e to provide an improved overall shopping and interconnected experience that empowers our customers to shop and interact with us from a variety of electronic devices and digital platforms.We use our digital platforms as sales channels for our products and services,as methods of providing inspiration

275、,and as sources of product,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 expan

276、ding,with a significant increase in sales initiated online and via mobile applications.We may not be successful at managing this increased volume and related delivery options without interruption in the future.Additionally,we must effectively respond to new developments and changing customer prefere

277、nces with respect to a digital and interconnected experience.We continually seek to enhance all of our online and digital properties to provide a personalized,user-friendly interface for our customers.Disruptions,delays,failures or other performance issues with our customer-facing technology systems

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

279、ther factors affecting the availability and distribution of our merchandise could adversely impact our business.Disruption within our logistics or supply chain network,such as the industry-wide supply chain challenges resulting from the COVID-19 pandemic,have in the past and may in the future advers

280、ely affect our ability to receive and deliver inventory in a timely manner,impair our ability to meet customer demand for products,and result in lost sales,increased supply chain costs,and/or damage to our reputation.Such disruptions may result from damage or destruction to our distribution or fulfi

281、llment centers or those of our supply chain service providers;weather-related events;cybersecurity incidents or attacks;natural disasters;international trade disputes,trade policy changes or restrictions,or import-or export-related governmental sanctions or restrictions;customs actions,including reg

282、ulatory enforcement inquiries,holds,detentions,and exclusions;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 othe

283、r shortages;third-party contract disputes or inability to maintain favorable contract terms;supply or shipping interruptions or costs;increased costs or unavailability of fuel;military conflicts or acts of war,as well as any related sanctions or other government or private responses;acts of terroris

284、m;public health issues,including pandemics or quarantines(such as the COVID-19 pandemic)and related shut-downs,re-openings,or other actions by government regulators or others;civil unrest;or other factors beyond our control.In recent years,ports in the U.S.and elsewhere have been impacted by capacit

285、y constraints,port congestion and delays,periodic labor disputes,security issues,weather-related events,and natural disasters.Disruptions to our supply chain due to any of the factors listed above could negatively impact our financial performance or financial condition.If our efforts to maintain the

286、 privacy and security of customer,associate,job applicant,business partner,and Company information are not successful,we could incur substantial costs and reputational damage and could become subject to litigation and enforcement actions.Our business,like that of most retailers,involves the collecti

287、on,processing,retention,management,transmission,and deletion of personal information(including identifiers,internet activity,preferences,and payment information)from our customers,associates,job applicants,and business partners,as well as confidential Company information.We also work with third-part

288、y service providers that provide technology,systems and 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 protection and cybersecurity risks.Unauthorized parties have

289、in the past gained access,and will continue to attempt to gain access,to these systems and data through fraud or other means of deceiving our associates or third-party service providers.Hardware,software or applications we develop or obtain from third parties may contain exploitable vulnerabilities,

290、bugs,or defects in design,maintenance or manufacture or other problems that could unexpectedly compromise information security.We have experienced and continue to face the ongoing risk of exploitation of our software providers and our software development and implementation process,including from co

291、ding and process vulnerabilities and the installation of so-called back doors that provide unauthorized access to systems and data.The increased use of a remote workforce has also expanded the possible attack surface areas.In addition,the risk of cyber-attacks has increased in connection with Russia

292、s invasion of Ukraine and the resulting geopolitical conflict.In light of this and other geopolitical events,nation-state actors or their supporters may launch retaliatory cyber-attacks,and may attempt to cause supply chain and other third-party service provider disruptions,or take other geopolitica

293、lly-motivated retaliatory actions that may disrupt our Table of ContentsFiscal 2022 Form 10-K15business operations,result in data compromise,or both.Nation-state actors have in the past carried out,and may in the future carry out,cyber-attacks to achieve their aims and goals,which may include espion

294、age,monetary gain,disruption,and destruction.To achieve their objectives,nation-state actors and other cyber criminals have used and may continue to use numerous attack vectors and methods,including use of stolen passwords,social engineering,phishing,smishing,vishing,identity spoofing,ransomware or

295、other disruptive and destructive malware,supply chain compromises,and man-in-the-middle and denial of service attacks.The methods used to obtain unauthorized access,disable or degrade service,or sabotage systems are constantly changing and evolving,increasing in frequency and sophistication,and may

296、be difficult to anticipate or detect for long periods of time.To protect against unauthorized access to or use of data,prevent data loss,preserve data integrity,and protect our own access to systems,we have implemented and regularly review and update systems,processes,and procedures;third-party asse

297、ssments and testing;and annual associate training and other specific training initiatives.However,the ever-evolving threats mean that we and our third-party service providers and business partners must continually evaluate and adapt our respective systems and processes and overall security environme

298、nt,as well as those of companies we acquire.There is no guarantee that the measures we take will be adequate to safeguard against all threats,including vulnerabilities,data security breaches,system compromises or misuses of data.As we saw in connection with the data breach we experienced in 2014,any

299、 significant compromise or breach of our data security,whether external or internal,or misuse of customer,associate,job applicant,business partner,or Company data,could result in significant costs,including costs to investigate and remediate,as well as lost sales,fines,lawsuits,regulatory investigat

300、ions,and damage to our reputation.Furthermore,because the techniques used to obtain unauthorized access,disable or degrade service,or sabotage systems change frequently and may not immediately produce signs of anomalous activity or compromise,we may be unable to anticipate these techniques or to imp

301、lement adequate preventative measures.Additionally,as occurred in the case of the data breach we experienced in 2014,we or our third-party service providers may not discover any security breach,vulnerability or compromise of information for a significant period of time after the occurrence of a secu

302、rity incident.In addition,data governance failures can adversely affect our reputation and business.Our business depends on our customers,associates,job applicants and business partners willingness to entrust us with their personal information.Events that adversely affect that trust,including inadeq

303、uate disclosure to our customers,associates,job applicants,or business partners of our uses of their information or failing to keep our information technology systems and our customers,associates,job applicants and business partners personal information secure from significant attack,theft,damage,lo

304、ss or unauthorized disclosure or access,whether as a result of our action or inaction(including human error or malfeasance)or that of our service providers or other third parties,could adversely affect our brand and harm our reputation.Further,the regulatory environment related to data privacy and c

305、ybersecurity is constantly changing,with new and increasingly rigorous requirements applicable to our business.The implementation of these requirements has also become more complex.Maintaining our compliance with evolving requirements,including state privacy laws,requires significant effort and cost

306、,requires changes to our business practices,and may limit our ability to collect and use certain data to support the customer experience.In addition,failure to comply with applicable requirements could subject us to fines,sanctions,governmental investigations,lawsuits or reputational damage.Addition

307、ally,our cyber insurance coverage may not be adequate for liabilities or costs actually incurred,and we cannot be certain that insurance will continue to be available to us on economically reasonable terms,or at all,or that any insurer will not deny coverage of a future claim.We are subject to payme

308、nt-related risks that could increase our operating costs,expose us to fraud or theft,subject us to potential liability,and potentially disrupt our business.We accept payments using a variety of methods,including credit and debit cards,our private label credit cards,cash,checks,PayPal,installment loa

309、n programs,trade credit,and gift cards,and we may offer new payment options over time.Acceptance of these payment options subjects us to rules,regulations,contractual obligations and compliance requirements,including payment network rules and operating guidelines,data security standards and certific

310、ation requirements,and rules governing electronic funds transfers.These requirements may change over time or be reinterpreted,making compliance more difficult,costly,or uncertain.For certain payment methods,including credit and debit cards,we pay interchange and other fees,which may increase over ti

311、me and raise our operating costs.We rely on third parties to provide payment processing services,including the processing of credit cards,debit cards,and other forms of electronic payment.If these companies become unable to provide these services to us,or if their systems are compromised,it could po

312、tentially disrupt our business.The payment methods that we offer,and the selling channels in which we operate,also subject us to potential fraud and theft by threat actors,who are becoming increasingly more sophisticated,seeking to obtain unauthorized access to or exploit weaknesses that may exist i

313、n our sales,payments and payment processing systems.If we fail to comply with applicable rules or requirements for the payment methods we accept,or if payment-related data is compromised Table of ContentsFiscal 2022 Form 10-K16due to a breach or misuse of data,we may be liable for costs incurred by

314、payment card issuing banks and other third parties or we may be subject to fines and higher transaction fees,or our ability to accept or facilitate certain types of payments may be impaired.In addition,our customers could lose confidence in certain payment types,which may result in a shift to other

315、payment types or potential changes to our payment systems that may result in higher costs.As a result,our business and operating results could be adversely affected.Our business is subject to seasonal influences,and uncharacteristic or significant weather conditions,climate change,natural disasters,

316、as well as other catastrophic events,could impact our operations.Natural disasters,such as hurricanes,tropical storms,fires,floods,droughts or water scarcity,tornadoes,and earthquakes;unseasonable,unexpected or extreme weather conditions,whether as a result of climate change or otherwise;acts of ter

317、rorism or violence,including active shooter situations;public health concerns,such as pandemics and quarantines and related shut-downs,re-openings,or other actions by government regulators or others;civil unrest;military conflicts or acts of war,as well as any related sanctions or other government o

318、r private responses;or similar disruptions and catastrophic events can affect consumer spending and confidence and consumers disposable income,particularly with respect to home improvement or construction projects,and could have an adverse effect on our financial performance.These types of events ca

319、n also adversely affect our work force and prevent associates and customers from reaching our stores and other facilities.They can also,temporarily or on a long-term basis,disrupt or disable operations of stores,support centers,and portions of our supply chain and distribution network,including caus

320、ing reductions in the availability of inventory and disruption of utility services.In addition,these events may affect our information systems and digital platforms,resulting in disruption to various aspects of our operations,including our ability to transact with customers and fulfill orders;to com

321、municate with our stores,facilities,store support centers or senior management;or to access financial or banking systems.Unseasonable,unexpected or extreme weather conditions such as excessive precipitation,warm temperatures during the winter season,or prolonged or extreme periods of warm or cold te

322、mperatures,could render a portion of our inventory incompatible with customer needs.Furthermore,the long-term impacts of climate change,whether involving physical risks(such as extreme weather conditions)or transition risks(such as regulatory or technology changes)are expected to be widespread and u

323、npredictable.These changes over time could affect,for example,the availability and cost of or demand for certain consumer products,commodities,and energy(including utilities),which in turn may impact our ability to procure certain goods or services for the operation of our business at the quantities

324、 and levels we consider optimal.As a consequence of these or other catastrophic or uncharacteristic events,we may experience interruption to our operations,increased costs,or losses of property,equipment or inventory,which would adversely affect our revenue and profitability.If we fail to identify a

325、nd develop relationships with a sufficient number of qualified suppliers,or if our suppliers experience financial difficulties or other challenges,our ability to timely and efficiently access products that meet our high standards for quality could be adversely affected.We buy our products from suppl

326、iers located around the world,who in turn procure materials from across the globe.Our ability to continue to identify and develop relationships with qualified suppliers who can satisfy our high standards for quality and responsible sourcing,as well as our need to access products in a timely and effi

327、cient manner,is a significant challenge.Our ability to access products from our suppliers can be adversely affected by economic or political instability;civil unrest;military conflicts or acts of war,as well as any related sanctions or other government or private responses;acts of terrorism or viole

328、nce;public health issues(including pandemics and related impacts);the financial instability of suppliers;suppliers noncompliance with applicable laws;contract disputes or inability to maintain favorable contract terms;trade restrictions;tariffs;currency exchange rates;disruptions in our suppliers lo

329、gistics or supply chain networks or information technology systems;inability to sell certain products due to customs actions,including regulatory enforcement inquiries,holds,detentions,and exclusions;raw material or other shortages;and other factors beyond our or our suppliers control.If we are unab

330、le to access products to meet our customers demands and expectations in a timely and efficient manner,our sales and gross margin results may be adversely impacted.Failure to achieve and maintain a high level of product and service quality and safety and ensure compliance with responsible sourcing la

331、ws and standards could damage our reputation with customers,expose us to litigation or enforcement actions,and negatively impact our sales and results of operations.Product and service quality issues could negatively impact customer confidence in our brands and our Company.If our product and service

332、 offerings do not meet applicable product standards or our customers expectations regarding safety or quality,we could experience lost sales and increased costs and be exposed to legal,financial Table of ContentsFiscal 2022 Form 10-K17and reputational risks,as well as governmental enforcement action

333、s.Actual,potential or perceived product safety concerns,including health-related concerns,could expose us to litigation or government enforcement actions,and could result in costly product recalls and other liabilities.We may not be successful in obtaining adequate contractual indemnification and insurance coverage from our suppliers and service providers,which may result in claims having an adver