Home Depot, Inc.

Core operations · Quality control and product defects

Failure to achieve and maintain a high level of product and service quality and safety and ensure compliance with responsible sourcing laws and standards could damage our reputation with customers, expose us to litigation or enforcement actions, and negatively impact our sales and results of operations. If our product and service offerings, including those of our suppliers, do not meet applicable product standards or our customers' expectations regarding safety, quality, security, or responsible business practices, we could experience lost sales and increased costs.

Supply chain and procurement · Supplier operation and dependance

Disruptions in our supply chain and other factors affecting the availability and distribution of our merchandise could adversely impact our business, financial results, and reputation. Disruptions within our logistics or supply chain network, such as the industry-wide supply chain challenges that resulted from the COVID-19 pandemic, have adversely affected and may in the future adversely affect, our ability to receive and deliver inventory in a timely manner.

Core operations · Operational disruption and business continuity

Failure to maintain a safe and secure shopping and working environment may adversely impact sales, costs, the customer and associate experience, and our brand and reputation. Our customers and associates expect a safe and secure environment in which to shop and work, and maintaining that environment helps protect against inventory losses (also called 'shrink'), including due to theft.

Reputation and brand · Corporate social responsibility

In addition, we could be criticized for the scope or nature of initiatives or goals related to these matters, or for any revisions to or failure to achieve these goals on a timely basis or at all. If data, processes, and reporting related to these matters are incomplete or inaccurate, we could face regulatory scrutiny or investigations, litigation and/or adverse reputational impacts.

Reputation and brand · Brand damage and negative publicity

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, associates and jobseekers, suppliers, service providers, vendors, shareholders, regulators, and the communities we serve, and, consequently, our business, results of operations and the price of our stock.

Legal and litigation · Litigation and legal proceedings

We are involved from time to time in a number of legal, regulatory and governmental enforcement proceedings. While we cannot predict the outcomes of those proceedings and other contingencies with certainty, certain of them could adversely affect our operations and reputation and/or increase our costs. We are involved in a number of legal proceedings and regulatory matters, including government inquiries and investigations, and consumer, employment, tort and other litigation that arise from time to time in the ordinary course of business.

Tax and financial reporting · Financial reporting and accounting standards

Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition. GAAP and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, such as asset impairment, inventories, lease obligations, self-insurance, vendor allowances, tax matters, business combinations, and litigation, are complex and involve many subjective assumptions, estimates and judgments.

Industry regulation · Regulatory compliance and changes

Our costs of doing business could increase as a result of changes in, expanded enforcement of, or adoption of new federal, state, local or international laws, regulations and executive orders. We are subject to various U.S. federal, state and local laws and regulations, as well as international laws and regulations, that govern numerous aspects of our business.

Market and investment · Interest rate and yield curve risk

Other factors beyond our control – including unemployment and foreclosure rates; inventory loss due to theft (including as a result of organized retail crime); inflation or deflation; interest rate fluctuations, including central banks' actions to control inflation; tariff and trade policy; fuel and other energy costs; raw material or other shortages; labor and healthcare costs; the availability of financing; the state of the credit markets, including mortgages, home equity loans and consumer credit.

International and currency · International operations and emerging markets

If we cannot successfully manage the challenges presented by operating in international markets, we may not be successful in our international operations and our sales and profitability may be negatively impacted. Our ability to successfully operate in, and source products and materials from, international markets is affected by many of the same risks we face in our U.S. operations, as well as other costs and difficulties specific to managing international operations.

Cybersecurity and data protection · Insider threats and access controls

Unauthorized parties, including criminal threat actors, nation-states, or insiders (including associates or contractors engaged in fraudulent or malicious activities), have in the past gained access, and will continue to attempt to gain access, to these systems and data through technical vulnerabilities, breach of security policies, fraud or other means of deceiving or coercing our associates, contractors or third-party service providers.

Technology infrastructure · Technology systems and infrastructure failure

A failure of one or more key elements of our technology infrastructure, including associated systems or processes, could adversely affect our business, financial results, and reputation. We rely extensively on our technology infrastructure, including associated information technology systems, applications, processes, and related personnel to operate our day-to-day business.

Digital transformation and innovation · Technology implementation and upgrades

The execution of initiatives to deliver our interconnected experience could adversely impact our business operations or financial results, and these initiatives might not provide the anticipated benefits. Executing our interconnected experience requires continual investment in our operations and information technology systems, as well as the development and execution of new processes, systems and support.

Cybersecurity and data protection · Data breaches and cyber attacks

Our technology infrastructure and the third-party systems with which we interact, as well as any systems those third parties utilize, are subject to, and on occasion have experienced, damage, interruption, or malicious activity from a number of causes, including cyber-attacks, including the use of malicious codes, worms, phishing, smishing, vishing, spyware, denial of service attacks, and ransomware.

Cybersecurity and data protection · Third party data security and vendors

Some of these systems are managed or provided by third-party service providers, including certain cloud platform providers. Although we and our third-party service providers seek to maintain our respective technology infrastructure and related systems and processes effectively and to successfully address the risk of compromise of their integrity, security and consistent operations of these systems, such efforts are not always successful.

Economic and market conditions · Consumer spending and confidence

These types of events can affect consumer spending and confidence and consumers' disposable income, particularly with respect to home improvement or construction projects. They can also adversely affect our work force and prevent associates and customers from reaching our stores, branches and other facilities.

Natural and catastrophic events · Natural disasters and extreme weather

Natural disasters, such as hurricanes, tropical storms, fires, floods, droughts or water scarcity, tornadoes, and earthquakes; unseasonable, unexpected or extreme weather conditions; acts of terrorism or violence, including active shooter situations; public health concerns, such as pandemics and quarantines and related impacts; civil unrest; geopolitical tensions or conflicts, or military conflicts or acts of war, as well as any related sanctions or other government or private responses; or similar disruptions and catastrophic events could have and on occasion have had an adverse effect on our operations and financial performance.

Social and demographic · Stakeholder activism and pressure

Our actual or perceived position or lack of position on social, environmental, governance, political, public policy, regulatory, economic, geopolitical, or other sensitive issues, and any perceived lack of transparency about those matters, could harm our reputation with certain groups and attract regulatory scrutiny, investigations, litigation, or boycotts.

Geopolitical and trade · International conflicts and tensions

In light of the conflicts in Europe, the Middle East and South America and other geopolitical events, nation-state actors or their supporters and other politically-motivated actors may launch retaliatory cyber-attacks, and may attempt to cause supply chain and other third-party service provider disruptions, or take other geopolitically-motivated retaliatory actions that may disrupt our business operations, result in data compromise, or both.

Customer and revenue · Changing customer preferences and behavior

We may not timely identify or effectively respond to customer needs, expectations or trends, which could adversely affect our relationship with our customers, the demand for our products and services, and our market share. The success of our business depends on our ability to identify and respond promptly to evolving trends in demographics and shifts in customer preferences, expectations and needs.