Sizable market position, with roughly 2x the sales of its nearest competitor; Strong liquidity; and Healthy cash flow generation. Slowdown of home improvement spending and exposure to the U.S. housing market, which is likely to remain weak over the next one to two years; Increased debt-financed share repurchase activity prior to scale-back due to unfavorable market conditions; and Intense competition with Lowe's Cos. Inc. The ratings on Home Depot Inc. reflect the company's sizable position in the still-fragmented home improvement industry, intermediate financial profile, and considerable cash flow generation. Expectations that the housing market will remain challenging over the next few years partially offset these advantages. Home Depot, which pioneered the full-service, warehouse-style format in the 1970s, has retail operations
