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Non-Tech : Home Depot (HD)

HD 362.30

-1.6%

Nov 14 9:30 AM EST

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To: John Carson who wrote (128)	3/31/1998 10:09:00 PM
From: Carter Patterson	of 1169

This sounds absolutely wonderful. Nonetheless, I cannot understand how overall GP% can increase so much if they increase imports to 10% from 3% and even if they make double the margin on the imports by becoming a direct importer ? This is really confusing to me. Here goes: At present, assume: Domestic 97% x 28% = 27% Imports 3% x 28% = 1% Combined = 28% Future, assume: Domestic 90% x 28% = 25% Imports 10% x 56% = 6% Combined = 31% The weighting between domestic and imports cannot give them such an overall lift, unless GP on imported goods was in the many 100%s . Rather unlikely. I have naturally had to make some assumptions. An overall 3% GP lift is nothing to sneeze at, but far removed from another 10%-15%. I wonder if the 10%-15% is multiplied by 28% rather than added to 28% ? Could the analyst be confused.

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