The Home Depot

Ben Gilbert (0:00)

I'm sorry, I got tripped up. You used power tools, David Rosenthal?

David Rosenthal (0:05)

I built this whole door. I got the blank door from Home Depot. I had to cut it down to size to fit a non-standard size door opening in my studio. I drilled the door handle. I put the door knob on myself. It all worked great.

Ben Gilbert (0:18)

We got to get you to the Pro Desk.

David Rosenthal (0:20)

Yeah. And it's been part of every Acquired episode since.

Ben Gilbert (0:24)

All right, let's do this.

Welcome to the fall 2026 season of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

David Rosenthal (0:51)

I'm David Rosenthal.

Ben Gilbert (0:52)

And we are your hosts.

Home Depot is an astonishingly large company. Before I started this research, I thought of it as a big store at the middle of a bunch of shopping centers, but not really like an important company to the world. But I was wrong. And the stats are large, David.

David Rosenthal (1:13)

Large.

Ben Gilbert (1:15)

It is the world's largest specialty retailer. The only retailers larger are general, not in a specific vertical like home improvement. I would think Walmart or Amazon or Costco, those are bigger. But the other vertical ones are not.

In fact, Home Depot is the 45th most valuable publicly traded company in the world, period, with a $350 billion market cap. So that's more valuable than Netflix or Alibaba or Goldman Sachs or LVMH.

David Rosenthal (1:47)

Or Disney that we just covered.

Ben Gilbert (1:49)

Yes.

David Rosenthal (1:50)

Which is wild because unlike all of those other companies, Home Depot is only in North America.

Ben Gilbert (1:56)

Yes. Home improvement is just a massive category, way, way bigger than I realized. So here's a fun stat. Home Depot went public in 1981, one year after Apple Computer. And astonishingly, if you put $1,000 into Home Depot and Apple and their IPOs, and you held them all today, your investment in Home Depot would beat your investment in Apple. And if you reinvested the dividends that it paid out, it has compounded at nearly 25 percent per year for 45 years.

I mean, imagine if your stock portfolio did that.

David Rosenthal (2:33)

Yeah. Home Depot is an all-timer. I kind of can't believe we haven't done this episode yet.

Ben Gilbert (2:37)

Right?

That makes it the number one performing stock in the S&P 500 in total investment return from the day that it went public to today. So that $1,000 invested in the IPO would be worth about $17 million today.

David Rosenthal (2:54)

Not bad. Well, we're going to get into as we go who holds that equity, because it's actually a critical part of the company strategy, or at least it was.

Ben Gilbert (3:04)

Yeah. Listeners, if you're trying to contextualize, well, 45 years is a long time. How does that 17 million stack up? Ben and David love their index funds. We love Vanguard here. If you had bought the S&P 500 with that same $1,000, instead of $17 million today, you would have $170,000.

Today, we will tell the story of how it happened. It is an unlikely story of two guys who got unceremoniously fired from their old jobs with little savings and no retirement funds, who then had a revolutionary idea to build a home improvement store in giant warehouses five times more square footage than any other hardware store at the time, which seemed risky at best, unthinkable, maybe. We'll try to answer the question, how and why did that idea become so large? Of course, it's bigger than Lowe's, but also IKEA, Trader Joe's. It's bigger than nearly all dedicated grocery store chains. Today, they employ an astonishing 470,000 people.

That's more than any big tech company in the US, except for Amazon, more than any bank in the world, more than almost every car company, hotel chain, more employees than any restaurant chain also, including Starbucks. So listeners, this is the story of Home Depot.

David Rosenthal (4:26)

Ooh, let's go.

Ben Gilbert (4:27)

So for all of you who have been asking for visuals to go with our episodes, you are in luck. We are making our companion PDF a regular thing now. So you can click the link in the show notes or go to library.acquired.fm to get access to all the charts and tables and illustrations from key concepts in this episode. You can join the email list at acquired.fm slash email. That's where we'll send out all the behind the scenes photos of research and past episode corrections and vote on future episode topics. That is acquired.fm slash email. Join the Slack, come discuss it with David and I at acquired.fm slash Slack. And before we dive in, we want to thank our brand new presenting partner, Sierra.