FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 1, 1998

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-8207

THE HOME DEPOT, INC.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

IRS No. 95-3261426
(I.R.S. Employer Identification No.)

2455 Paces Ferry Road, Atlanta, Georgia
(Address of principal executive offices)

30339-4024
(Zip Code)

Registrant's telephone number, including area code: (770) 433-8211

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------

Common Stock, $.05 Par Value New York Stock Exchange
3-1/4% Convertible Subordinated Notes New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

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), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the Common Stock of the Registrant held by
nonaffiliates of the Registrant on March 30, 1998, was $45,507,418,306. The
aggregate market value was computed by reference to the closing price of the
stock on the New York Stock Exchange on such date. For the purposes of this
response, executive officers and directors are deemed to be the affiliates of
the Registrant and the holdings by nonaffiliates was computed at 688,202,923
shares.

The number of shares outstanding of the Registrant's Common Stock as of March
30, 1998 was 733,454,687 shares.

DOCUMENTS INCORPORATED BY REFERENCE

The Registrant's Proxy Statement for its Annual Meeting of Stockholders, to be
held May 27, 1998, which has been filed pursuant to Regulation 14A within 120
days of the close of Registrant's fiscal year, is incorporated by reference in
answer to Part III of this report but only to the extent indicated herein. In
addition, pages 15 through 31 and the inside cover page of The Home Depot,
Inc.'s 1997 Annual Report to Stockholders is incorporated by reference in answer
to Items 6, 7 and 8 of Part II and Item 14(a) of Part IV of this report.

PART I

Item 1. BUSINESS

General

The Home Depot, Inc. including its subsidiaries ("Home Depot" or
"Company") is the leading retailer in the home improvement industry and ranks
among the 10 largest retailers in the United States based on net sales volume.
At fiscal year end, the Company was operating 624 stores, including 587 Home
Depot stores and 5 EXPO(R) Design Center stores in the United States and 32 Home
Depot stores in Canada. The aggregate total square footage of selling space was
approximately 66,361,000 at year end.

Home Depot stores sell a wide assortment of building materials and home
improvement and lawn and garden products and average approximately 106,300
square feet of enclosed space per store, with an additional 16,000 to 28,000
square feet in the outside garden center area. Home Depot's operating strategy
for its Home Depot stores is to offer a broad assortment of high quality
merchandise at competitive prices utilizing highly knowledgeable,
service-oriented personnel and aggressive advertising. The Company regularly
checks competitors' prices to ensure that Home Depot's low "Day-In, Day-Out"
warehouse prices are competitive within each market.

Since a large portion of the Company's customers are individual
homeowners, many of whom may have limited experience in do-it-yourself ("D-I-Y")
projects, management considers its associates' knowledge of products and home
improvement techniques and applications to be very important to its marketing
approach and its ability to maintain customer satisfaction. Many D-I-Y customers
take advantage of "how-to" classes taught by associates and vendors in Home
Depot stores.

Another segment of the Company's business activity is the
buy-it-yourself ("B-I-Y") customer. The B-I-Y customer chooses products, makes
the purchase and contracts with others to complete or install the project. For
these customers, Home Depot offers installation services for a variety of
products through third-party providers. Home Depot also devotes significant
marketing, advertising and service efforts toward attracting professional
remodelers and commercial users.

The Company's EXPO Design Centers range from 81,000 to 145,000 square
feet of selling space and provide products and services primarily related to
design and renovation projects. The Company also offers, via direct mail
facilities, maintenance and repair products through Maintenance Warehouse and
wallpaper and custom window treatments through National Blind & Wallpaper
Factory, both wholly-owned subsidiaries of The Home Depot, Inc. The Company's

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Store Support Center (corporate office) is located at 2455 Paces Ferry Road,
Atlanta, Georgia 30339-4024, telephone number (770) 433-8211.

Products

A typical Home Depot store stocks approximately 40,000 to 50,000
product items, including variations in color and size. Each Home Depot store
carries a wide selection of high quality and nationally advertised brand name
merchandise. The table below shows the percentage of sales of each major product
group for each of the last three fiscal years. These percentages may not
necessarily be representative, however, of future product mix due to, among
other things, the effects of promotional activities associated with opening
additional Home Depot stores, changes in selling seasons due to unusual or
delayed weather patterns and ongoing merchandising product line reviews
conducted by management. Also, newly opened stores did not operate through a
complete seasonal product cycle for all periods presented:

Percentage of Sales for
Fiscal Year Ended
-----------------
Jan. 28, Feb. 2, Feb. 1,
1996 1997 1998
---- ---- ----

Product Group
-------------
Building materials, lumber, floor and wall coverings...... 33.9% 34.0% 34.2%
Plumbing, heating, lighting and electrical supplies....... 27.7 27.4 27.1
Seasonal and specialty items.............................. 14.8 14.7 14.8
Hardware and tools........................................ 13.2 13.4 13.5
Paint and other........................................... 10.4 10.5 10.4
----- ----- -----
100.0% 100.0% 100.0%
===== ===== =====

The Company sources its store merchandise from approximately 5,700
vendors worldwide, of which no single vendor accounts for as much as five
percent of total purchases. The Company is not dependent on any single vendor. A
substantial majority of merchandise is purchased directly from manufacturers,
thereby eliminating costs of intermediaries. Management believes that
competitive sources of supply are readily available for substantially all
products the Company purchases for resale.

Store Growth

At fiscal year end, Home Depot had stores in 41 states and four
Canadian provinces, with approximately 50 percent of the U.S. stores being
concentrated in California, Florida, Texas, Georgia, New York, New Jersey and
Illinois. Although new Home Depot store openings for fiscal 1997 occurred
primarily in existing markets, the Company continued its geographic expansion by
opening stores in a number of new markets, including Prescott, Arizona; Pueblo,
Colorado; Rockford, Illinois; Evansville, Indiana; Portland, Maine; Traverse
City, Michigan; Kansas City, Missouri; Syracuse, New York; Akron, Canton,
Cleveland, Toledo and Youngstown, Ohio; Beaumont and Lubbock, Texas; Williston,
Vermont and Spokane, Washington. In addition, Home Depot stores were opened in
two new Canadian markets: Winnipeg, Manitoba and Ottawa, Ontario.

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From the end of fiscal 1992 to the end of fiscal 1997, the Company
increased its store count by an average of approximately 24 percent per year
(from 214 to 624 stores) and increased the total store square footage by an
average of approximately 26 percent per year (from 20,897,000 to 66,361,000
total square feet). Home Depot expects to continue to increase its store count
in both existing and selected new markets on a basis consistent with its current
policy of not exceeding a maximum growth rate of new stores of approximately 22
percent per year. During fiscal 1997, the Company opened 112 new stores and
relocated 5 existing Home Depot stores. During fiscal 1998, the Company
anticipates opening approximately 137 new stores. New Home Depot stores average
approximately 108,000 square feet with an additional 16,000 to 28,000 square
feet of outside selling and storage area.

Marketing, Sales & Distribution

Management believes a number of the Company's existing Home Depot
stores are operating at or above their optimum capacity. To enhance long-term
market penetration, the Company has a strategy of opening new stores near the
edge of the market areas served by existing stores. While such a strategy may
initially have a negative impact on comparable store-for-store sales, the
Company believes this "cannibalization" strategy increases customer satisfaction
and overall market share by reducing delays in shopping, increasing utilization
by existing customers and attracting new customers to more convenient locations.
In an effort to more effectively respond to the demographics of certain markets,
the Company has expanded its service hours to 24 hours a day in 15 store
locations.

Home Depot continued to introduce or refine a number of merchandising
programs during fiscal 1997. Key among them is the Company's ongoing commitment
to becoming the supplier of choice to a variety of professional customers,
including remodelers, carpenters, plumbers, electricians, building maintenance
professionals and designers. The Company has reacted to the needs of this group
by enhancing and increasing quantities of key products for professional
customers. In addition, the Company is testing additional product and
service-related programs designed to increase sales to professional customers,
including expanded commercial credit programs, delivery services and incremental
dedicated staff.

The Company's installed sales program is available, with varying
services offered, in all of the Company's stores. There are approximately 3,500
installed sales vendors who, as independent, licensed contractors, are
authorized by the Company to provide services to customers. This program targets
the B-I-Y customer, who will purchase a product but either does not have the
desire or ability to install the product.

In fiscal 1998, the Company has opened one new EXPO Design Center store
in Davie, Florida and plans to open an additional store in South Florida during
the year. Unlike traditional Home Depot stores, EXPO Design Centers do not sell
building materials and lumber, but focus instead on upscale interior design
products and installation services. The Miami EXPO format (the "Miami Format"),
from which future EXPO stores will be modeled with certain modifications, is
different from the format of previous EXPO stores located in San Diego,
California; Atlanta, Georgia; Long Island, New York and Dallas, Texas. When
compared to the other EXPO stores, which average approximately 131,400 square
feet of selling space, the Miami Format for EXPO is nearly 40 percent smaller in
size, currently averaging approximately 83,500 square feet per store. In
addition, the Miami Format is more

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project-oriented than the previous format. This format focuses on projects
related to kitchen, bath, lighting, window, soft flooring and hard flooring. The
only "cash and carry" items a customer can purchase at this store are items
principally relating to such kinds of projects.

Construction on the Company's new Import Distribution Center ("IDC")
located in Savannah, Georgia was completed in fiscal 1997. Built with the
intention of servicing the Company's stores located east of the Rocky Mountains,
the IDC began shipments in April 1997 and by the end of fiscal 1997 was
servicing all targeted stores. The 1.4 million square foot facility is staffed
with approximately 600 associates. The IDC enables the Company to directly
import products not currently available to customers or offer products currently
sourced domestically from third party importers. Other benefits include quicker
turnaround deliveries to stores, lower costs and improved quality control than
would be possible if the products were purchased through third party importers.

In fiscal 1997, the Company continued its marketing effort to support
its sponsorship of the 1998 U.S. Olympic Team and Canadian Olympic Team's
participation at the Winter Games. The Company will maintain its relationship
with the U.S. Olympic Committee and the Canadian Olympic Committee for at least
the next six years for the Olympic Games to be held in 2000, 2002 and 2004.

The Company sponsored the "1997 National Home and Garden Show Series."
Bringing together 16 of the nation's most successful consumer shows under one
national sponsorship provided maximum exposure and support to the shows. Through
this sponsorship, the Company played a key role in bringing attention to the
most innovative lawn and garden, interior design and home improvement products
and services to the general public.

Homer TLC, Inc., an indirect wholly-owned subsidiary of The Home Depot,
Inc., owns the trademarks "The Home Depot," and "EXPO," as well as the "Homer"
advertising symbol and various private label brand names utilized by the
Company. The Company's operating subsidiaries license from Homer TLC, Inc. the
right to use this intellectual property. The Company believes its rights in this
intellectual property are an important asset of the Company.

Other Operations

In March 1997, the Company acquired Maintenance Warehouse/America Corp.
("Maintenance Warehouse"). Maintenance Warehouse is the leading direct mail
marketer of maintenance, repair and operations products serving the multi-family
housing and lodging facilities management market. At fiscal year end,
Maintenance Warehouse employed approximately 500 associates. The Company
believes that the acquisition of Maintenance Warehouse will provide the Company
with an opportunity to increase its penetration of the professional customer
market.

In November 1997, the Company acquired the assets of privately-held
Deekay Enterprises, Inc., owner of Detroit-based National Blind & Wallpaper
Factory, a telephone mail order service for wallpaper and custom window
treatments, and Habitat Wallpaper & Blinds, operator of 13 retail stores located
in Illinois, Missouri and Ohio. The companies, now known as National Blinds &
Wallpaper, Inc. and Habitat Stores, Inc., respectively, are wholly-owned
subsidiaries of The Home Depot, Inc. At fiscal year end, National Blinds and
Wallpaper, Inc. and Habitat Stores, Inc. employed approximately 280 and 150
associates, respectively. Management believes the

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acquisition of these companies will enhance the Company's customer service
levels and competitive presence in wallpaper and custom window treatment
products.

In December 1997, the Company acquired the Load 'N Go(TM) program. This
program offers rentals, at low hourly rates, of standard and specially-fitted
pickup trucks and cargo vans for customers who choose not to wait for normal
delivery schedules or who are unable to transport their purchases in their own
vehicles. The program provides an alternative to customers from the regular
delivery services offered by the Company. By the end of fiscal 1997, Load 'N Go
was available in approximately 300 stores.

International Operations

The Company's Canadian Home Depot stores are owned by a partnership,
operating under the name The Home Depot Canada, between the Company and Molson
Companies, Limited ("Molson"). The Company's controlling share of the
partnership is seventy-five percent (75%). At any time after February 28, 2000,
the Company has the option to purchase, or Molson has the option to cause the
Company to purchase, the remaining twenty-five percent (25%) of The Home Depot
Canada. The option price is based on the lesser of fair market value or a value
determined by an agreed upon formula as of the option exercise date.

The first Home Depot store located in Latin America is scheduled to
open in Santiago, Chile in July 1998. Chile was chosen primarily because of its
stable economy and government, growing middle class population and developed
D-I-Y market. To facilitate entry into the market, the Company signed a joint
venture agreement with S.A.C.I. Falabella, a leading department store retailer
in Chile. The Company's controlling share of the venture is 66.67 percent. The
Company believes its alliance with Falabella enhances the Company's presence in
the Chilean market by offering attractive real estate opportunities and
providing assistance with, among other things, systems, credit marketing and
distribution logistics. The Company has offices in Santiago, Chile from which
the day-to-day management of the operation is handled by a key management team
comprised of both Chilean nationals and seasoned Home Depot managers.

The Company also plans to open two stores in San Juan, Puerto Rico in
fiscal 1998.

Information Systems

Each store is equipped with a computerized point of sale system,
electronic bar code scanning system and a UNIX Server. Management believes these
systems provide efficient customer check-out (with an approximate 90 percent
rate of scannable products), store-based inventory management, rapid order
replenishment, labor planning support and item movement information. Faster
registers as well as a new check approval system and a new receipt format have
expedited transactions. To better serve the increasing number of customers
applying for credit, the charge card approval process time has been reduced to
less than 30 seconds. Store information is communicated to the Store Support
Center's computers via a land-based frame relay network. These computers provide
corporate, financial, merchandising and other back office function support.

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The Company is continuously assessing and upgrading its information
systems to support its growth, reduce and control costs and enable better
decision-making. The Company continues to realize greater efficiency as a result
of its electronic data interchange ("EDI") program. Currently, most of the
Company's highest volume vendors are participating in the EDI program. A
paperless system, EDI electronically processes orders from buying offices to
vendors, alerts the stores when the merchandise is to arrive and transmits
invoice data from the vendors and motor carriers to the Store Support Center. In
addition, during fiscal 1997 the Company continued to develop new computer
systems to facilitate and improve product order replenishment in Home Depot
stores.

Associate Development

As of fiscal year end, Home Depot employed approximately 125,000
associates, of whom approximately 7,900 were salaried with the remainder
compensated on an hourly basis. Approximately 76 percent of the Company's
associates are employed on a full-time basis. To attract and retain qualified
personnel, the Company seeks to maintain salary and wage levels above those of
its competitors in its market areas. The Company's policy is to hire and train
additional personnel in anticipation of future store expansion.

The Company has never experienced a strike or any work stoppage, and
management believes that its employee relations are satisfactory. There are no
collective bargaining agreements covering any of the Company's associates.

In fiscal 1997, the Company enhanced its training programs and began
implementing other employment practices in its continuing effort to service the
needs of its associates. Among the initiatives that will be implemented over the
next two years are programs designed to increase associates' knowledge of
merchandising departments and products and to educate, develop and test the
skills of those associates who are interested in being promoted. In keeping with
the Company's "pay-for-performance" philosophy, store managers will have access
to geographic information regarding competitive salary rates in their respective
markets. The Company operates its own television network and produces training
and informational programs that are transmitted to stores via the satellite
communications network and by videotape.

Competition

The business of the Company is highly competitive, based in part on
price, store location, customer service and depth of merchandise. In each of the
markets served by the Company, there are a number of other chains of building
supply houses, lumber yards and home improvement stores. In addition, the
Company must compete, with respect to some of its products, with discount
stores, local, regional and national hardware stores, mail order firms,
warehouse clubs, independent building supply stores and, to a lesser extent,
other retailers.

Due to the variety of competition faced by the Company, management is
unable to precisely measure the Company's market share in its existing market
areas. Management, however, believes that the Company is an effective and
significant competitor in its markets, and that its market share, currently
defined as including the Do-It-Yourself/Buy-It-Yourself, Tradesmen,
Builders/General Contractors, Heavy Industrial, Repair & Remodeling and Property
Maintenance markets, is approximately 7%, based on U.S. Census data estimates,
internal estimates and data provided by the Home Improvement Research Institute.

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Executive Officers

The following provides information as of April 16, 1998 concerning the
executive officers holding positions in the Company and/or its subsidiaries.

BERNARD MARCUS, age 68, is a co-founder of Home Depot and serves as
Chairman of the Board. From inception of the Company in 1978 until 1997, he
served as Chairman of the Board and Chief Executive Officer ("CEO"), at which
time the title of CEO was passed on to Mr. Arthur M. Blank. Mr. Marcus serves as
a director on the Boards of National Service Industries, Inc., the New York
Stock Exchange, Inc., Westfield Corporation, Inc. and DBT Online, Inc. He also
serves on the boards of the National Foundation for the Centers for Disease
Control and Prevention and The Marcus Center, Inc., which provides support
services for persons with developmental disabilities and their families. In
addition, he is a member of the Advisory Board and the Board of Directors of the
Shepherd Center in Atlanta, Georgia and is a Vice President and member of the
Board of The City of Hope, in Duarte, California.

ARTHUR M. BLANK, age 55, has been the President, Chief Operating
Officer and a director of Home Depot since its inception in 1978 and was named
CEO in 1997. He is, together with Mr. Bernard Marcus and Mr. Kenneth G. Langone,
a co-founder of the Company. Mr. Blank is a member of the Board of Trustees of
North Carolina Outward Bound School, Emory University and the Carter Center,
Inc.; the Board of Councilors of the Carter Center of Emory University and
serves as a member of the Board of Directors of Cox Enterprises, Inc. and Post
Properties, Inc.

RONALD M. BRILL, age 54, has been Executive Vice President and Chief
Administrative Officer of the Company since 1995. Mr. Brill joined Home Depot
as Controller in 1978, was elected Treasurer in 1980, Vice President-Finance in
1981, Senior Vice President and Chief Financial Officer ("CFO") in 1984,
Executive Vice President and CFO in 1993 and was elected as a director in 1987.
Mr. Brill serves on the Board of Trustees of the Atlanta Jewish Community
Center and Woodruff Arts Center, the Board of Directors of the High Museum of
Art and Pilchuck Glass School and the Governing Board of Woodward Academy.

MARK R. BAKER, age 40, has been President of the Midwest Division since
December 1997. Mr. Baker first joined the Company in 1996 as Vice
President-Merchandising for the Midwest Division. Prior to joining Home Depot,
from 1992 until 1996, Mr. Baker was an Executive Vice President for HomeBase in
Fullerton, California.

BRUCE W. BERG, age 49, has been President-Southeast Division since
1991. Mr. Berg joined the Company in 1984 as Vice President-Merchandising (East
Coast) and was promoted to Senior Vice President (East Coast) in 1988.

MARSHALL L. DAY, age 54, has been Senior Vice President-Chief Financial
Officer since 1995. Mr. Day previously served as Senior Vice President-Finance
from 1993 until his promotion to his current position.

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BILL HAMLIN, age 45, was recently named Group President and continues
to serve as Executive Vice President-Merchandising. Prior to being named
Executive Vice President-Merchandising, Mr. Hamlin served as President-Western
Division from 1990 until 1994.

VERNON JOSLYN, age 46, has been President-Northeast Division since
1996. Mr. Joslyn previously served as Vice President-Operations for the
Northeast Division from 1993 until his promotion to his current position.

W. ANDREW McKENNA, age 52, was named Senior Vice President-Strategic
Business Development in December 1997. Mr. McKenna joined Home Depot as Senior
Vice President-Corporate Information Systems in 1990. In 1994 he was named
President of the Midwest Division and served in that capacity until he assumed
the duties of his current position.

LYNN MARTINEAU, age 41, has been President-Western Division since 1996.
Mr. Martineau most recently served as Vice President-Merchandising for the
Company's Southeast Division from 1989 until his promotion to his current
position.

LARRY M. MERCER, age 51, was recently named Group President and has
been Executive Vice President-Operations since 1996. Mr. Mercer previously
served as President-Northeast Division from 1991 until his promotion to his
current position.

BARRY L. SILVERMAN, age 39, has been President of the Southwest
Division since July 1997. Mr. Silverman previously served as Vice
President-Merchandising of the Northeast Division from 1991 until his promotion
to his current position.

BRYANT W. SCOTT, age 42, has been President of the EXPO Design Center
Division since 1995. Since 1980, Mr. Scott has served in a variety of
positions, including Vice President-Merchandising for the Southeast Division.

DAVID SULITEANU, age 45, was named Group-President-Diversified
Businesses in April 1998. Mr. Suliteanu previously served as Vice Chairman and
Director of Stores for Macy's East, a position he held from 1993 until he joined
Home Depot in April 1998.

ANNETTE M. VERSCHUREN, age 41, has been President of The Home Depot
Canada since 1996. In 1992, Ms. Verschuren formed Verschuren Ventures Inc. and
remained there until joining Michaels of Canada Inc. in 1993 where she served as
President until joining the Company.

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Item 2. PROPERTIES

The following table indicates the number of the Company's Home Depot
store locations by state in the United States and by province in Canada as of
February 1, 1998.

Number of Stores
State in State
-------------------------------------

Alabama 6
Arizona 18
Arkansas 2
California 97
Colorado 10
Connecticut 13
Delaware 1
Florida 64
Georgia 33
Idaho 1
Illinois 25
Indiana 2
Iowa 1
Kansas 1
Kentucky 3
Louisiana 9
Maine 2
Maryland 14
Massachusetts 17
Michigan 22
Minnesota 10
Mississippi 4
Missouri 7
Nevada 5
New Hampshire 4
New Jersey 25
New Mexico 3
New York 33
North Carolina 18
Ohio 4
Oklahoma 6
Oregon 7
Pennsylvania 20
Rhode Island 1
South Carolina 7
Tennessee 17
Texas 55
Utah 4
Vermont 1
Virginia 7
Washington 13
---
Subtotal 592

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Number of Stores
Canadian Provinces in Province
-------------------------------------

Alberta 4
British Columbia 8
Manitoba 1
Ontario 19
---
Subtotal 32

TOTAL STORES 624
===

Of the Company's 624 stores at February 1, 1998, approximately 74
percent were owned (including those owned subject to a ground lease) consisting
of approximately 48,235,000 square feet and approximately 26 percent were leased
consisting of approximately 18,126,000 square feet. In recent years, the
relative percentage of new stores which are owned has increased. Although the
Company takes advantage of lease financing opportunities, the Company generally
prefers to own stores because of greater operating control and flexibility,
generally lower occupancy costs and certain other economic advantages of owned
stores. See "Management's Discussion and Analysis of Results of Operations and
Financial Condition - Liquidity and Capital Resources."

The Company's executive, corporate staff and accounting offices occupy
approximately 1,310,000 square feet of leased and owned space in Atlanta,
Georgia. The Company acquired additional land in Atlanta, Georgia and has
constructed office facilities that are currently occupied by the majority of the
store support staff located in Atlanta. Approximately 140,000 square feet of
leased space previously occupied by this staff is being subleased. In addition,
the Company occupies an aggregate of 921,000 square feet, of which 171,000
square feet is owned and 750,000 square feet is leased, for divisional store
support centers and subsidiary customer support centers located in Fullerton and
San Diego, California; Tampa, Florida; Atlanta, Georgia; Schaumburg, Illinois;
Southfield, Michigan; South Plainfield, New Jersey; Dallas, Texas; Tukwila,
Washington; Scarborough, Ontario, Canada and Santiago, Chile.

The Company utilizes approximately 5,604,000 square feet of warehousing
and distribution space of which 711,000 is owned and 4,893,000 is leased.

Management believes that at the end of existing lease terms, space
currently leased by the Company can be either relet or replaced by alternate
space for lease or purchase that is readily available.

Item 3. LEGAL PROCEEDINGS

The Company has litigation arising from the normal course of business.
In management's opinion, this litigation will not materially affect the
Company's consolidated financial position or the results of operations.

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Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year ended February 1, 1998.

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Since April 19, 1984, the Common Stock of the Company has been listed
on the New York Stock Exchange under the symbol "HD." The table below sets forth
the low and high sales prices of the Common Stock on the New York Stock Exchange
Composite Tape as reported in The Wall Street Journal and the quarterly cash
dividends declared per share of Common Stock during the periods indicated.

Price Range* Cash
------------ Dividends
Low High Declared*
--- ---- ---------

Fiscal Year 1996
First Quarter ended April 28, 1996 $28.33 $33.58 $.03
Second Quarter ended July 28, 1996 30.67 38.08 .04
Third Quarter ended October 27, 1996 33.50 39.67 .04
Fourth Quarter ended February 2, 1997 31.83 38.17 .04

Fiscal Year 1997
First Quarter ended May 4, 1997 $33.00 $39.08 $.04
Second Quarter ended August 3, 1997 38.25 50.00 .05
Third Quarter ended November 2, 1997 47.06 56.63 .05
Fourth Quarter ended February 1, 1998 52.94 61.63 .05

Fiscal Year 1998
First Quarter (through April 16, 1998) $61.25 $72.69 $.05

- ---------------------
* On July 3, 1997, the Company effected a three-for-two stock split in the
form of a stock dividend with respect to the shares of Common Stock issued and
outstanding on June 12, 1997. The prices in the table set forth above, where
applicable, are adjusted by the Company to give effect retroactively to such
stock split. Dividends declared are also adjusted, where applicable, to give
effect to the stock split.

The Company paid its first cash dividend on June 22, 1987, and has paid
dividends in each subsequent quarter. Future dividend policies will depend on
the Company's earnings, capital requirements, financial condition and other
factors considered relevant by the Board of Directors.

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Number of Record Holders

The number of record holders of Home Depot's Common Stock as of March
30, 1998 was 104,868 (excluding individual participants in nominee security
position listings).

Item 6. SELECTED FINANCIAL DATA

Reference is made to information for the fiscal years 1993-1997 under
the heading "Ten Year Selected Financial and Operating Highlights" contained in
the Company's Annual Report to Stockholders for the fiscal year ended February
1, 1998, which information is incorporated herein by reference.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
contained in the Company's Annual Report to Stockholders for the fiscal year
ended February 1, 1998, which information is incorporated herein by reference.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has not entered into any transactions using derivative
financial instruments or derivative commodity instruments and believes that its
exposure to market risk associated with other financial instruments (such as
investments) are not material.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to information under the headings "Consolidated
Statements of Earnings," "Consolidated Balance Sheets," "Consolidated Statements
of Stockholders' Equity," "Consolidated Statements of Cash Flows," "Notes to
Consolidated Financial Statements" and "Independent Auditors' Report" contained
in the Company's Annual Report to Stockholders for the fiscal year ended
February 1, 1998, which information is incorporated herein by reference.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by Item 10 is incorporated by reference from
the information in Registrant's Proxy Statement (filed or to be filed pursuant
to Regulation 14A) under the heading "I. Election of Directors and Information
Regarding Directors" for its Annual Meeting of Stockholders

13
14

to be held May 27, 1998, except as to biographical information on Executive
Officers which is contained in Item I of this Annual Report on Form 10-K.

Item 11. EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated by reference from
the information in Registrant's Proxy Statement (filed or to be filed pursuant
to Regulation 14A) under the heading "Executive Officers and Their Compensation"
for its Annual Meeting of Stockholders to be held May 27, 1998.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 12 is incorporated by reference from
the information in Registrant's Proxy Statement (filed or to be filed pursuant
to Regulation 14A) under the heading "Common Stock Ownership By Certain
Beneficial Owners and Management" for its Annual Meeting of Stockholders to be
held May 27, 1998.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 13 is incorporated by reference from
the information in Registrant's Proxy Statement (filed or to be filed pursuant
to Regulation 14A) under the heading "Insider Transactions" for its Annual
Meeting of Stockholders to be held May 27, 1998.

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Financial Statements

The following financial statements are incorporated by reference from
pages 21 through 33 of the Registrant's Annual Report to Stockholders for the
fiscal year ended February 1, 1998, as provided in Item 8 hereof:

- Consolidated Statements of Earnings for the fiscal years ended
February 1, 1998, February 2, 1997 and January 28, 1996.

- Consolidated Balance Sheets as of February 1, 1998 and February 2,
1997.

- Consolidated Statements of Stockholders' Equity for the fiscal years
ended February 1, 1998, February 2, 1997 and January 28, 1996.

- Consolidated Statements of Cash Flows for the fiscal years ended
February 1, 1998, February 2, 1997 and January 28, 1996.

- Notes to Consolidated Financial Statements.

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15

- Independent Auditors' Report.

2. Financial Statement Schedules

All schedules are omitted as the required information is inapplicable
or the information is presented in the consolidated financial statements or
related notes.

(b) Reports on Form 8-K

There were no Reports on Form 8-K filed during the fourth quarter of
the fiscal year ended February 1, 1998.

Exhibits marked with an asterisk (*) are hereby incorporated by
reference to exhibits or appendices previously filed by the Registrant as
indicated in brackets following the description of the exhibit.

*3.l Restated Certificate of Incorporation of The Home Depot, Inc.,
as amended. [Form 10-K for the fiscal year ended January 29,
1995, Exhibit 3.1]

3.2 By-laws, as amended.

*4.1 Indenture dated as of October 1, 1996, between The Home Depot,
Inc., as issuer and The First National Bank of Chicago, as
trustee for $1,104,000,000 aggregate principal amount of 3-
1/4% Convertible Subordinated Notes due 2001. [Form S-3
Registration Statement No. 333-12575, Exhibit 4.2]

10.1 Investment Banking Consulting Contract dated April 17, 1985,
between Invemed Associates, Inc. and the Registrant.

10.2 +Corporate Office Management Bonus Plan of the Registrant
dated March 1, 1991.

*10.3 +Employee Stock Purchase Plan, as amended. [Appendix A to
Registrant's Proxy Statement for the Annual Meeting of
Stockholders held May 31, 1995]

*10.4 +Senior Officers' Bonus Pool Plan, as amended. [Appendix A to
Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held May 27, 1998]

10.5 +The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan.

*10.6 +Executive Medical Reimbursement Plan, effective January 1,
1992. [Form 10-K for the fiscal year ended January 31, 1993,
Exhibit 10.7]

*10.7 +The Home Depot ESOP Restoration Plan. [Form 10-K for the
fiscal year ended January 29, 1995, Exhibit 10.8]

15
16

*10.8 $800,000,000 Credit Agreement dated as of December 20, 1995
among The Home Depot, Inc., the Banks Listed Therein and
Wachovia Bank of Georgia, N.A., as Agent (without exhibits).
[Form 10-K for the fiscal year ended January 28, 1996, Exhibit
4.1]

*11 Computation of Earnings Per Common and Common Equivalent
Share. [Annual Report to Stockholders for the fiscal year
ended February 1, 1998, filed herewith as Exhibit 13, Notes to
Consolidated Financial Statements, Note 8]

13 The Registrant's Annual Report to Stockholders for the fiscal
year ended February 1, 1998. Only those portions of said
report which are specifically designated in this Form 10-K as
being incorporated by reference are being electronically filed
pursuant to the Securities Exchange Act of 1934.

21 List of Subsidiaries of the Registrant.

23 Consent of Independent Auditors.

24 Special Powers of Attorney authorizing execution of this Form
10-K Annual Report have been granted and are filed herewith as
follows:

Power of Attorney from Frank Borman.

Power of Attorney from John L. Clendenin.

Power of Attorney from Johnnetta B. Cole.

Power of Attorney from Berry R. Cox.

Power of Attorney from Milledge A. Hart, III.

Power of Attorney from Donald R. Keough.

Power of Attorney from Kenneth G. Langone.

Power of Attorney from M. Faye Wilson.

27 Financial Data Schedule. [Filed electronically with SEC only.]

27.1 Restated Financial Data Schedule. [Filed electronically with
SEC only.]

- ---------------------
+Management contract or compensatory plan or arrangement required to be filed as
an exhibit to this form pursuant to Item 14(c) of this report.

16
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant, The Home Depot, Inc., has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized
in the City of Atlanta, and State of Georgia on this 22nd day of April, 1998.

THE HOME DEPOT, INC.

By: /s/ Arthur M. Blank
------------------------------------------
(Arthur M. Blank, President & CEO)

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant, The Home Depot, Inc., and in the capacities and on the dates
indicated.

Signature Title Date
- ---------- ----- ----

/s/ Bernard Marcus Chairman of the Board April 17, 1998
- ------------------------
(Bernard Marcus)

/s/ Arthur M. Blank President & CEO April 17, 1998
- ------------------------ and Director
(Arthur M. Blank) (Principal Executive Officer)

/s/ Ronald M. Brill Executive Vice President, April 17, 1998
- ------------------------ Chief Administrative Officer, Assistant
(Ronald M. Brill) Secretary and Director

* Director April 17, 1998
- ------------------------
(Frank Borman)

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Signature Title Date
- ---------- ----- ----

* Director April 17, 1998
- ------------------------
(John L. Clendenin)

* Director April 17, 1998
- ------------------------
(Johnnetta B. Cole)

* Director April 17, 1998
- ------------------------
(Berry R. Cox)

/s/ Marshall L. Day Senior Vice President- April 17, 1998
- ------------------------ Chief Financial Officer
(Marshall L. Day) (Principal Financial and
Accounting Officer)

* Director April 17, 1998
- ------------------------
(Milledge A. Hart, III)

* Director April 17, 1998
- ------------------------
(Donald R. Keough)

* Director April 17, 1998
- ------------------------
(Kenneth G. Langone)

* Director April 17, 1998
- ------------------------
(M. Faye Wilson)

* The undersigned, by signing his name hereto, does hereby sign this report
on behalf of each of the above-indicated directors of the Registrant
pursuant to powers of attorney, executed on behalf of each such director.

By: /s/ Arthur M. Blank
----------------------------------------
(Arthur M. Blank, Attorney-in-fact)

18
19

EXHIBIT INDEX

3.2 By-laws, as amended.

10.1 Investment Banking Consulting Contract dated April 17, 1985, between
Invemed Associates, Inc. and the Registrant.

10.2 Corporate Office Management Bonus Plan of the Registrant dated March 1,
1991.

10.5 The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan.

13 The Registrant's Annual Report to Stockholders for the fiscal year
ended February 1, 1998. Only those portions of said report which are
specifically designated in this Form 10-K as being incorporated by
reference are being electronically filed pursuant to the Securities
Exchange Act of 1934.

21 List of Subsidiaries of the Registrant.

23 Consent of Independent Auditors.

24 Special Powers of Attorney authorizing execution of this Form 10-K
Annual Report have been granted and are filed herewith as follows:

Power of Attorney from Frank Borman.

Power of Attorney from John L. Clendenin.

Power of Attorney from Johnnetta B. Cole.

Power of Attorney from Berry R. Cox.

Power of Attorney from Milledge A. Hart, III.

Power of Attorney from Donald R. Keough.

Power of Attorney from Kenneth G. Langone.

Power of Attorney from M. Faye Wilson.

27 Financial Data Schedule. [Filed electronically with SEC only.]

27.1 Restated Financial Data Schedule. [Filed electronically with
SEC only.]