The following memo was released May 1 to Home Depot associates:

The attached press release will be distributed shortly announcing that we are removing 50 stores from our new store pipeline over the next several years and closing 15 underperforming stores. I wanted to make sure you heard some additional perspective from me on what these decisions mean to The Home Depot going forward.

First, this is a continuation of our plan to invest in our core retail business, in this case, our existing stores. It also reflects our more disciplined approach to how we spend our cash. The stores we're taking out of our pipeline weren't expected to meet our targeted returns. They would have diverted investment from our existing stores and negatively impacted our overall return to shareholders. By not building these stores, we'll free up $1 billion in cash over the next three years to invest in maintenance, merchandising resets and other areas within our existing stores. This will help drive same store sales, which are the most profitable sales for the company.

We'll continue to open new stores in the future, but we'll do so in locations that offer the best opportunity for long-term growth and profitability.

Closing a store is always a tough decision because it affects our associates and our communities. At the same time, the stores we're closing weren't meeting our expected returns and weren't projected to any time soon. It's in the best interests of all our associates and our shareholders to face this decision now, do what's best for the company, and do it in a way that's in keeping with our values.

On that front, I can assure you that we're treating all impacted associates with respect. The store managers and assistant store managers in these stores will be offered store management positions within the company and we'll work hard to place as many of the rest of the impacted associates as possible. Associates who aren't placed receive 60 days pay from their last day of employment and will be eligible for any earned mid-year Success Sharing or MIP bonus payout. Eligibility for additional severance will be based on tenure.

It's also important to note that after reviewing the performance of every store in our system, there are no other stores that meet our criteria for closure and we have no plans to close additional stores.

As a result of the decisions we're announcing today, we will record a write-off to our first quarter earnings. While this will reduce our earnings per share for the year, it does not mean that we're losing money or that the company is in any sort of financial trouble. It just means that we're recording expenses related to these decisions, the majority of which are for the cost of exiting lease and purchase agreements for future stores. For the full year, excluding the impact of these decisions, we still expect to deliver on our previously stated earnings per share guidance.

Overall, by building fewer stores, in the best locations, and making sure that our existing stores are all profitable, we create a vibrant, growing and winning company, one that's a lot more fun to work at and a much better place to invest in.

Our competitive advantage is and always has been the incredible customer experience that only The Home Depot can provide. We'll continue investing in the improvements that are required to give us that advantage and we'll continue to make the right decisions to position us for future success.