The Home Depot, Inc. (HD) 14 Nov 172017 Q3 Earnings call transcript

Company Profile

Participants

Diane Dayhoff	The Home Depot, Inc.
Craig A. Menear	The Home Depot, Inc.
Edward P. Decker	The Home Depot, Inc.
Carol B. Tomé	The Home Depot, Inc.
Kevin Hofmann	The Home Depot, Inc.
William G. Lennie	The Home Depot, Inc.
Mark Holifield	The Home Depot, Inc.
Michael Louis Lasser	UBS Securities LLC
Chuck Grom	Gordon Haskett Research Advisors
Daniel Thomas Binder	Jefferies LLC
Simeon Ari Gutman	Morgan Stanley & Co. LLC
Christopher Horvers	JPMorgan Securities LLC
Seth I. Sigman	Credit Suisse Securities (NYSE:USA) LLC
Brian Nagel	Oppenheimer & Co., Inc.
Alan Rifkin	BTIG LLC
Matthew McClintock	Barclays Capital, Inc.
Kate McShane	Citigroup Global Markets, Inc.
Dennis Patrick McGill	Zelman Partners LLC
Scott A. Mushkin	Wolfe Research LLC
Matthew J. Fassler	Goldman Sachs & Co. LLC

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to The Home Depot Q3 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Diane Dayhoff, Vice President, Investor Relations. Please go ahead, ma'am.

Diane Dayhoff

good everyone. and Catherine, you, morning to Thank

Vice Joining Chairman, EVP CEO our call and of Craig Menear, today are Executive Officer and Financial and Tomé, us Corporate Carol Services. on Merchandising; Chief President, President; Ted Decker,

call prepared If and themselves for analysts analysts' be our are if limit our please. as and one one a will Following question during question Investor please XXX-XXX-XXXX. would will limited the appreciate would Relations Questions it be opened to unable get to with the at Department remarks, your we to investors questions. reminder, call, we follow-up, participants to the call

our turn could the These remind call press and statements the Reform today's Securities executives before to Craig, risks expectations with uncertainties statements that by cause Litigation results website. projections. XXXX. will risks release and the certain as actual and defined identified include you to Reconciliation include I differ Private to, in Act not forward-looking in that are let me of release to Now, made subject over and measures measures. factors Commission. provided these Today's These is Exchange include, of Securities materially non-GAAP filings and our but in our and the the also limited are the our on presentations from uncertainties presentations

turn Craig. me to let over Now, call the

Craig A. Menear

Sales the given by disasters, to unprecedented hurricanes incredibly year. up quarter, was number U.S. year. per quarter of positive wildfires. one third our for share flooding proud everyone. of marked a the were XX% an up morning were third year good quarter were in of sales and Diluted and Comp last performance our comp and X.X% this X.X% had last I'm earnings billion, Diane, from you, from Thank that stores X.X%. earthquakes and from $XX last natural versus $X.XX

continue and directly associates prayers communities with all thoughts impacted. Our to are who and be of our

an as get circumstances incredible too often the lives. job natural and needed worked difficult be, suppliers Though to wake it of faced St. remain our always where our these extended Puerto They our do, did the and disasters. events, closed in to paths in areas the product supporting they as to disruption these under of stores, time. quick store their worked own they As associates as Rico, to those of in St. several an and tirelessly particularly reopen forced possible stores Croix, tirelessly in teams for period of like were Thomas

by comps performance comps due organization, positive the another storms execution Our Canada were though Mexico geographies. quarter solid activities. posted did across not our the entire a We of results in broad-based driven outstanding performance across was growth the in currency. regions. Every our variability both quarter the local solely across region the to but impact storm-related posted positive the quarter, and in Internationally, in saw

both our will well. detail, to in unique the We categories, once needs both core as of a growth grew we sales quarter. the service and sales enhance We growth customer in believe DIY resonate. Ted continues in only saw pro healthy the from As not storm-related outpacing categories but capabilities transactions of in saw with doing product DIY categories, we're pro pro as tickets balance the and quarter, again for work that the to the

another them, item, stores our completed order up an our returns are as our online online of orders to in of with grew our our XX% stores and stores. online, of picked drive the sales And return for XX% approximately located being a there should item purchased customer both XX% continues online strategy interconnected total approximately U.S. online quarter, X.X% in in-store. now need with representing approximately to sales being conveniently sales, Our for in

fulfillment store, we grows with week. beyond store For our great continue the results which to every see delivery options

evident associated keeping options, given We is quarter's was areas also detail a at stores for in And the a continuing did you they to our business, competitive to particularly fact December. advantage supply stock, demand support the talk while our in more with chain unpredictability so our currently Investor this a fantastic well. non-disaster-impacted of of in about delivery natural which disasters. The we'll piloting that chain supply job flexibility while other our impacted are Conference in as did business

while a encouraged to data, believe a business. I in perspective, by continue unique a From the see housing tailwind the for business. health we positive us, signs we was this as am quarter macro the our core serves So, underlying for of which

associates, outperformance our Depot and Carol our hard guidance work will to in sales a of Home quarter. efforts store detail, especially and are the and to thanking want culture third share sales rebuilding from Helping the continued the dedication of of need close the I communities. storms, in time customers is with additional for our of our expectation exactly what we our part associated and per this a by and because associates, their quarter As earnings year. increasing did The all of for that is our core associates the

the And Ted. that, efforts. their to of proud very over let turn with call are We me

Edward P. Decker

had our a business. Thanks, driven strength by great core third in good morning We and Craig, everyone. quarter,

We comp natural the stemming response. but was included by Building their paint, In our bath outdoor the lighting our we the company's in average above positively get deflation, also us average millwork, tools. and to their growth company of electrical, growth for and average. flooring third comps allowed appliances, ticket increased demand This and increased XXX positive, departments quarter, average approximately in our ticket efforts negative. hardware, garden by comp. five partners indoor Driven during X.X%. X.X% to Commodity and below were basis lumber, materials the in Decor, at ticket thank disasters kitchen, had also materials and inflation garden communities transactions price product slightly need. both impacted and were to the time the lumber, in We copper points. quarter. price plumbing, I'd Comp and efforts building double-digit These saw teams record mobilizing from transactions. incremental supplier quarter. saw cross-functional like

Pro-heavy the vinyl was approximately of our double-digit vacs, The rates also levels. to footprint. third to low-spend and growth adjust significant by or growth in strong rates average quarter, up growth our with points. in X.X% $XXX, exchange professional in high-spend ticket professional pros. impacted product strength supply of merchandising Sales sales customers. with both also approximately special our big categories stage sales, grew which in in In we several quarter which pro-heavy better tarps and ladders. field similar our make U.S. worked XX growth, flooring, Big store our storms, increase This over decisions quarter. do-it-yourself merchandising positively customers to double in Storm-related optimize make ticket under carpet, teams Foreign such U.S. and our and lumber, third XX% product execution, quarter. double-digit and transactions to basis by the both the wet/dry with $XX, generators, inventory chain up the assortment appliances, our part all In ticket us saw were represent real-time gypsum together wire, and allowed Transactions sales digits during XX% approximately insulation, the response as the to in grew sales driven saw categories quarter, XX.X%. by plank in tickets had tools, order for categories. and sales, hand comps and our

business. core growth beyond we in in remained in Looking markets with continue and storm-related the see our strong, demand, ticket transactions. Comps momentum non-impacted both to healthy

our were and excitement with Day year-over-year. annual pleased During several and hosted We Halloween, Labor we drive the traffic which stores. that events, quarter, strong helped harvest events recorded our growth create in

constant attention Now, save authority quarter. the now continue in customers an they need of fresh Home introduce air offers the One power The improvement, most to multitude using let of circular of to The powerful LXT power cordless offers compressor of charge bringing and this all quarter, that air a compressor offers compressor on pneumatic saws, customers time convenience well innovative focus tools, even our FLEXVOLT authority to we variety the complete our market and to DEWALT Makita This Each exclusive box a area of fourth product product to DEWALT as allows continue of tools, lithium-ion is cordless our demonstrate new solution introduce new provides run-time products power marketplace. from continue both the on Makita the own. are are and we in is turn lineup for to to Depot. home me incredible product professional-grade projects. of lineup our miter that a this product with power we they to money. being to pursuit technology and fourth to as where XX-volt customers already big our we portability the cordless The new our In cordless grinders. excited battery the cordless tools. powerful we Adding to FLEXVOLT and and to a new excited lineup adjacent line recip, categories. cordless, the the bringing a tools forefront are more and In

In lineup to our our along tackle XX% with be for more host This another events. best exciting any gift big tools, ever. and season With and winter center we to advanced our With end is exclusive the and these run-time. Friday series and to preparing are Depot. of power the of quarter, holiday fourth The coming fall Home events associates tools our able will an with Black approaching, rapidly to new pros a also box will job up faster

gift brands Carol. With of Milwaukee, call few. the such and I'd a the as from Our to like best Ryobi, to values consist Husky incredible over Diablo to Makita, turn center and DEWALT, that, just will name products

Carol B. Tomé

and Thank morning, good you, everyone. Ted,

discuss our would three I business in quarter detail, in I like our the hurricanes third affected the of that to impact take touch quarter. Before minute to the a on results

to First, these we events. for saw and increased prepared demand as started from customers recover

experienced store We and closings. also DC

million generators, chain had had for categories sales some sales In stores were that the approximately in These and costs. hurricane-related estimate quarter. total lower-margin $XXX supply fact, impacted period quarter. positively additional closed the in plywood during comp we we growth and XXX like company by sales We

was So, sales our the average. hurricane-related gross on considerably our less than margin company

roughly million people experienced items stores, affected we in the quarter of damage. security storm cost, our and $XXX increased in hurricane-related for like expense Finally,

by X.X% increase dollar $XXX U.S. sales while positively versus impacted $XX hurricanes, last In an positively billion, were impacted approximately So, or operating total our year-over-year the sales growth was negatively million. total $XX weaker of third A our quarter, by X.X%. impacted sales profit was year. by growth million the

with positive were with August, stores positive in a were positive In August, quarter, sales for margin October. September, basis in same-store comps last Our U.S. X% and total was September, of XX for the for October. in X.X% in X% our quarter or company X.X% X.X% X.X% year. from XX.X%, X.X% the the positive in gross comps and X.X% comps points in of quarter of Comps third decline

many the points in to change XX While to we the of there the our In basis quarter, year-over-year sale. were performance can by factors percent margin third decreased expense gross as hurricane-related drove impact quarter, operating a of that the XX.X%. isolate sales the

expense we mentioned, operating the as and sales sales hurricane-related Backing was the expenses percent quarter than plan. had associated of I out million previously our expenses. during approximately a with hurricane, the $XXX of our better As

higher an Our of compared quarter of Interest effective versus year, by balance somewhat the to for by third operating quarter, was last and XXXX. third to our debt last XX.X% expense the XX long-term basis rate $XX XX.X%, fiscal third points In year. higher reflecting XX.X% quarter interest grew in offset million the from the increase a income. for $XXX million, tax was quarter third margin other

of diluted an quarter per earnings XX% third last $X.XX, Our for from were share the increase year.

to Now moving some additional highlights. on

were quarter from ending store of store opened an foot X,XXX. up the last Total square During new count sales one the Mexico in for $XXX, we for per year. X.X% third quarter,

our X.X shares and or repurchased two-tenths end Turning to from year. This of sheet, million from we X.X the shares merchandise quarter, stock. the last year, last at third $XX.X billion program. accelerated the inventory market on of quarter, the through up up an $XXX turns share the and million repurchased were billion, times, or In were balance $X.X shares million inventories included approximately million open repurchase ASR XX.X outstanding X.X

the in determined For the will ASR be repurchased the the an upon program, quarter. number ASR shares repurchased The of is shares initial under fourth this of completion calculation. final

For fourth fiscal XXXX, $X $X.X we're the now billion targeting occur quarter. share of billion, which will repurchases of in

debt, an and billion attractive higher of advantage September. $XXX than due on quarter, the of fiscal came we $X used environment invested million was the debt Computed debt and average to raised in basis which took the points trailing of XX was months, that and ending return capital long-term for XXX interest rate repay During of beginning equity approximately the on XXXX. long-term third quarter of XX.X%,

to year, we and housing for of Turning remainder we strength macro core momentum business. continue remains the see the outlook and in our environment for The our our tailwind believe supportive, to business. is a underlying

expect we across continue recovery hurricane addition, the our a to In markets. of efforts number

now X.X%, approximately growth We points. positive lifting We to decline basis our result, to our now we today XXXX guidance. by of margin XXXX As are approximately per comps a fiscal earnings XXXX expect X.X%. sales gross by fiscal share increase fiscal expect with and XX sales

and the impact at hurricanes, XX% rate. to grow sales year now tax expense our finally, effective approximately we be of our the expect And the expenses reflecting rate the year, expect of XX.X%. For growth to our approximately we for

we remember that off GAAP. earnings of guide per For share,

approximately for on give in we per For on fiscal you you XXXX, now you increase financial an X our expect Catherine, call update strategic today's diluted and, forward look for our to your XX% will Boston initiatives and are targets. we thank We key with long-term now in participation questions. ready to $X.XX. Conference share We where by Investor talking December we to our at earnings

Operator

We'll Thank go Lasser to first with UBS. Michael you.

Michael Louis Lasser

Good Thanks a question. for lot taking morning. my

Craig A. Menear

Morning.

Michael Louis Lasser

over expect the or greatest be event sales results? trajectory the tails time, have the the So, spending it period to then how expect how you off And right an you will the of look? and to hurricane-related consistent impact course do it long to your over is it pretty going initially impact? around that the Is

Craig A. Menear

the to Hey, we Michael. continued pretty see expect, think. from It'll the hurricane increase half move We certainly into sales first as called be Carol XXXX. in out, much we as

Carol B. Tomé

Yeah.

experience is a highest sales and Maria, off on year. quarter Superstorm in Rouge smaller of although like lot Harvey hurricanes Katrina, a Baton a Hurricane over on the much we was flooding much have with Hurricane scale, it's we well, that like last So, hurricanes Sandy, Hurricane see much the like Irma our tells quarter to then be smaller in following past And the and although scale. that tend what time. immediately the hurricane-related occurred experience us tail the the is they and which

would we to throughout them said, Craig expect As tail off XXXX.

Craig building appear sales of tell happen of weeks quarter, we our sales you our in purposes fourth the the will the For be fourth We we it's hedged as some on weather. same mentioned, quarter no and anything comp the put hurricane forecast XXXX guidance two to be in had as expect, with result (XX:XX) XXXX. the back impact, When year would conservative, year-on-year I would forecast a of at there a have a hurricane-related of because can but and that next of forecast. in the first good anticipated DWIT thing November, today, would it's hurricanes. based sales the our the have together we we to in look amount conservative as would

Michael Louis Lasser

quarter? amount you Carol, that do what the in expect tell the you explicitly to hurricane-related want fourth of spending us

Carol B. Tomé

specifically tell to like not would I you that.

Michael Louis Lasser

I piloting. Craig delivery thought would or that you forget then, Ted, and about little And tease about was options us meeting try. talking analyst I I of Okay. a one the you're gave it new

dilutive like of got, shipping you've If all P&L? now, online qualify on would top dollar out you've your about free shipping. got your right threshold that how be items XXX,XXX looks overall to that X,XXX you some It free to of were margin go your SKUs, for across would

how if be? margin you went would kind what So, of board, the across that dilutive

Craig A. Menear

today shipping. offer everything any majority over free we Michael, order $XX, on we under the falls shipping free so today ship of

Michael Louis Lasser

much. you Thank Great. Okay. so

Craig A. Menear

Sure.

Operator

Charles from comes question Haskett. next with Our Gordon Grom

Chuck Grom

worldwide? just I'm in wondering hurricane to throughout quarterly speak of progression the sales, the morning. the U.S., guys only you – but Good could Thanks. the excluding not if impact

Carol B. Tomé

but just not and and the recalculate go we you impact then the sales cost, the back and in We do $XX were project me the sales project, that August Well, in $XXX have sales tell of you in didn't about the million, hurricane-related we were seen hurricane-related million, – October the September about hurricane-related hurricane-related can the were sales million. but $XXX math. let about

Chuck Grom

ahead think you math you do the it to could going just the sales significantly do when the Yeah, quantify historically look gross in when were than see wondering these going And typically progress of they try then, impact has forward, line, margin how about Okay. the we lower out? quarter you Great. it, of here top the and how I'm would forward? played third they profile Obviously, but there.

Craig A. Menear

think sales, that about happens generators largely prep as you into a plywood very goods. if rate and you are When which low-margin things selling move the like you're kind storm, of you will,

and to that across has And is. get mix past and tendency move begin sale depends be a storm normalized you business, of and more the you the into a it business. again margin it on normalized cleanup then As in that the type recovery, that of to more see

Chuck Grom

very and good much, luck. Okay. Thanks

Craig A. Menear

Thanks. Sure.

Operator

We'll Thank Jefferies. Binder from Dan with now hear you.

Daniel Thomas Binder

Thanks. morning. Good

Craig A. Menear

Good morning.

Daniel Thomas Binder

battery It one few seems a has fit how on curious positioned thoughts technology. Home little You emerging benefit that. aggressive. to just talked like Connected there, Depot product specifically some particularly you I'm an from bit been a also us retailers if for could natural about a been home is different innovation, the has out give category.

Edward P. Decker

Yeah, Dan. It's Ted.

I well think very we're positioned.

most very coming some selling thermostat nicely of with product new from right that's bit Nest. a quite year-over-year. product strong I'm about the out have now We excited of growth

some us launch Ring. given They've with Ring We've number coming product partnering for nuanced innovation great well as a from been time. as exclusives have We of exclusives.

type in I and their market we sell display Depot's But we're speaks Home of to product think it. ability the bring that to that confidence how product. to with experimenting

As aggregated happy different formats merchandising approaches now. working you series in get know, is different we're with to product the how utilizing so right we're of working we're a that of bays number with warehouse, and something a on,

Daniel Thomas Binder

color portfolio – just delinquencies, lend, as to willingness don't know but portfolio, increase on topic of And Great. there's you follow-up lending, separate an how nature. some credit. us question, that a write-offs, provide you then things I for own if credit with your can if on in wondering is that doing, my

Carol B. Tomé

Yeah, much. thanks very

right, portfolio, credit you're own the So, into billion. portfolio. don't of portfolio our we It's a net very visibility an with receivable we but have $XX.X average do healthy

look see performing nicely. inside portfolio, it's As the we that we

Our loss the but rates X.X%. average, they're perspective, year-on-year, historical historical are The up put under slightly is to average. in considerably just

In are for our for that applying credit card, on XXX. label FICO of see applications the being of with side approvals terms private XX% customers approved all around of a consumer we

quality pretty write So, we a high here.

the are line around pro XX% side, is pro, approved, On and of $X,XXX. that for being applications all the

that's So, helpful. hopefully

Daniel Thomas Binder

you Thank very much. Yes.

Carol B. Tomé

Yes.

Operator

Gutman Morgan And we'll Stanley. Simeon continue on to with

Simeon Ari Gutman

the traffic be Good diagnose of there's ask behaving. morning. on customer, on there's to and about do-it-for-me do-it-yourself if of how gleaned frequency And any I breakdown or you lot customer as are because segments the cycle based versus if ticket health the changes something quarter. ticket? the the the a Can Nice focus in seeing you're

Edward P. Decker

small categories large business the And towards tickets and tendency seen categories. roofing a the across growth DIY which below well. more in strong improvement result appliances continues as and see like as and a ticket And categories, lean actually growth the pro sequential pro we've DIY the to flooring. of and categories ticket quarter-over-quarter, $XX, do-it-for-me have We both the a

has that not the business. about So, DIY at all anything us concerned really seeing

Carol B. Tomé

Or do-it-for-me.

Edward P. Decker

Right.

Carol B. Tomé

No.

Edward P. Decker

one. any Not

Simeon Ari Gutman

two follow-up, my just And Okay. parts.

cold why. comment was First, And winters? couple represent quarters? it tough we've year, looks we the winter follow-up a like can this change or curious compare It couple online the had a in get any the margin sales? does since of second the if next on slowed, a you any for way And that warm then just, the I'm trajectory part does complexion

Craig A. Menear

will of weather, you do other terms the in some what if will happens categories will, categories better weather, cold In is not.

cold project had of we've heaters that so then type categories warm the things, on. through So, benefit on like winters, in your business puts but weather actually the pressure and

a really offsets it's other. one balancing So, act, the

Carol B. Tomé

look have not and are to business tend you year-over-year talked bathtub we and to the half occurs. the at about always why effect we because that's that in first the And that weather-related these our compares on half this we've quarters, there always

margin where the based pressure is margin are, margin, real coming sales us. the the no at is but the On what on

Craig A. Menear

Right. actually here. growth let is pleased with I'd online. him comment. We our were Kevin

Kevin Hofmann

our and Yeah, business. had in bath coverings we saw mentioned, number affected days a that caused And actually of our stores quarter thing strength of were to Carol flooring business, the us. window in had real we due blinds for the penetration our a and only but they the as impacts businesses, stores, was closed those blip some our hurricane that really that online in that

Carol B. Tomé

the sales And a growth XXX pleased $XXX to Yeah. closed just perspective, as closings store X.X stores with year. entire so were The having the which days, is for put cumulative were was an same year-on-year, closed they we million into that.

Simeon Ari Gutman

you. Right. thank Well,

Operator

with JPMorgan Horvers question. next has Christopher our

Christopher Horvers

morning. Thanks. Good

Craig A. Menear

Morning.

Carol B. Tomé

Morning.

Christopher Horvers

on So, I to follow expenses. up wanted the

you at as The always do top think you kind of look about sort looks Home is at right to Depot. upward your still is Do you the a XX% pressure sort versus about there's you SG&A line number? and see XX% Do like Or typically on productivity the right XX% number? sales business? any of and opportunity sales? that flow-through the grew that XX% impact, SG&A around marginal So, bottom a you line ratio I to guide in think ex rate. know forward SG&A How you it the hurricane growth of

Carol B. Tomé

to and let's year. as the quarter we've because The factor know, some you the don't we to you in some guide And nuance United when bit Well, growth back the year that quarter. may just the a growth outperforming reasons. going guided expense sharing have our will we the as but be be weaker quarter. the fourth third States the not the natural you your color quarter. some few fourth expense U.S. is why of little now all extent this translate fourth XX% good I'll with then fourth give have such are hourly are what factor that, quarter, them for there's little happen you fourth the that which in going news say dollar, more will fourth we've at we entire a entire year. we'll the currency One, on but similar expense our be quarter look hurricane-related in put it growth to will in the significantly been and, just bit and should means there the our on paying on ongoing to lifted delighted actually bonuses, the plan, we higher you so in Two, story know, than we're disaster for a a is of that experienced expenses have expense pressure we're success And And for last but have that's a is associates. guidance Well, when outside that that? quarter, factor you expense would more some

financial you on would we'll know, XXXX, And things. so you December give So, on targets going we're what hopefully everything the got that then like. such new Investor up Day helps for quarter to look through coming as we've X our fourth grind guide and

Christopher Horvers

XXXX about, it like look think, as you if seems think but – to XX% you guess back grew, relative I sales. I I in

upward So, cost pressure does sales? on incremental any that sort indicate of versus

Carol B. Tomé

Yeah.

we in All retailers our mean, pressure. the lift included and good use alone. You and faced costs to of people margin are a XX% people day, recall people of the we at the costs. view company Chris, not I at rising so end was year beginning we of But, a that BAU the said as rising this number we're have wants with operating that basis. the investment, an some to

use. BAU to basis expense a number leverage a that's want you and as BAU in XX% a to We will if good number, use

Christopher Horvers

to not like crystal that confidence you DWIT as seeing Understood. And way that about guess versus guide there's bigger this seems look from are gives this a then what you point? far last motivate just there? It in in What ball, at hurricanes you the the year, year your the curious why so (XX:XX) (XX:XX) this talked DWIT let about would year. no you next put that I out? saying the Street to you hurricane

Craig A. Menear

a I mean and each of was is very as of because much the storm situation shared, a the different more than Harvey different two And the we've Harvey recovery protracted storms. water-based the fair insurance there and nature in other XXX-year storm didn't Unfortunately, in being that a is they live have the folks they that because were fact didn't were a amount XXX-year floodplain. floodplain. of in

you up basically down have to ripping to be a in that, in and while going And people to everything storm so the a and studs we starting is recover. to go protracted. just think take recovery to That's like going And that that over. are

Carol B. Tomé

you. well, Baton the it us, looks going at Rouge But got example, like if an – if I'd a XX-page you but it's the not X.X I've I'm have We times tell much really as to look that – Harvey tell Rouge. And we bigger you. work deck flooding, so Baton than for

get that should So, suggestion. of put multiplied experience appreciate appreciate a but our not suggestion we we behind maybe times I to into effect by year the There's DWIT it actually this three the Baton (XX:XX) for this I'm went a but next. I in of the Rouge, point but that science in just expectation, and modeled lot kind hoping to,

Christopher Horvers

half half back first versus it's So, basically? XXXX, a

Carol B. Tomé

Yeah. Exactly. Exactly.

Craig A. Menear

half. be yeah. – be the There'll We'll Yeah. good in first

Christopher Horvers

Understood.

Carol B. Tomé

Yeah.

Christopher Horvers

much. very you Thank

Operator

Suisse. you're to but seeing that to continue nice what the Suisse business, is Securities morning, isolate, grow starting in or on whether think comps place, I. catalog, the of those follow (USA) the double-digit driving continue can maybe it's Thank range. some nice Thanks. in and increase I offerings Interline and delivery We'll see on Sigman to Seth up it's or that with to you. utilization to I Credit to of Thank Seth pro quarter. you. Sigman really the you credit LLC - to wanted realize is some Good about you Credit some where of as you think integrating initiatives point of traction? tough

Craig A. Menear

Bill?

William G. Lennie

is – in some the It the view to project is Sales strength, Pro strong, a store transaction. how really we ticket between a our this balance into to insights business expansion customers. of broad a and well gives that whether engagement for be made better a better and the on Pro better system say enhancements get base Account continues MyView that our But their as Seth, on (XX:XX) business have as which Lennie. I'd with Associates it's Bill category and good or to where customers to reach PASAs pro our

for that. outlook, I. that a the Thank millennial demographic Thank then just as home different Seth anything give LLC group and of the reach it's think important the Credit increase in consumers. target our you're categories, about other think know we've increase another are do business as of the of stores of as pro on and we is we going that, the we - seeing, increasingly Okay. whether that in of that well. area customer you and follow-up, assume where customers' we us things that's also whether over get the pickup Securities Compact Sigman And observed And into services, to increasing we we've codes the engagement, in any solid our of do we're against customers' that with top engagement more you. one wallet just continues among customer online, pros that got seeing try that the start there's engagement. you FCC against can I that increase of performance housing what Suisse an share a shopping to for number for is if you (USA) the our And to can behavior an Power things a sense If growth acquisition become delivery, in the doing the of see business. and Then of terms one whether pros. time, that multilevel the ownership we customer it's some you're to it's base?

Edward P. Decker

I. no difference. our our Craig actually the home. Seth Thank the garden where do showing ton projects was are We're that trend. that kind the things Sigman that simpler in is in in fact, a keen interest says the to home And place on DIYers takes millennial delayed that like millennials paint, and and engage be cycle beautifying saw It that the much. is pleased and that, that early to in that research Obviously, Also, step of the is forward. LLC very very very any begin in a going Those home playing not think to would, the group Securities well happened to projects of ownership, Sure. research, as for research, think that are This as we bodes about that they're projects categories Suisse categories Great. (USA) of they're new is you going some into is a with their we so age new market ownership. out. if matter themselves. outdoor seeing Credit housing interest something you that types we similar the home. what see of like well, actually said, we're But - just quite homeowner buying an

Operator

you. Thank

from will question come with Oppenheimer. Nagel next Our Brian

Brian Nagel

term efforts here Good in Depot market sales the about, morning. share near but consider share business? trends to these quarter. Home is clearly normally to there events help I the you to this nicely way little Hi. – hurricane your how what market versus in lot be its measure in might With Nice we've talked know regard and from customers, focus, a tracked but a stepped would any up

Craig A. Menear

that. Yeah, unfolding we right way now, really have that. of no happening, it's of It's have knowing it's any just we just don't way – knowing

Brian Nagel

Okay. That's fair.

business. to second a but I question online, still we it as called had out of the with The regard small a again portion growing,

should to there with your any And investment to online also, about Thanks. initiatives? surprises evolve, support are buying the maybe continues regard needed just the continue then customers is we what here online As how to think to online?

Craig A. Menear

terms the thought of I'd back we shared any there of in of influence. thought our much surprise lower categories, business we probably thing online say businesses chart out I that As how will, the was play left if several think, to in online, you is chart, it the relates years bubble in that we a wouldn't by would and group there have the

I experience think almost interconnected digital forward. going now it and an thing in that we've the is the category world every realized shopping is the truly in experience starts

across the for you go experience, category our few representation and an the big, had. creating attention if learning Depot I'd that's paying from all of as the interconnected digital we've business Home one we each that to say, forward, we're back probably years will, So, experience a

Edward P. Decker

the key listing power lot of that that The price. businesses. ago we is of some three purchase and the mentioned a on with matched are that in our at haven't again is chart Craig today. a Craig, see our lot the against of what engaged, highest To lot you of behavior. inquiry, get categories levels lighting, to with online build categories big actual commodity, bit, large a were But checking cetera. intensity engagement the and the large a continue said, years It's bath, lot of a heavily going tools, pro of et all then changed looked be online we're purchases much. our And online and purchasing bubble large not to inventory pros most as Those

a to going experience. to again sure They're want go make before the store, very then they their they still to project everything the store. there interconnected is shopping So, for but

Carol B. Tomé

experience our at we to December Conference lay out have means in continue plans. invest will the X, investing our that on to and so we And Investor

Brian Nagel

to very Thank forward much. look I So, you that.

Craig A. Menear

Thanks.

Carol B. Tomé

Thank you.

Operator

BTIG next with our Rifkin Alan question. has

Alan Rifkin

and Thank a quarter. congratulations very you on great much,

Craig A. Menear

Thanks.

Alan Rifkin

Craig. for things? doing exactly asset the you you. of there color flexibility be benefiting more sustainability you First are Craig, you question little mentioned bit your an just maybe Can a provide what continues on in that supply chain the of to

Craig A. Menear

and have say the too. the creating but? And, chain, want Mark, deployment network, needs Mark I starts here, to also I that investments where a I'd been all there. core our Holifield it our it don't add to we've goods ability has made be. And flow Sure. rapid RDC components He point advantage supply can our to or jump know if significant in of on that, in you in, to And but

Mark Holifield

Well, improvement in truckload much our initiative our focus with our continues four to within be centers whole we've to more supply resources that. vendors supply on using do the collaborating and more distribution working happen. of achieve creating through we're building the home that the that, our walls and trucks our results Sync a to efficient and to and suppliers filling planning our fastest And capably and productivity with our our much in chain flow of synchronizing really great make chain had most

Craig A. Menear

one that's just guess comment have they our Ted play key do that, you field I'd is and of the key And field become and these where truly component in on situations, the called out last in of chain point type and will, we I that help general role the battlefield, if sense merchandising a as team. efforts. on Alan, They what supply well. a direct merchants' a the

Alan Rifkin

effect billion, to can lower if I your if a for Inventories And Okay. levels there maybe are up than $XX.X substantially revenue you Thanks. commentary from at hurricane, follow-up X.X%, inventory on any, provide, you those And on Thank the was What Carol. now? some may just satisfactory about right your levels? just growth. you. if Carol,

Carol B. Tomé

impact an the get did the in our on enormous it the stores to need. products hurricane entire and of and to the redirecting job our awesome customers team chain supply Well, of was

we're source, we worked inventory associates flow the great who really supply are. then them our hard with them sell very chain. to our of inventory terms In our drive We've inventory to starts the through where and that and we how and pleased levels, turnover, productivity products that

One of and is chain, supply something we've in of the variability which call we been orders. initiatives predictability lowers think, the we that the investing improves

of One inventory desired the productivity outcomes we're seeing that. and was higher

happy. levels. say with very to Long-winded happy we're we're So, answer inventory our

Alan Rifkin

very you much. Thank Great.

Carol B. Tomé

Thank you.

Operator

Barclays. you. ahead. Thank Matthew And McClintock Please go with

Matthew McClintock

you your two kind segment algorithm from Hi, to question but back value to do want past, in said should versus, think store the Good guess said growth those maybe, Thank morning, a natural you in from you. there's leverage that And going Carol, lift, we that growth the you've you for how coming everyone. you In expenses. value. will margin reinvest or about is, tendency buckets? experience How reinvestments deliveries? further investments gross yes. your in the of investments future forward always my I in

Carol B. Tomé

we to There's of We're future for we're part view devoting several an both you question. will parse X investing there then how view be about asking point the on Thank good the doing a you that. we'll of and going the Investor over you Day our December a share a and through to talk and be of real with of to next clear give years. point understanding what BAU

Matthew McClintock

I'll look forward that. to Okay.

Carol B. Tomé

we've Investor in the weeks. just an the kick got to few road, down Day can Sorry a but

Matthew McClintock

to trying thunder way. in Not any your steal

Carol B. Tomé

Thank Okay. you.

Matthew McClintock

just the Thank to on Dan's of a more I your connected selling about if broader how regarding as how evolving offerings? become specifically, ask do you. they and appliances into think you then, tying could follow-up think But about On model question connected home home. connected appliances that

Craig A. Menear

up the closely. We're coming some that with engaged them innovation. product very are working we're manufacturers with really Well, terrific

We view in what's a products the integrate We have store. of the pipeline into then coming. with other

much As platform we've other can through very any open-source work an hub. before, our any with said where agnostic products we're products an of

in So, a into, a products, effort a lot of put yeah, online category We to great we've a think we It's showcase particular added spot. all get lot collateral spin delivery and in and but installation, we're the our hours to and for the lots actual customer to installation. ready XXX-degree home contacting before of features before and and the day a model, then photos appliances. and measurements how

and part model thinking business all of our end-to-end for appliances. So, it's development

Matthew McClintock

forward seeing look Great. everyone. lot, to Thanks and a

Carol B. Tomé

you. Thank

Operator

Kate We'll with McShane to go Citi.

Kate McShane

morning. Good Thank question. Hi. you my for taking

Craig A. Menear

Morning.

Kate McShane

My on Interline. question was

inventory your level? way meaningful ramp think at is more are much contributing salespeople store in access integrated business is much to there's and do that a up that that you Home Interline And think Depot do how that able for the to you comp? how The room customer, to Now,

Craig A. Menear

direction about excited you... Interline integration that. and results and Bill, continue very we're with the pleased to start me of let let overall business in with the we and And, work all, we're I'll business, seeing of we're that the First

William G. Lennie

the rolled we really Kate, out stores. into So, two have initiatives

pro electrical, first nice categories the and catalog for pro in would expect fashion sales one customers seeing is we to engagement plumbing, to week-over-week running MRO, them that HVAC, which in the gives to a in Interline are target be. in where Key the ramp engagement and pros stores with we're those our The access on right shopping hardware.

really core to some together So, And the access pro center accounts, ProPurchase that which business. It shop and our would it's a right trending both December, their back customers a up. swipe as gives to card have billed and steps second that, in down initiatives the I but we're phases. card. ramp with we're onto we'll Interline seeing of access and and We off our with adoption talk purchases rate of initiative then it's then for the about when describe we're the is and the that light were their launch next pleased nicely back stores and the card next

Carol B. Tomé

opportunity hard see that the a set all through size way it's line now, those is but trend in of company, flowing trend on the our the right measurable success right. and the is is top to Given positive, big. The

and described, we've so billion, space the a lot market to $XX we're the of is just there's in grow. room surface addressable MRO the As there, scratching

Kate McShane

you. Thank

Operator

on Dennis & continue Associates. we'll And Zelman you. Thank to McGill with

Dennis Patrick McGill

Hi. Good morning and thank you.

guess, storm October, as you benefit disproportionate of the I from end there First October seeing what categories on into November, that in are a call Ted, items? some of the I you recovery, repair maybe out could question, guess, tail saw

Edward P. Decker

said, the Craig both if look preparation. the storms, similar of think the I categorization two in as are you Well, at very

of generators more to debris that, like and et the literally floor outdoor things chainsaws to tools studs. plywood storm and doing getting and windows, and board lot water, You're flood market, ripping removal. up when then the hits, And the Houston the the a you're in you're After there cetera.

et and and cetera. flooring, wiring a bit gypsum and paint appliances, have product, and flooring devices quite cabinetry mud you and So, of wiring and also

roofing like and in more exterior storm shutters, that say, the that's exterior coast, paint, With things Florida went up some and that. gutters, windows, damage, the

the storm into out homes. flooded-out as of the get see fit-and-finish much we Houston we interior the So, of more of duration

Dennis Patrick McGill

that's be on last in That's side the where And to some fourth and the helpful. you've able side, within How the you on you on area can an of solid top maybe the the different several year's that another would Okay. being frame might this of things. been any provide upside, conservative quarter holiday then, hurricane would holiday generate about Carol, you success? years color been lift side additional this and last on forecast what year, the create exciting year talked

Carol B. Tomé

and Yeah. comp that, plan last to we're a conservative Well, year's results, we going maybe have forecast. outstanding to do and we

bit a even better. maybe So,

Craig A. Menear

the results. early We're pleased with

Carol B. Tomé

We sure are.

started of weeks off have two first The very strong. November

Dennis Patrick McGill

guys. Good All right. luck, Thanks.

Carol B. Tomé

Yeah.

Craig A. Menear

you. Thank

Operator

Research. Thank you. Wolfe Scott go ahead. Please Mushkin with

Scott A. Mushkin

my for guys. Hey, questions. Thanks taking

– November, to want want outside know, just I mean strong the did I after us a to to in of how wanted you comment give guys hurricane areas, are So, comp? just things that I last U.S. about

Craig A. Menear

can but we'll No, do I that, you think don't I this. tell

in comments. mean actually with as business. strength geographies, pleased transaction see I both our a said in business, Our hurricanes, business the areas standpoint, key not very ticket business, the we're across in look you from across We if categories the growth affected by the across and at a we standpoint, earlier growth store

we're with the in the So, business pleased now. right very trends

Scott A. Mushkin

comfortable strength? calling you it would sequential be And

Craig A. Menear

Yeah. I mean...

Carol B. Tomé

Sure.

Craig A. Menear

as on if a you it basis, well look sure. at stack two-year And Yeah.

Scott A. Mushkin

thing that tax Then plan, in talked just we of hard-lining Okay. and a I saw step-back of been and get lot hasn't a with had one is on wondered a Obviously, rollout move but we in the of go too. one a we fears ex the of we are if little if policy. into you that's about the we home-related we we questions, questions we names, policy. the some that guys lot the slowdown get, any had the hurricanes. you a House could business, actually thing thought as of Where your question tax XXXX, cycle? have in as the XXXX And kind into Generally, see about (XX:XX) Thanks.

Craig A. Menear

Sure.

reform So, say economy supportive very on jobs. and that a fuel would we're tax of broad basis, the I'd create

we there's that's falls a place out. we this here. We'll hope House I obviously And Senate. that so, see think see And the take on something and going between all the where lot

the an to and would are of impacts But mean get large an of that households mortgage have As We have housing, part believe the elimination it think impact deduction know don't pieces the it relates pretty today. fact that tell. being much, the going that it's described majority discussed how subscribe much interest wouldn't early don't from because has passed. to impact. individually I we to what's of just and some in to what's we candidly, we don't

Carol B. Tomé

early It's days.

use think And of excess those the actually And it Our might way of people bracket. about only to their what mortgages, who based so excess only the a that it's $XXX,XXX then then deduction. think it's impact and of of who And tax material X% deductions, research in to that with rates mortgages (XX:XX) really low, shows mortgage not of impact. on mortgage. use have about, And tax the $XXX,XXX. have mortgages XX% actually have itemize well, marginal have filers if in you is the to who cost

$XX In a that fact, we points know it's rate, XX mortgage every basis month. in for increase

the you math. So, can do

think there'll with as don't a up own here today, we impact. – stand your be impact. But don't come can You just material we

a XXXX, still prices trough? may you they of they're into digit. effect they forecast We've formation or the equity and spending $XX,XXX increase and created appreciation, price broadly higher housing talked slowdown, we basis, yes, double when prices, with year that's per have, number to and are in recovered inflation you of And for home that about very about think an down home, is reasons. say, that's price hot, XXX% been peak good. home. a wealth there's appreciation translating home think really on been in and haven't stock, but the and see about the next XXXX And aging housing home well, we an XXXX household fears As about don't for Well, home for fully about

underlying – see just we at then at slowdown, of look don't website, what we on in and happens it. rumors and and our our the data because we don't every see the our we So, impending look stores we day don't

Diane Dayhoff

Catherine...

Scott A. Mushkin

Thanks.

Diane Dayhoff

have for one time ...we more question.

Operator

you. Thank

Sachs. Fassler Matt Goldman Our final with from will come question

Matthew J. Fassler

for questions tactical morning. on Good Thank couple you Two a clean-up so items. in. fitting much kind of me of

all, of storm numbers the about quarter to your discern First tough the but moves line items, you think of obviously, you impacted if could individual the in numbers traffic significance quarter. ticket talk a versus it's how your during

Craig A. Menear

in Houston, areas So, is at storm departure versus or give again, when and at areas, And you the stores, transactions Matt, pretty – actually significantly. up up numbers, see regions across comparable. around dramatic which non-storm. we XXX is didn't we looked look tickets when market see don't a departure. regions looked Obviously, big and when a take, data But versus we and at business that the the storm are, non-storm

Matthew J. Fassler

ex Obviously, environment. promotional about gross the the And margin looked we then the secondly, of talk clean. impact didn't the storms very much

business for appliance relative quite the and of didn't half was noteworthy to to Anything that. Your in first the pay a price seem strong, particularly market, the year? you

Craig A. Menear

much the are Most Yeah, promotional right environment. people's we out similar on pretty promotional cadence. so a it's last Black see and Friday pretty maintaining ads year, current

Matthew J. Fassler

That's helpful. much, so you guys. Thank

Craig A. Menear

Yeah.

Diane Dayhoff

Investor we you joining us on December all our Conference Boston in for forward at today, you thank X. look meeting Well, with and to

Operator

conclude Ladies your once you. participation. conference. again, all Thank and that today's gentlemen, again Thank does for you

now disconnect. You may

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.