HD - Earnings call transcript Q4 2021

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Operator

Greetings and welcome to The Home Depot earnings call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Isabel Janci. Please go ahead.

Isabel Janci

Thank you, Christine, and good morning, everyone. Fourth Fiscal Depot's Call. XXXX Home to Quarter Year and Earnings Welcome

as the today's we you to priorities performance, about on look take strategic Following our minutes will comments growth. phase next of a few our we towards update

during questions be we to We will and of department. our the for investors. call, to are analysts questions. get Questions the [Operator the prepared will until question our end If After unable call remarks. to Investor your hold that, limited Instructions] all open call please will be Relations

after referenced call, supplemental In our Relations addition, as in the to will quarterly website. few earnings a release, the post Investor we slides

Joining Officer. CEO; Executive Richard us Menear, McPhail, Craig President call President Officer; Chairman are and Chief and Ted Vice on Financial and and our today Decker, Chief Operating

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

Now over let Craig. turn me the call to

Craig Menear

morning. everyone. for Thank you, joining this our Isabel, and call Thanks good morning,

for of year. XXXX growth. progress competitive together, been let's The team our an will Home about talk which last through nurturing of But team has associates, the record of over phase sales. our billion honor company, I'm that, advantage. years for another been effectively know, year it blessing our accomplishment is confident before $XXX shareholders the and that but first I this I Depot has Fiscal believe the as X.X customers, my the its greatest proud was you is we CEO. and serve The culture for made call, last the extremely this guide as our has perhaps next we of As and communities earnings a to am discuss in achieved this milestone Depot leadership Home a results

by have over with agility. resulted We've in We delivered and XXXX. fiscal the environment comp billion comp on we business fiscal that a double-digit X XX% growth navigate $XX continued to years. last of top in fluid over challenging XXXX nearly for growth the grown This

the $XX XXXX For pandemic, X years context, business prior to from it billion. by the grow over to took us to XXXX

what a achieve to teams in So orange-blooded X been the of to level our past is exceptional our has time execution. testament their None associates. growth X been over years' accomplished would years that our have of without truly and investments, possible

and transportation Our tenure supply maintained labor also simultaneously with of our success. our on associates to partners and the disruptions, industry-wide key tight has ongoing strength our chain supplier the customer inflation market. a have their navigating focus and The pandemic, relationships relentless been while

turn will I'd efforts want our details could each continued respective in Ted, product Success strength work over hard our our XXXX efficiently With quarter stores performance. on and I additional that their like it to to Sharing, in resilience provide associates. Their teams our product hourly of to Our tirelessly in bonus depth communities record resulted for the distribution centers associates to all as and thank of possible. have to quickly key categories and demonstrate, fiscal and customers, extraordinary as worked them serving who our other. build to partners fourth program dedication that, and to and I our proud flow have be and more and not some for

Ted Decker

good everyone. another X.X% remained billion, strong. as improvement finished quarter quarter up Comp exceptional of were Sales last demand and for X.X%. last to $X.X home year. sales XX.X% U.S. morning, year Craig, grew from from year with up the $XX.X approximately with We billion positive Thanks, the fourth comps

During regions storage quarter, materials, company comps. and electrical, our comps were all paint. plumbing, Departments average decor above posted departments and the and of fourth merchandise building positive the millwork,

our kitchen garden line below company company average. positive tools, but flooring, appliances with bath in the And department the average. departments was Our hardware lumber, were and

During across driven increased our was comp volatile. our the product building Comp in our approximately basis quarter by XXX X.X%. growth Core inflation Lumber comp categories materials points average positively in ticket quarter, copper. by categories. driven average the fourth lumber, impacted inflation and remain in several primarily The ticket ticket average fourth XX.X%. by transactions commodity decreased prices growth

transactions and increase for For the over ticket pricing saw positive lumber to quarter. board an both compared We the in example, strength both fourth alone, the basis, comp in DIY continued were approximately fourth or of over X-year Pro transactions up $X,XXX last comp a to XXX%. than approximately comp X,XXX those and more fourth year. our were framing XX% quarter On feet, healthy the customers. in ranged Big-ticket quarter of $X,XXX per average and from $XXX

year. DIY for digital growth. Pro relative basis X-year quarter strong to showed Sales fourth and both for groups. fourth quarter growth the our leveraging the customers on sales in grew quarter growth X% approximately for Pro the DIY a outpaced third Sales customer both accelerated double-digit the approximately platforms fourth quarter, and for growth the our X% During and

sales from Over the years, XXX%. our grown over past have digital platforms X

of feel resonating #X on stores improvement, interconnected a look our forward our is online serving selling orders retailer customers fulfilled our were We spring the frictionless, and position home through about to customers XX% the with our shopping we fiscal for focus experience as in XXXX. delivering in our approximately as Our great busy season.

well also I to to as their incredible want supplier Richard, for over huge in effort our to partners call and transportation as the say our hand thank XXXX. you associates a I Before all

pandemic. Over communities. chain teams supply call and mitigate faced to partners including with disruptions challenges, the to while throughout grateful I'd that, year, work cross-functional our a we these serving the on the our customers the number staying to We're and our the ongoing rising challenges for last extremely way pressures, With over focused of cost turn like Richard.

Richard McPhail

-- In of Thank Ted, everyone. last increase good you, from or morning, billion, year. XX.X% and an sales were $X.X total fourth $XX.X the XX% approximately billion quarter,

for comps the comps quarter of of the in X.X% in January. positive in comps X.X% positive company total were in January. and were and positive November, positive with in in for December December Comps quarter Our X% the X.X% XX.X% in November, XX.X% with X.X% X.X% U.S.

business the fourth our in U.S. geographies. positive quarter. positive quarter comps results the XX comps, by posted Canada and and All fourth Our regions in once broad-based strength again posted driven double-digit Mexico, the were and across both

a our For $XXX.X sales year, growth of XXXX. XX.X% totaled sales or the record with billion $XX fiscal billion, versus

XX.X%, comp and chain our For and last the last year, product approximately for year. from In basis gross investments margin year, driven XX.X%. margin our mix the sales network. of year, company increased comp the primarily by from was decrease points XX gross a our quarter, increased sales XX.X%, basis decrease And was fourth U.S. of in XX a supply points total approximately XX.X%,

of approximately from representing a year. approximately expenses XXX quarter, fourth of operating During sales, basis points last XX.X% decrease were the

the solid reflects fourth the of non-recurring quarter during to comparisons our we completion leverage of anniversarying related the the operating acquisition the COVID-related quarter. the quarter significant in XXXX expense XXXX, of of incurred support and Our against $XXX in the expenses HD fourth for that quarter of expenses to fourth associates, management million Supply

quarter During the COVID-related of we fiscal $XXX also of incurred fourth million expenses. XXXX, approximately

of XXX representing of basis points were approximately For decrease operating the approximately XXXX. from a year, expenses XX.X% sales, fiscal

leverage partially taken costs to XXXX in in as reflects a expense the at operating XXXX of our actions decrease well offset as Our end XXXX. year, by fiscal last throughout compared COVID-related wage

operating for in to which year intend level Our our investment a we the included continue. business, expenses consistent of

For pleased we the year, with leverage able were to very deliver. operating are expense the we

approximately year. our for tax was for was other Interest fourth was fiscal the the Our year with quarter, the was XX.X% In the operating approximately was effective XXXX for XX.X% quarter fourth rate flat XX.X%. essentially and for quarter and last and fourth XX.X%. margin expense

earnings share for per fourth XX.X% quarter of the to fiscal increase $X.XX, Diluted increase for $XX.XX, XXXX XXXX. share compared diluted an were earnings were of fiscal an XXXX. per the compared Our fourth to XX.X% quarter of

XX the store count the During the footage of stores square XXX selling at was of per X from a fiscal an from same the fiscal acquisition, $X.X in in XXXX. inventory year. last Total to fiscal year, $XXX $XX.X retail year. stores company's square sales the were we foot were our Retail through XXXX, bringing end versus X.Xx X,XXX merchandise at feet XXXX. were history. increase end last our and new At small end of down highest square million period X.Xx, the opened turns added billion, approximately inventories of new billion And the approximately quarter,

capital allocation. on to Moving

we total the This fiscal million $XXX billion. brings capital our invested quarter, XXXX fourth form the $X.X of approximately into During in back to business capital expenditures. for expenditures

approximately XX of we fourth $X.XX. We billion in Directors XX.X% XXXX, was to and look dividend $X.XX $X the share today, form beginning XX% including every we return share, quarter. equates our shareholders to our trailing And earnings. during the increased long-term shareholders. average our grow $X.X our quarterly in months, and which on repurchases, on to Board to year XXXX. of dividends as ending the billion billion for up invested annual approximately our we finally, paid of the debt fourth of dividend capital $XX of returned to we year, announced grow quarter fiscal equity the During XX.X%, an And by the in dividend fiscal from of per Computed

be as of continues sale and aggregate Now or I'll $X.X XXXX. homes The On price healthy. home tell for improvement improvement. continued and of supportive our quarter to in Demand trillion home approximately for XXXX. sizes homeowners' customers first all comment for home of inventory the environment remains to projects for demand since continue is resulting continues sheets to strengthen grew to near balance housing of age, U.S. the stock The value appreciation. XX% support available the for continues average, be equity housing on existing home us strong, broader lows, home record outlook

spending the improvement, While we the and remains and for demand consumer chain inflation, home we've the how year. supply broader dynamics impact resilient through consistent of with respect uncertainty to by evolve encouraged will seen are

challenging. Given these fundamentals remains XXXX year full macroeconomic guidance based factors on establishing

a last for rate run X our in the shifts run growth demand we demand, on outlook XXXX guidance will calculate fiscal over Based dollar our our observed seasonality this quarters. sales historical calculate assuming result, have based that dollar positive comp there XXXX. of this adjust rate As is are the sales on we material slightly growth We for be for sales and XXXX. fiscal approach no and to

We our earnings XXXX. margin be percentage flat we to And per fiscal operating would XXXX diluted expect to share compared in to low growth XXXX. expect single-digit

have agility ourselves we have model. needs in into our of approximately form X% course that investments invest meet approximately of enabled of with to we've XXXX, sales our expenditures, $X capital results. by positioned expectation believe evidenced line annual in plan fiscal our billion environment the in the Over operating made forward. of in any of to customers business in The our as we the back our our We going business

leverage strengthen to our customers, I'll we faster value. low-cost As forward, to deliver than back Craig. with position will market shareholder look and invest growth scale the position to hand our we that, With to it drive our continue and

Craig Menear

next few will has me over our Richard are on a Ted The Thank the let on of team Depot, have you, of In excited phase congratulate the share and Home an moments, been never ahead what's year the more growth a past team talking for about exceptional next spent the Richard. again, and their lot I And us. leadership The about that time of opportunities for thoughts company. year.

our in home While our business, change deliver best and consistent: extend customer the low-cost priorities improvement in provider experience strategic position. is our remain constant

proposition make deliver are in we our value capabilities deliver And shareholder Our will the in the grow to and value differentiated will opportunity Ted share business unchanged. investments objectives we to a unlock unique as made the industry. exceptional detail, have and throughout is believe continue market to that also will

opportunity well on our in to are leverage space. to distinct competitive advantages compelling positioned growth capitalize We a our

We the world-class team new and a vision leadership guide experience to have company who heights. our have to

associates our of that a instilled commitment demonstrated operating it in greatest have customers of and over about business to ago. days an have are unwavering to team a We XXX,XXX honor the believe will associates XXXX XX us. years who that for Home of the ahead beyond. regardless to approximately our bit who These the and committed to exceptional our founders culture Depot call are share my strategic I And turn Ted, for The over the environment. more priorities our is execution

Ted Decker

Craig. you, Thank

take throughout a moment sincere done your XX-year express that you this company for for me Let all my appreciation to have career.

a values guide a ensuring You're culture, as leadership every our we our steward team. of tremendous decision make

You led and through for a us transformational us well future. positioned period the

behalf on is other. I an you. any thank unlike that all Depot of So our associates, organization Home believe

about seen great to Arthur growth in I'd operational maintain and talking for is spirit to years company. We've inflection power improvement Our focus success why by future, Bernie customer is our entrepreneurial The retailer home history, some are orange-blooded #X improvement. our home a by next spend mentality excellence. This desire the the and revolutionized created we the company's and industry the when time points associates, driven spurred unique they Depot several XX Home what's ago. culture, like the this over of by and for all

have growth building to adapt inflection growth pivoted Over driven capabilities years market Years a conditions changing to of to productivity. the XX to points new years, by Approximately and as customer used began driver home interconnected we journey. later, from these ago, better Customer enable expectations we stores for a is expectations. any a shopping experience to in to we through experience tolerance best focused the years, approach In approach. shopping an evolve, friction there improvement. shopping end-to-end and continue on deliver multichannel the in little customer-back recent we

the So we will of customer. ahead continue to adapt to stay

end growth tremendous decade. a growth, the more to of I'm context business. the We the seen in this to With total than the help we turn addressable the goals our of of for going growth it have past since in opportunity milestones our the who XXXX. have billion are We $XX and never could amount new briefly frame reimagining through will over Richard, talk predicted market. within

Richard McPhail

Ted. Thanks,

grow achieve and what represents return improvement, just the provide shareholders. in winning best-in-class goals on Our investor invested the these $XXX and grow approximately capital. the to value is growth provider we the as best our customers, be market home these profit billion for importantly, in deliver our first, are where from with today; low-cost of through We dollar Aligned are our second, objectives to believe we home in of confident that and are: which exceptional efficient $XX to objectives, we formula unchanged. goals operating position as will associates most share business incremental our shareholder our deliver and are the extend billion to We and sales, improvement. capital experience and intend growth

America market total in billion. grown North greater is our Over that billion market We addressable by the sales, also $XXX years, last X our we've grown. estimate now as over addressable in has $XX than

allow in to we invested meaningfully opportunities each XX% We groups could which competitive past, address the these opportunities improve our and and of growth in estimate pursue consumers both Pros. have capabilities represent provides customer of positioning us respective that significant market. the addressable that total with about not We

important sales. We also of XX% of these customer estimate each total approximately groups our that represent

market, MRO to end market addressable For this space, we end operations, Within billion. over is Pro, $XXX $XXX believe we addressable maintenance, over this repair billion. and or expanded our believe has

capital a total home growth X to the are of part large relatively while primary significantly is addressable and geographies, in years. will represent business objectives, expanded we and improvement a consistent our Investing our allocation has So learned small market that allocation unchanged. a the retailer across remain we also invest we approach the support all have To agile past to in our fragmented and over critical capital we priority, a way. that have is that more straightforward #X of it

to excess real giving it shareholders and time, more has healthy move see ability the to us more approach results. share we investing to paying cadence pivot positive our After cash making business, investment dividend when in intent a of a balanced to Our return through become is faster us the allowing repurchases. quickly,

is to fine-tune leadership environment us our in continue create our compelling, serve our opportunity will position. we to customers, continue and better front capabilities to is do scale more extend assets our strategies in will to supportive, optimize for way. leverage The as our more what we believe new processes and macroeconomic as of While stakeholders. go-to-market value allocation creating capital there we to refine We disruptive intend we unmatched our compete are is and the to a principles

Ted Decker

Richard. Thanks,

powerful We distinct and a foundation competitive have advantages.

First, as well as our associates unique mentioned competitive remain our I culture earlier, as a differentiator. knowledgeable and will values

of retail. Second, in and our hub always be our business of are future the stores important will improvement the home

have convenience provides that footprint We a premier real customer. for estate the

the relevant supply and have and for the have to believe we driving ability physical environment. blend Third, our we Fourth, products and with And their consistently and the have brands marketplace. finally, are customers any interconnected as experience agility digital best-in-class shopping continuously in chain innovation we increasingly a have we navigate worlds operate demonstrated projects. our and improved most

continue experience best invest for customers. ensure to and the strengthen advantages our We to these

from the work more made is customer important strides removing to there While we've experience. do, in friction

earning made of Let me share give how of wallet the more across you the with examples real investments are customers. business us we've our

increased Dallas relationship Representative, their with large-scale Account to our Pro purchases, our signed they and need Years example one time, our largely of in for the or in shop this a repair/remodeler spend deepen of out stores PAR, convenience. of Pro immediate market. Let's them. their the unplanned us dedicated with ago, take customers in-store primarily were Over

occasionally fulfillment The us and of purchases customer the us often saw more now customer need our improved utilize mostly of engaged certain capabilities. but of us joined centres. they still app. loyalty year, centers, new authenticated across spend number their for for We this They took job to downloaded distribution began from in with including Depot Last with pricing new and/or orders program interconnected $XXX,XXX this one this personalized website. mobile increased. this than on annually customer At our As via And Pro Home today, with we grow and forward the point, our we products. to more site several mobile delivery. store. used offering Their experience, Fast their deliveries new immediate flatbed unplanned invested our our first BXB

result, we’ve this seen more a over As customer triple with $XXX,XXX spend than annually. to

with is spend they this in see one example, While build confidence capabilities. customers increase us we that as our

as growth is of driver Pro serving customer immediate-need forward, We While their believe important the we are we is an beginning equally satisfy removing Pros' of unplanned ability continue billion believe now we a serve purchase from this and work purchase important important. planned an towards friction to DIY purchases, occasions customer sales the be important planned unplanned milestone. occasions. for will while driver And capabilities going our $XXX growth to our

completing wasn't results and associated website as on experience more Let's on ago, relied as shopping tackling mobile her recommendations project. today. engagement Geena's example The weren't and our X digital ago intuitive, call take applications search a for bathroom were the X years difficult. she the experience would same is helping customer of have with limited. a that years DIY customer remodel heavily we'll relevant, a stores Geena, our a little compare and

needed. Geena's up As to know made she to multiple essentially a when didn’t she the go store, the items or buy for trips result, was pick store, she in online the store did BOPUS, And likely different met collecting only whatever project would is option her the required. her less a and tools traditional be Today, experience lot cash-and-carry meaningfully as with journey of friction. materials for shopping outside model

her project online, begins with provide her in Geena search As improvements relevant more results.

her can better understanding these project. of product recommendations her know And intent shopping have we journey also a whole matter. supporting We of the make relevant recommendations and

her pickup. a can updated our order or aisles. grab seen locker the car increase throughout her our improved Over chooses product multiple items to receive associates as service she for also years, a the by Geena our brought improve those And knowledgeable easily items there stores, We've we've to thousands delivery in has the from navigate always, her and made items. Geena Geena recently mobile are desk, to investments significant more same- options. experience. If an the sales app When last up front our pick pickup at recommendations. on place next-day her to project. comes in or X help help store, to online have of can Geena end curbside signage her fulfillment driven them She in with checkout

spend shopping We experience, result and have of more increase customers fulfillment and like as robust improved greater Home Geena their seen journey with options. in-store Depot personalized and The our a delivery online

experience. we We operational also building are and flywheel ecosystem journey. of traditional are deliver remove truly at The the an a to step channel mindset of every shopping interconnected capabilities efficiencies our shifting working seamless friction customer to to mindset together beyond retail's goes

centers we expand the building not our is chain example, well store reliable while as and new lies enable in as value buildings to faster network believe assortment and transformational, and the more offer the experience. improved we just fulfillment customer connection themselves. ecosystem us overall The their The in about depth delivery to are fulfillment inventory options. the it's For supply

fulfillment associates In additional to removed experience addition, help shopping up placed in-store historically freeing stores, better facilities on pressures sales. and these new some a creating drive

intention build improvement an goods. network to Our is for delivery home unrivaled

develop measurable early our as we in to lift with While a sales days, and capabilities, see interconnected more a we shopping are we experience. encouraged continue

over focused on XXXX. of by foot making tremendous remain I Enabled the Home long-standing productivity, making about focused which move amount productivity also per of we $XXX in efficient achieve square in improvement. When think we of towards of our best driving processes next us unnecessary Depot. shopping tasks our home this we more experience technology, hallmark phase growth, about in the eliminating and are think while all As The our retail years, sales forward a will over helped the I stores, on

our in on solely opportunities When founders transformed productivity. we goal have our The many throughout don't drive further and of the in started our many flow The sales, industry. an they we sights As optimization opportunities improve in across to Home business. years freight productivity the see store our initiatives stores, over set space $XXX Depot ago, billion reside SKU we XX

next are ecosystem opportunity share. to that We continuing business so We legacy we is new interconnected interconnected increase questions. doing And traditional exciting intend of Depot. strategies. but honored an the lead and in of today The we Christine, building models we now Thank opened doors, in that as for will are way. it to am company the when Home interest first believe you with us your capture for help our go-to-market growth. in The are was ability We this into our to I front ready phase disrupt

Operator

Stanley. line Morgan Gutman the first from Simeon with of comes [Operator Instructions] question Our

Simeon Gutman

the and Craig on first -- the congratulations is transition. question on the Ted, question first My is sales. for outlook

that to is are you would rate that ends volumes roughly or suggest level Can guiding what conservative tell right that seeing to the being of I the just So interest more do comps mentioned rate last means but increases? this X you around Richard's flat slightly you're housing if flat? metric? X%, year. or the approach the quarters a component your units if and is guidance think into comment of assumption that this any positive up are to that for interest housing assume around on-the-run were type anchoring some And heard then it, the we around opposed you of as in to there business, you're us inflation

Ted Decker

assumption inflation, comment around quarters we've of in is seen kind what how on let me comes clarify approach establish the don't point, our that our way. put business with -- X our just neutral. inflation marketplace the going whatever we The our outlook, over last And that's a that. deal forward. We point on Simeon, the we forward. or embedded in together deflation We're plan from as we

inflation 'XX. will. And It's in built in So with today. deal the us comes there what there is you no if we'll in, then business at what's

Craig Menear

to your then about just to think go I can we questions unit. back macro talk and

macro are in as the dynamics we a of side, said, look, environment lot there the right On now.

it's And the set last saw and guidance of to any on consistency that That's XXXX, us X those we being why, rest difficult stability we a assumptions. on numbers to 'XX. actually level so extrapolate quarters look at when some in of macroeconomic gave given to able of confidence

of it's So current more is really it patterns exercise based macroeconomics. than demand math on a

Ted environment supportive demand. Now in is of that the context. improvement housing give we know home And color can maybe some on unit

Ted Decker

Yes.

seeing XXXX, So demand basis negative units been improved X-year coming have side off really in we have that transactions in they the incredible a saw over we're and on what year on but in QX QX. units storm in go. a not on what a and in of shelves, dissimilar environment, they the transactions Simeon. receive think it's categories. Pro-oriented It's When our particularly as goods and matter to is we -- get them of And we

the to restock we're While our chain plenty continues we lot seeing upside there's of still shelves. substitution, as a supply think of

Simeon Gutman

it. Got

Not Is a MRO, of that's Pro get the my the number, you Okay. to profit actually who And best-in-class markets or is but the letter trying margin-dilutive? growth. it anything end operating And to the is about mentioned, follow-up that dollar there then sector-relative is cute it? retail?

Richard McPhail

different but opportunities in have deliver we It's many which market. share that And No. addressable thing, I'd is -- exceptional capital. say it the $XXX have ability terms profiles, to I'd of our I’ll think one billion-plus of we our sector, on say return

push. what looking And we're so that's to

Craig Menear

business have historically, we at look that you shop the when Pros Simeon, store. And our across

itself of for total, within But to profile business. Certainly, and have like is variation very in in similar. masons our example, margin business, relatively trades, DIY Pro versus painters. Our a you specific it's common

Operator

comes line Lasser question of from UBS. the with next Our Michael

Michael Lasser

congrats. Ted, and Craig

Ted Decker

Thanks.

Michael Lasser

but forgot to embarrassing, little that A you $XXX to include expect year the you to get billion.

So just into quick, that would that be great. get if real you could

Richard McPhail

a in get We we've in of billion $XXX soon goal can established as Michael, sustainable intend So and sales. there we profitable way. to a as

Michael Lasser

moving expect time X% you signaled rate formal in you X.X% that to long-term the higher, the to last be you provided had a growth Would towards, outlook?

Richard McPhail

lot market our dynamics to to we any are we but now, There is confident every a ability in -- are grow our in share period. of environment. intend market what right in And share every take in

Ted Decker

remarks, continue believe we the market. and as way this share team as in $XXX-odd most share, market and of would we've getting investors, huge the It's set $XXX is market, chatted about time on sights then on larger the that billion also And that Richard We've demonstrated growth we very we'll billion, goal importantly, growing. market we that And growth is a growth. think of in the think base components, That to have it's specific that a retail. we that phase $XXX $XXX we about prepared about track take a next our And operate obviously, the Michael, at we've in working over market. as we're take we perhaps having passed to described, with into able clearly been that our is that for So without billion. a we interconnected think in billion. healthy level obviously, it and experience developing best

But maintenance, we relevant both when take you with customers. we to increase in the our Pro Pro with experience, to artifact flow, specific our So seeing share this team And we're we're We're you in with X-Eleven Pro for certainly in to building the Pro the think building every that overhead now. our and gain share money environment in different product expanded just we we're purchases. value, the example even accelerate the their the purchase. for in building Dallas, something MRO Supply, freight is shopping think on-shelf HD on-shelf table Pros, our convenience, that that gain get we Geena, sort growth, with particularly leave being of Pro Pros. we What brands. We've store: by tremendous the time and all we're to Pro of all supply seamless, completely billion operating to the of about are ecosystem storm-esque about always the on revolutionary and our have think building consumers planned stock. that build interconnected that availability, planned hallmark productivity We've activities talked the now in Add what is wrap and as chain we'll building. of But acquisition about if in this and better consumer you shelf a is then more availability, out. Pros, productivity, space, talked we capabilities John right the every know to now and $XXX of share we're

next that's a framework of how $XX of about So of sort billion think we that broad-brush growth.

Michael Lasser

would for follow-up margin single that line sales your since Understood. be operating to year. up margin call digits, year to if single operating it, And sales business? for on outlook the respect low my And to you still digits, in a in low is How with this you you bottom If your upside/downside frame your would this flat down, would reinvest look are the let flow have the question do the Or operating margin? scenario? back can your that you that through up? are

Richard McPhail

thank Michael. Well, you,

a of focus, clear do We operating growth. adjustments our as are we're profit dollar to First, we so degree to our fit. drive model, in we able see and on financial maintain make flexibility which is

take. around would important action management as dynamic do flexibility an have But as in to it's environment the we understand financial what I in might model. to we have to that that this, what say circumstances make a of -- we we think the degree decision

delivering history intend grows, as expense have operating and do we that. We volume to of a leverage

Operator

Our comes JPMorgan. next from with line Chris of the question Horvers

Chris Horver

sort Are you the in year. units increases? any those consumer? flat. commentary? Really And assuming a retirement issues job. passed this taking bit have price the about on Can you of seen those little of price further new on and, their vendors everybody exciting. talk your Ted, actual inflation elasticity you to Some to coming you've have as new Congratulations increases roughly They're through announced your

Ted Decker

would your just XXX about Yes, can X/X say double-digit are Clearly, cost. called points Chris, on new. commodity it's moment. out, I we If that with Ted, is I taking about which increase and X/X that AUR, for price, includes hit mix in AUR for of basis thanks comment. a we and the

the to innovative innovation products to willingness that tremendous product. with to and continue customers' We see more the trade up

if drive X/X. And more about So last was continues it to you recall, may quarter, XX-XX. that

for and X/X when scale the inflationary best including offer any don't component priced assume the on cost, Craig said, working the and any say with again, We're same inflation equation, commodity that end-to-end be that deal matters. our the inflation we're be we're are merchants But should with discussions we team to Well, end and would doing we customers' year, we value. Jeff inflation, think day. forecasting cost end-to-end any forecast And for this way incremental this priced to we able neutrality. start advocate And same value our in the inflation plan. increased and in working just the the we I goods. take we quarter. and year not in as we're So cost past where as the year, a being in We where value this every We value further inflation. the environment, are environment. player, obviously our suppliers we in to we chain. constant don't end have

Chris Horvers

trade high. down, you substitution haven't very And the seen has and consumer been

Ted Decker

yes. -- So

carefully. watch categories, on has So very every curve, for product merchants which and category -- elasticity elasticity your different the question, every but by sure, it's its product

a extraordinary prices. in we with falloff quick we also As highs saw last falloff, lumber for we lumber year, in when saw dramatic hit part of a very called and those the out in unit example, QX lumber, then early productivity

lumber. product have are merchants say starting But about have right way curve, it prices on when I driving all volume imbalances. supply-related elasticity through pressure elasticity will this of category. again, kidding But we that, rate. our see per for for managing appropriately. price As the always we but could lumber not sure, some over And we are And we wired. -- as we're Chris, every mean We're to about the lot it quarter, supply a recovered ourselves there's tougher unit That's that we're unit completely curve I'd well. is get unit to it's volume.

Chris Horvers

a fourth was question my that, pressure the operating line. in lot margin given it. of follow-up the margin costs think expense and I chain there is, on the up mean about And the fulfillment, outlook just the you that think fourth the gross comes out into supply quarter anything that then would unique on and margin? gross in build And in gross Got you're on as next the opportunity would year, quarter pulling continued

Richard McPhail

Right, Chris.

QX That pressure year, Supply for from XXXX, story a the build-out was the we've of as So sort this few out timing a rebate One gross we Chain it for of years. continue every in margin, as quarter had building There -- really pressure of was continue. year-over-year. on will One Chain Supply

we're And so the thinking that's of sort about way freight.

Ted Decker

I also I'd merchants to throughout in our coming necessarily transportation costs cost, covered that don't of an cost from They're say, the which supply a both chain And most did the think need initial effectively portfolio, of differentiate the XXXX. in Chris, where good. that be is we in pressure

Richard McPhail

Supply a slight in XXXX a and investment Chain's products whole, a sold from pressure One As mix story. was of

Operator

with question line Our of Grom Haskett. Chuck comes the next from Gordon

Chuck Grom

year. was Pro curious great on I a on levels. Congrats backlog

an If curious of the us light front. spending cohorts some of you're end in in that And any patterns and you noticeable by update income stimulus these also could then just was pressures if in January? on inflationary seeing give changes of

Craig Menear

simple is from We got I get that know hear to for myself, my work can handle. hear we do over than it customers took they've out around all they somebody just the our a while house. more projects Everything Pro to country.

Pro healthy. backlog is the so business And

Richard McPhail

comment that as of take you storm-like environment. macro higher. is a this across third-party more And index a the of when sort really remodelers, it's level, at been said, the have And to Ted numbers external business. When elasticity surveys look never you

conditions. that of all So points to healthy

Craig Menear

your Wouldn't that question, seen we've say, to changes.

it now haven't Ted like said, hard We customer it's in a storm this you a And again, I shifts seen right mean any patterns. little product, get as goes. environment. dramatic the is because almost

have hard pretty to see so any changed that And patterns much.

Chuck Grom

a dig productivity if helpful. efforts. And deeper wondering in then just That's space you guys Okay. picture, bit of the I little bigger and optimization SKU terms was

a you color Just maybe per that more gain $XXX off the on just store in where little can foot. square improvement you bit sales think in

Ted Decker

largely are depth our where and than drive GSR mentioned year. right, space we quarter macro over we what allocation last initiative, to and is the inventory prepared -- do. facings we call tested in volume this about getting the remarks Well, stores we that a more get the And

continue be that a will store $XXX initiative. this And year. thrilled give of can and Jeff, you're hundred that's we say, with our several you did stores continue more will year, foot. some be As that We XXXX. color what do we'll of investment square And largest last that in maybe hundreds to stores you seeing.

Jeff Kinnaird

learning lack opportunity of terms in a the Not is for that highest-volume we're and productivity. tremendous every better to Yes. of well amount Ted. have stores GSR addressing sales to improving square foot addressing per It's X-foot we're our a we Thank of working space all you, us. bay, in gaining for stores. exceptionally we're mention, taking back term,

very product alongside So then we opportunity look process, an enormous line again, at review to inside continue productivity do we on drive manage GSR. stores. of that, to every year, long-standing more programs hundreds And of where a our

Operator

question line with next Ciccarelli of Scot from the comes Truist. Our

Scot Ciccarelli

I that in hoping you little regarding might increase bit a provide discussed. was be more color to able the just you TAM

sizable will? let's I it, MRO big expansion already where was that market increase Depot Home competitive. stuff markets of last much if you of Versus a penetration kind call market, from component newer I think existing kind from wondering much it's just how as a of time. pretty newer highly the I'm is, with how guess And like is, what of is

Richard McPhail

Sure, Scot.

you order than a different maybe in So asked.

which market has competed So in we've last years. first X over in base exceptional of always all, the been growth the

third-party if consulting vendors. the at census at of you data. you looking if have our that U.S., looking triangulation. at look art see -- look market at expanded. can We're in an Canada, And at if triangulate this Mexico, and We're markets so you you data. We're if measuring you it look is those asking kind And

a that sets, exceptional see those we that, Mexican And including at are confidence third-party high the all a good for really you of our within that have and and our in just we we look on numbers definition. time, to first It's data you growth. exist degree perspective We notable businesses Canadian have again, the it. triangulate add

exception positioned market billion business, $XXX don't So with MRO, opportunities per new plus to opportunity. gotten opportunities. of There smarter the we've which is the acquisition definition understanding We of And new really include American market. North about mentioned our the aren't better of of addressable really us you grow the se, to -- a we've gotten in. HD Supply, market smarter it, sort of led opportunities that we that as as resize about became share even with

building So has is impressive. the the But backdrop growth years been X are the for continued past growth The encouraging. those blocks. over also macro really

Operator

Our next Michael Baker of Davidson. with line question the comes from D.A.

Michael Baker

color date. some quarter questions. shorter-term-type I'll in one, But on to ask trends sort you've the of a few current past, given

your question are that's including I what buybacks? said share you X for -- I particularly ago. XXXX, important X the stimulus then sorry, parts. you I year cycle guidance think that, maybe think missed it. unless we for now a Within don't from in And up as against

Richard McPhail

X difficult compares Thank off quarter, March April. in you. start weeks Well, up year got and we strong the begins. is It are more as a we've of and the to a XX-week coming year into the

share respect do year. with intend to there. to it's of And and to important conclusions repurchases through that timing again and this year, continue any share dividends half our -- respect excess cash a start. early is first off we'll share With So we're obviously, return draw repurchases, to you the would shareholders the repurchases, Ted, sorry, and -- spring to we of to but strong for to

program. We billion $X.X our current have share remaining in authorization

Michael Baker

have Is I the in your fair buyback you that, -- So I that relative is full mean the a number on guess to must you've fair plan. the past, a authorization? In that. follow-up it EPS say provided includes that, to it

Richard McPhail

you rest intent degree some sheet that position. of But we return to flexibility the to liquidity maintain cash excess hold to on the and our assured cash balance like can in our We shareholders. it's that

Michael Baker

Yes.

that? I a as ask think to as know could you counts of here. if a too hour my -- But and for when talk of is an -- you about long in way, -- is One Understood. follow-up, That's more, more getting Or pricing close a competing terms question this disruptive think follow-up. of your are anything Okay. if change that it I but is don't -- than more than in that maybe bigger signaling we sometimes strategy? price? not I just a in that

Ted Decker

a at is not It's comment. the our capability No. We're in changing The disruption all. we building. approach pricing ecosystem promotional are or

We retailer. improvement been, XX home have -- the are years, #X

physical can of of the We that building customers as the are think built pickup, digital be can we be between that nature be be cash delivery, that our in and carry. installation, continue interconnected -- frictionless have are That can been disruptive and in worlds. weave experiences the frictionless, that can will and essence build to them

disruptive because we our aim As to frictionless level think of more purchase. that we ecosystem, Pro is frictionless that is disruptive of the build experience. our perhaps is then And next build itself pursuit the of planned in

flooring larger expand have are depth Depot Pros. X-Eleven. representative, and the Home all And term used The to We've But the jobs lot just on example pricing, always might what quantity. delivery, Pros, a talked lots buildings. When is foreign I was is there a with about for appropriate us Pro I of As We that about that them store. redefinition last of purchase, mentioned a we the X-odd job have more going confidence Certainly, inventory, an can said, that this, with use worth planned being minute. Pros we're a smaller if job, in that we seeing we breadth the having a had we're of that sales I we I their store. project And the Pros share what in think reliable store, that build think real we've disruption. as be in of I a in thought for our a always of quarter, use seeing believe the job opportunity wallet to with

X,XXX So job feet. might average square an be

is. different what centers, So in X,XXX of square might out stock we'd to particular we flatbed a quantity in in seeing the have store going swing. have distribution think of completely and time orders feet at doors, job square SKU. any if doors What millwork, We X,XXX you we're widths, jobs. X feet, lot Recently, of any satisfy redefining interior XX right- the one have left-hand of

XXX This Just their with doors our are our delivering Pro we redefining completely fulfillment of door of capability the this orders planned is for of week, counts purchase. out FDCs.

disruptive. what that's So mean we by

Operator

Citi. question next line Steven Zaccone with of the from Our comes

Steven Zaccone

role. Craig, next the career. best for the wishes new Ted, in step congrats your on

Craig Menear

you. Thank

Steven Zaccone

had EBIT business. prior that points back to level to of margin operating gross you question the The the gross business a structurally? focus on has margin I outlook the over peak been years. is roughly somewhat on the is margin changed margin margin but think growth, of the hindrance gross business. XXX understand has in basis for operating below business I get Do dollar a the past Or X the something in could time?

Richard McPhail

Nothing Nothing. structurally. changed has

a in opportunities lot But let's the market. We -- plenty to just our us provider with provides That about have of talk to be will opportunities and let's in low-cost margins. after of been ways. continue operating go

sales. operating are goal growth a operating driving but of we in watch and dollar profit we going and all, just We're importantly, billion returns our today growth to So going deliver said set to focus. $XXX first best-in-class dollar we're ROIC. margin, as of But to

operating is of So margin gross a Operating margin of and margin leverage function growth. function we operating it's things: function down. a can break question a the expense of X dollar

on operating driven leverage. operating operating margin by primarily delivered expense expansion, first, we've So leverage. expense Historically,

creation deliver higher than operating proud that value dollar average, We we outsized Gross of. of but take driven throughout we're expense with continue, company rate drive share to growth a will we're be gains function opportunities company our volume. the and margin and created committed we've share margin in profit average levering gross to our expect history, And categories shareholder that this and we've lower relationship to always growth than dollar gains.

is appliances Ted, want great can talk you maybe So a example. -- And you'd to that. about

Ted Decker

been for -- profile. since gross all the business want what to dollars I be appliances some and we a initially what order. was in type in we've didn't was time, a we because in realized it's it of Yes. a built, is mean thought was but the it it's business low-margin we've of margin the the special virtual But we sense, of inventory volume a with particularly delivered business

on For sure, margin and that the we've dollar than profit billion we it's of something is it a dollars delivered appliance the dollar return investment but our is we're built average, highest. ultimately growth much into. sort of leaned lower And operating double-digit thrilled a rate gross the as one our business

Richard McPhail

to we if have continue opportunities share do to going And and we're so capital returns, take strong drive to that.

Steven Zaccone

right expectation it What's now. we the A on move of supply any your environment. the as at chain you Maybe Do see context. external through talk situation year? helpful the very just through That's we supply as about XXXX? Great. status follow-up for improving point the chain the just get environment

John Deaton

Yes. is Deaton. This John

persist supply the We we in constraints have chain but the to believe some likely near on seen are the improvement, industry term.

usual of to we're bit been planned but in at seen sure this the and that proactive Specifically, we've earlier a little of for for make ports, business. easing pressure ready landing than we've product have our

Operator

question from line the comes Evercore Our ISI. next Greg Melich with of

Greg Scott

up I congrats. make ticket inflation, got over was way? that I fourth the this years. right inflation, -- for of XX% XXX the help Is Craig, the -- in sure Ted, all to the I thanks And X/X Again, around was am that on The quarter, want about thinking bps. that right. If

Ted Decker

Yes.

Greg Scott

Got it.

rate. about this about of when for come the full kind we're starting down the guidance And presumably, the then over would in year course it's might it at mid-single as And -- year your and digits be so the guidance. we for year basically of level and talk we the think of inflation, run that

Craig Menear

goes. where know don't it We

in built rate. was established planned based outlook that that adjustment, up provided. we rate in guidance on that no the And have run down, our we we presume or as So the

think guidance. So as neutral time the in that words, from the plan inflation -- in of we other we point established

Greg Scott

Okay.

the from levels, year, by So in same, on presumably have could rate inventories? -- at the the the price quarter. stay bps stays but looking at by inflation quarters, have these you it is just level that XXX the If is first the the if end then X positive. of basically of today, year-on-year up the that we But and we'll fourth

Richard McPhail

That's AUR. That's an was That about XXXX. right. -- that you're reflected 'XX it of correct, your way There in is is taken is the thinking and fair. in anniversarying

Greg Scott

Got it.

we're there? is now costs took about what and XXXX all expenses, as costs maybe unusual actions so wage the Or And on we you line, then through base operating could necessarily would -- the on transition -- Richard, this things the maybe that you the think about year? modeling us and even COVID reasonable are think cadence not thinking top help that if as you year, understand given about a but be out

Richard McPhail

base a you excited X XXXX growth that still amount the included in tell $XX I years would particularly expense. are we, growth. quarter, of significant beyond over having that I would include, years, unprecedented after COVID we grown of really that see X XXXX fourth cost. say COVID billion after did

COVID outlook. our of in has spike, come do that was We the include down. January XXXX some real still a expense and Just month alone

And could I future. so we're through least, expenses into what going completely nonrecurring be, would say at not the hopefully,

bit XXXX. is So little that there a in of

Greg Scott

wage for there see are additional actions? any about do people any the rising you tightness I seen And and it. feel there. Got the How spring? peak do getting horizon? we've mean labor on you wage actions costs And

Craig Menear

our we're do capabilities Greg, looking people We're and able for to mean, Depot. that. we've XXX,XXX to been -- to attracting indicated, around all as The folks out We've our we're the spring. going messaging of to utilize I Home hire

always pressure that but we're front, We so this has done. Depot. On not We that going the we're look attract action can our sure at in doing every folks certainly make market, Home the There's thing that the at past, to there. marketplace by same different month. the competitive market changed. in more we're approach than look and wage single we've Nothing's we into seen more and we've The

Ted Decker

the on Greg, hiring XXX,XXX good meaningfully. I news the are applications are up people think

hiring So we spring feel good about that cohort.

Operator

line with comes question Peter Baird. from next Our of Benedict the

Peter Benedict

Congrats, too, Craig, Ted.

Craig Menear

you. Thank

Peter Benedict

first inventory. is on My is inventory. question My question on

you As XX%. XX% less a up sit little sales here, levels, XXXX it's little a up than more than over

of and is earlier right gap know was your the level inventory we as product through 'XX? move comment thinking how about Just you that about -- what are I landing there a earlier.

situation, see just the inventory So maybe us talk right now kind the and the of year. that you through you where sit through flowing how

Craig Menear

of couple makeup of our of Peter, I about comments. the good feel mean, inventory. a first we all,

year. As make early to ready that spring. That's our we're for of sure John are in said, busiest to goods working we the bring time

important delivered was X.X. think back an step X.X thing look to I turn ran turns. at and which is That level we pre-pandemic higher than levels,

where build of call we we're to in have like continue goods year a many year's really storm-like to level chain the scenario as place. we the demand And of off it was what sell. find of portion -- good team have inventory, been And out in on is. feel goods working high in still of inventory as relates here, the The inventory it's we merchants didn't then to more we we actually X.X been we get, have. the the we're in categories, a level good the finally, environment. a to crazy have and supply to productivity more just a that the the wanted referenced Last that a So for about

billion $X inventory same of kind at time, about all. not the At productivity. watching we're So concerned build the the we're at

Peter Benedict

a my standpoint. below, bit Okay. average. That's question a mentioned to guess, helpful. next on And is Flooring then category the was I company I little guess

there's is within curious tone a change? Or seeing. Just that category material overall not you're like if anything that going an or on from what just really

Jeff Kinnaird

categories it's are Jeff We a our The business. quarter happy in Peter, hard surface exceptionally Kinnaird. with great had strong. We're flooring.

business. thrilled new brand deployed. just -- of Very got at the vinyl with leveraging capabilities and And with tile to that flooring, chain If on larger our flooring top we Ted you happy the we've that, private electrified we're tile. with look strategy business, LifeProof supply spoke format

Operator

of question Forbes Our comes with Steve from line next the Guggenheim.

Steve Forbes

build. Congrats all around. I wanted to focus the expense on XXXX

remind weight trended with plan? maybe you So -- terms Can the in as we business Success call think to how XXXX? start that year, as Sharing on compensation XXXX look of for right us for there program relative during is to to the Richard. whole to we anything out And then out about incentive the

Richard McPhail

Success Sharing our We're in do We that paid proud that we bonus normalizing levels impressive of amazing to XXXX. associates. see

us dynamic margin keep a allowing the of slightly flat to that's positive environment. So operating part in sales

Steve Forbes

And for longer then thinking Richard. follow-up, a maybe Ted so or term, just

should thoughts on approach of thinking is? spending. certain spending? sort sounds maybe planning that percentage -- level be update level implications for it case the about on of think to indicating about how spend we us on you just we the spending on it about more should a constant. sort because we investment-related what could updated you're of of of be high-level investment going sort base Or investment you like how sort thoughts as of how methodology sales your is model process you the right investment your As spending of think of of normal But Any sort like any the level? Is think about

Richard McPhail

more years were didn't X XXXX, more to that significant is last investment basis invest And where a has investment the where one. we major example of X a our that steady capital perspective. plan our evergreen to saw P&L up But we sort incremental. more where We to benefit productivity that component a capital an almost we say right GSR kind a favorable last drove it a the a of capital return in I within to We think whether would XXXX and guideline approach much is within had the we're ramped be starting of intend where on that year, mean were expect we took period on I was business much and of of around but basis. We the also a We over with think grassroots and great period doing brilliant we that do reevaluation agile associates much extraordinary consistent expenditures what established in on that's during really is investment and from returns. more constant last going investment. the We a had one from sales. over but X% appropriate seeing the agile of we went. from a investments idea we when and our investment, what return the XXXX pivoted an is objectively the years, capital become just frequent,

the that's long of answer answer. adequate. The So should we think is X% be short sales

Craig Menear

of do been Yes, we And robust to we look that's reasonably we capital that make. for actually testing we part years. before roll. process that to it's we've important a scenario the note a the see in using test investments a that most And XX and better result last

Operator

Karen comes from line the Barclays. question Our next of with Short

Karen Short

questions on well, the market share. A and couple TAM on, just of

a So TAM. when when $XXX you look XX%. billion at I kind look billion on still of at then 'XX, the XX% of $XXX I'm at at And your you're share kind TAM, in XXXX, on around

would So but have apples-to-apples that. first And on not just not increased? the clarify I I'm why share the is, guess maybe question using TAM, maybe your

Richard McPhail

Well, science. this fragmented. you is imprecise We're that I is market trying sense an think is it such give a and huge a to it

entirety both billion MRO. North our of the them. America. Previously, the I we $XXX market completely billion. check think a in as We've far -- thinking Again, that not third-party pluses precision as to data. attached difficult. and of $XXX of of partners, gain, with why market $XX that view view share to ourselves billion, was measure we had And lot expanded vendor included triangulation, share trying our about apples-to-apples. the when do it's but market That's them We've of

we we market, bigger for a just I what there's have room billion-plus smaller amount than is grow a thought. about market number us. that a is understand love And we the of As tremendous $XXX share to

Karen Short

to remain then what just line about remind also, point sharp then is And if bit there's with now in helpful. respect little pre-pandemic? And I sales leverage a just sales levers your EBIT, mean some that you on basically just can your you your at on a growing to versus talk EBIT guidance think within That's point, comp have 'XX you guidance? you in Okay. can us slowdown growth with what

Richard McPhail

again, are depends scenario financial ourselves in. a where that of plenty flexibility decreasing, That's sales why sales. with find have it Well, our model. decreases circumstance on we created in variable we've we the In expense

We have reduced. expense a be degree that can of fixed

can that of we be But degree have discretionary are the have that in these reduced. levers moment. consider things of all a We to expense

as to a drive flexibility single-digit that. far expense As We able continue feel the flex financial operating we've we been confident in leverage environments. do low comp point, to have historically that to

Ted Decker

that, say but to If model having adjusts transactions, operating us your And largest you labor and hourly et you've expense drop this our cetera, before, sales is off, expense. heard Karen, units, and activity-based labor reduce model. our payroll

Richard McPhail

time real yes, it Manage as pretty well. time, real

Karen Short

Right.

Okay. And my well. Ted congratulations to Craig as and

Operator

of question from Suzuki Our of Bank the next comes America. with line Liz

Liz Suzuki

the XXXX. you ultimately an I were the get that Supply back able you Analyst strategy you One discussed on hoping Chain to what just had give Day in a update was And I at years that some could MDOs. in those the there adding COVID. I'm to sure done in was were RDCs, X FDCs, lot planned last mean of were CapEx disruption due outlook. facilities there So

that CapEx of those outlook curious Chain of some how One Supply for just include might 'XX much So investments.

Craig Menear

a Chain Yes. the Richard on CapEx. the of bit context rollout, give let I'll and comment on One then Supply I'll

supply building drive our we better an out, called to and serve is are ecosystem component customers our Ted As important the of chain productivity.

and the intent chain you parcel, for the most deliveries. transformation the reaching know, reliable or bulky and to fastest, improvement network big efficient and same- supply of was population our approximately flatbed delivery for next-day home products, XX% As build service with of

the XXXX, facilities. due HD these to investment some it recent also while original chain taking supply Our Supply. complete seen relates for will plan approximately as And called the end into of account by and our of we've constraints COVID bit take a longer many facilities acquisition of will new be XXX to

of that fully our of market plan terms XXX XX we the operations, operational by expect approximately MDOs, or In we delivery year-end. to have

SKUs. I bit a to In in HD well decision would terms the for out HD network as which legacy a that we would the legacy broader HD a plans. briefly to our acquisition have more of to supply store-based open can today, SKUs we Supply to MDCs as rethink the market freeing pause originally fulfillment, that given roll delivery fulfillment take of which expect chain of carry that into capacity in so We our assets MDC us better handful MRO scope our required the led were local, time how the Supply for Supply, our rollout operate we MRO as delivered decided centers, most order we store our facilities, leverage determine we but a to will This up direct those SKUs. intended center factor

commercialize we've and we're we time facility. really out optimize just X been buildings. really what what approximately flatbed year and the we end Dallas takes our about in FDC seeing of up. operating that over these years, was or this Lastly, centers, The stood first intended But to XX terms with of goal. in half we assort, for is like learned distribution it expect of our to It has the

we the So Chain still made we're have very that Supply pleased progress but One regarding with our more do. work strategy to

Richard McPhail

And some CapEx One just capital is expenditures X% so Chain of expectations embedded for CapEx, complete the around to sales. our clarification the Supply on in

were after assets there that the $XX what end it's billion further while really HD could mean years. acquisition Supply to grew our still noteworthy some some by think think of delays optimize X markets, we over to we to also I these opportunities took and great

keep One we're to as so And excited and part We're the rest growth. while really and top that of investing created has early -- capture are market one of Supply ecosystem. we share Chain, ecosystem line tremendous sort the days it's an of of

Ted Decker

run during running business say, our the capabilities. with Liz, Now the business. the And a new team chain about I business the business change the pandemic had talk we here often and changing that supply and to

So they've done just a tremendous job.

Operator

next Our line the McGill comes Zelman question Associates. & from of Dennis with

Dennis McGill

inventory, more you First sell storm-like mentioned back transactions question, to if want times are get And and you're the to situation it the you couple had of a the pretty -- yet when to go I down. that able stores you inventory or just quickly. in

down unrelated? the have transactions So X are I in-stocks? implying just wanted that don't things to you Or you clarify, those are right are because

Craig Menear

There's as inventory a certain certainly transaction of result in of pressure levels categories.

business the been years, over of if pressured in the areas One X.X last in has electrical. the will, you

called hasn't Depot. the exclusive literally seen have off get of to last volume getting fast did becoming I moves out, capturing Ted merchants I mean quarter the shelf phenomenal capacity as Home significantly. a Our boxes quarter as go it. In-stock we it job, iota the or in with we remember on can't the The the improved up terms before more goods, one because Carlon as

see of what when they with goods, And Pro grabbing happening they're Where our it have they job closer a buying might part see more it it. frequently, bought past, in the shop they and actually what's to they actually when so on the see shelf. customers, they're

Dennis McGill

market the share that And gain think you or most are side, the or in excited in there helpful. store longer on the That's the X certain term, as you're then over next out share categories about departments years, X opportunity? store Okay.

Ted Decker

truly, mean, the I store, Dennis. it's Well, across

remain Jeff, and can't one business We other. than driving project You've before innovation more the in heard me project a every literally I of your have store. go innovation. the any business bay say We on thoughts, is today, about any

Jeff Kinnaird

it's Yes, store. across the

If lumber in about about and and materials the roofing terms categories. build you think insulation the you and composite think of if drywall business decking;

strategy, you If and opportunities. surface the at we flooring, flooring hard talked about luxury tile LifeProof look vinyl other

If you look PPG at Pro and Paint and the opportunity with we have there BEHR.

driving and opportunities If Ted, garden across outdoor XX-tool category, other RYOBI and few. Milwaukee terms market in name business XX, programs goes mean, in share tools you and look department; the electrician. I that the a plumber to it XX, the at power we're of across in the XX, the

Ted Decker

very on tremendous one for a just brand had BEHR and Pro let strategy, comment PPG our so in Dennis, build Paint. planned consumer on to with mean our our go-to-market working exact together with thing we've time. purchase same get Pro formulated PPG force And They sales we brand paint each the highest-rated larger just PPG. heard BEHR as mention outside BEHR, And Pro-specific very now paint. we in They paint put Pro store. that our I you've -- have, force, have before, and formidable seen their working also a paint. business. of PPG-branded force. sales has that's Yes, consumer With external to, me doing us sales outside Jeff's and are in some introducing has stores growth we're with in large again, this

building outside the specced think and So our first paint. paint leveraging absolutely our time, and This and couldn't also force. we Pro -- of the for sales for in PPG external be SPEEDHIDE thrilled their market these that with supplier stores We're brands is is and then X the We're getting proposition in with what introducing paint. forces. happier Pro we're stores sales Pro their very just go-to-market

Operator

over would I to comments. back the turn closing Janci, Ms. now you for to floor like

Isabel Janci

today. Thank you in you, quarter earnings look with all you to our forward and us Christine, thank speaking May. call first on joining for We

Operator

gentlemen, and teleconference. conclude this Ladies does today's

a this participation, wonderful lines disconnect time. may your you for at your Thank day. You have and

The Home Depot, Inc. (HD) 22 Feb 222021 Q4 Earnings call transcript