The Home Depot, Inc. (HD) 14 May 242025 Q1 Earnings call transcript

Company Profile

Participants

Isabel Janci	executive
Edward Decker	executive
Ann-Marie Campbell	executive
William Bastek	executive
Richard McPhail	executive
Christopher Horvers	analyst
Simeon Gutman	analyst
Zachary Fadem	analyst
Chip Devine	executive
Scot Ciccarelli	analyst
Michael Lasser	analyst
Charles Grom	analyst
Steven Zaccone	analyst
Brian Nagel	analyst
Steven Forbes	analyst

Call transcript

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Operator

Greetings, and welcome to the Home Depot First Quarter 2024 Earnings Conference 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

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

our Ted Billy today and us Chief Richard call Joining on President Vice are President Merchandising; Campbell, and Executive McPhail, Executive Vice Officer. CEO; Senior Decker, Vice Executive President; Bastek, Financial of and Ann-Marie President Chair,

question limited If please the investors. And and department are remarks, prepared open limit our get question analysts to will be to follow-up. Investor (XXX) for at during please a to reminder, with questions. unable to Following the XXX-XXXX. call Relations Questions we call yourself one will one be your as our call,

our turn today's statements as executives remind call the Securities Ted, to defined you in I the press let Reform the that and XXXX. Private Act of me by include Before release Litigation forward-looking over made presentations

and subject not projections. to our materially are from to statements identified uncertainties in These measures but that and Commission. certain our Exchange the and risks results actual also Securities factors could differ will to the our risks include, and presentation Today's measures. and cause the expectations uncertainties These limited on website. provided Reconciliation of non-GAAP release is filings these with in include are

me the Now Ted. let turn call to over

Edward Decker

Sales year. last Isabel, year. period Comp last period the you, X.X% billion, morning, first the from everyone. same and same the down for sales Thank good quarter X.X% were $XX.X from declined

to share. in executed Our X.X%. in level compared to quarter $X.XX The last high the first were quarter, market U.S. earnings quarter a stores first negative the $X.XX had comps of team in share Diluted grow the continued per year.

in associate and discretionary a to spring certain we and great assortment store readiness, was delayed impacted feel engagement. by continued While our the about larger quarter product projects, start softness

country. across associates serve energized customers are the as spring ready and our Our breaks to

engagement projects. strength As Billy, we in saw you customer favorable, where from was good and will hear outdoor weather

remains new creating set experience remains growing focus building wallet a with on our share Driving top of one the our areas. customers interconnected focus stores. growth pro In addition, and differentiated with sales capabilities our best of pro

operate And contractor the a asset addressable $X many which serve base who class, highly across $XX States. with market in TAM, pro United home products improvement of working is installed trillion. projects. in we shops homes we of the Remember, fragmented on represents that a the Within greatest complex opportunity categories of trillion residential while approximately the

have specific an $XXX share little opportunity today. defined relatively which We've as approximately we that TAM, billion of

effectively of to options, need serve pro services TAM, this expanded ecosystem. we that at center that management know and while fulfillment across residential to ecosystem, geared to we an sales the also shops store set trade dedicated our that pro we the of We referred capabilities more And remains capabilities a assets, order are credit digital categories. specific as and force, developing the

we're shared As pro markets. before, this have more with markets to seen mature we've you other great so success, our with expanding ecosystem

by markets trade foundational outperforming in pool acquire SRS, quarter, other have markets landscape year. ecosystem quarter, contractor roofer, large our specialty with XX X while XX aggregate. And verticals the of at these professional. intent position the last in markets heard the currently announced you the Earlier we and our a highly the distributor serving pro large, this maturity end to leading trade a specialty the our residential As in we'll fragmented are they different of levels, elements fiscal are

category pro win trade us an who occasion. right SRS the They specialty job one also ecosystem the exceptional specialized effectively complementary and been complex capabilities pro to project. to specialty with serving is does to shops complete SRS avenue the needs their building, giving serve the us trade more we've another to give typically project only customer.

addition, our in leverage the ecosystem, as out we SRS a build operate. product with management business catalog which team can they exceptionally in an their we verticals well-run expertise own world-class is In in deep

front in We we us, market, with happy growth we are in business. have and our invest the the despite core in operational our of continue in to very business. opportunities significant pressure And execution

We are assets pro our our with are our gaining they our in on digital share whether ecosystem. through of customers wallet or shopping stores,

serve They teams, value and partners an MET them by and for outstanding close dedication supplier did job quarter, always to in store and chain to I'd service our and merchants, environment. are supply teams to throughout like Our thanking their the ready delivering work. any customers hard

the turn over Ann. me let that, to With call

Ann-Marie Campbell

good Thanks, everyone. Ted, and morning,

be we season, serve to engaged, selling to excited our bigger our As head and ready into customers. continue associates a

is why growing is Ted the of success. opportunity. any pro to our be invest teams We the As mentioned, know continues working our with in complex share that and wallet That critical the on we winning to occasion our capabilities. pros to pro growth largest shopping for best experience purchase sales continue projects and delivering

target sales. which opportunities pro our platform new These tools well in a teams. assist have insight us intelligence within value sales identifying We capabilities market and the feeds bring leverages as to and to to CRM action developed both better cross-selling data our as the highest optimal tool in our science drive are to pro helping

stock critical the is being Another sale. products for are and with shopping shelf those the available in of experience and products component on right ensuring

our What's really drive results and for directed and to far. our the year, are the OSA also lean so Vision task exciting associates. and Computer to other Vision talked for with Computer about by you before now leveraging thrilled we and actionable to will productivity consistent, continue we is how across We've applications are This store. we've creating seen Sidekick in improve

of meets customer product example, experience. products the shelf Maintaining quality component helps our For the key maintain of delivery the on integrity base is standards. ensuring Vision high-quality, by the Computer on us our that damage-free a

all shrink. identify complex also can our are technology have to we carts to us in mitigate carts scanned high-value Vision to and help products or cashier with their help signal for. the accounted ensure deployed Additionally, this and Computer customer basket floral the self-checkout

to While results we seeing. applications, are early we thrilled improve will are we technology-enabled all upon these of with continue the

quarter, opportunity we you experience, XX% over you be returns now within our with Last of returns areas that update one on website. from our our online within post-sale are I'm orders talked Account self-service to their of our profile specifically able to about process. excited My of

site customers online to returns will [ can will back or we and which our of pro barcode. Later our return ], create at changer scan a pickup FTC job a it game experience. of year, off own order Now be a drop UPS this with shopping their for an enable

our associates to not and also us. of amazing None to of a and/or and initiate I customers. few and ahead drive return stores enhancement associates allow to about are and but to customers site do productivity. them are want so This drive from shopping look store return the just would for greater ways our residential I win, for thank stores, primarily This store. versus possible pros, that's customer excited in experience job our and bulky big the we a of having the to a the is for better sales are massive improving pro for their items will will satisfaction different examples only customers be without forward These care I initiatives am they our doing all to we and/or opportunity all this the of associates. take to

call me turn to the that, over With Billy. let

William Bastek

for everyone. morning, want and supplier I partners also good Ann, communities. our serving Thank customers of and you, to start to ongoing our thanking their commitment all associates and by

As in from certain spring start were sales larger quarter, continued softness Ted, by you during a discretionary our projects. heard delayed and first the to impacted

saw However, engagement outdoor where we strength projects. and good weather in was favorable, customer

merchandising to XX Before providing electrical comp shopper up with reflect it's department XX customers important performance, and we commentary that from We changes and more and previously our and efforts. our have bath. categories align lighting note closely kitchen departments our merchandising and now have some to on growth better separated made

platforms. power included capture department and renamed outdoor tools equipment our battery-powered have power the Additionally, maximize to our we synergies strength of and to

for our quarter. Turning to department first the comp performance

positive lumber, and company were and while plumbing hardware all the power Our posted average. paint, comps, materials building outdoor garden, above departments

and quarter, first transactions ticket average comp the During X.X% decreased decreased comp X.X%. our

ticket However, Big or we down X.X% innovative quarter continue to of over see were $X,XXX and comp our customers products. transactions trading last for up the to new first year. those compared

the We continue discretionary and engagement softer financing typically such where larger fund projects to kitchen as bath customers see to remodels. use projects in

digital Turning sales. first to year. online Sales increased of compared platforms company leveraging last the total our quarter to X.X%

of were chose that first our For the fulfilled our orders stores. through with half online to those quarter us transact online customers during nearly

removing interconnected our on experience. an shopping focused friction incredibly We are create to customers excellent for

search exactly do for. this, to more product work customer's most filtering search to the To capabilities, We they looking and to and serving we out targeted behaviors an keywords, offerings continue improving what online enhanced intent-based that our combines And rolled intent results. the functionality on our deliver customers. we to engine improving our relevant are ability find

business. but both was All of DIY these one customers drive relatively Pro another, strong together the in and our were for results line to performance online initiatives in work with quarter. negative

see are projects. pro from resonating that on are our homeowners we continue relatively as our The we to hear pros increased engagement. backlogs smaller remain stable, we making take pros with While investments

For with have with customer. pro see made example, this who gains we significant and the to paints progress share continue

enhanced service their site PPG from Our are BEHR partnerships as and with capabilities in-store around delivery and remove their well job helping friction to experience. capabilities as

the and spring our performance end hosted of events gift quarter, Spring During Friday both the strong across events. center Black first we and saw annual

saw the our Our with and the best event. job strong products fantastic did a we merchants engagement customers throughout curating

with lawn had some outdoor last we discretionary categories where the the saw, couple years. we forward of experienced like pleased are results power riding particularly mowers over in equipment, pull We and

we The trend assortment. battery-powered and products positioned to our from is continuing, are gas away well with

have batteries majority Milwaukee, We our estimate or of assortment are whether looking and brands our Makita these batteries. DEWALT, in market the million are nearly that the for, there We today, the RYOBI, it's vast covers RIDGID. customers XXX

fact, best coming that Depot is of hundreds box exclusive Depot. channel these brands In platforms, each the back of that across this XX% customers to with Home of The more keeps are products with of Home batteries the programs loyalty to one in than The big

incredible. And our live category looks goods

of customers for vegetables for with We're the gardener. projects country, shrubs to all and with of ready We help are spring to across breaking ready about herbs our needs. living of excited remain type from a outdoor outdoor everything and spring their variety we every flowers, and

over turn to like I'd to that, the call Richard. With

Richard McPhail

total In last quarter, you, year. decrease were Thank $XX.X X.X% approximately the morning, billion, from sales Billy, and a first good everyone. of

comps in with X.X% negative the February, negative X.X% February, During comps with comps X% in and Comps the the of April. total quarter, X.X% X.X% first negative March for in March negative negative negative were X.X% of our company negative were negative in and X.X% April. X.X% in in quarter in U.S.

average. positive transportation cost margin gross the our quarter, year, For shrink. and from posted driven Canada Mexico points was XX.X%, XX first of below comps, primarily was by In approximately quarter, benefits quarter basis the first slightly the increase last lower the whereas company an from

quarter, the as to expense from was operating from the we points a XXXX results. legal increase increased by basis the our first of first The first from as deleverage sales of to overlapping of benefit settlement that line quarter a as primarily compared approximately driven percent top fiscal a well quarter are During XXXX. XX.X% XXX

performance operating in Our expectations. with was our line expense

the $XXX first quarter quarter the quarter first to the compared first first million. compared quarter of XXXX. was and rate XXXX. in XX.X% to $XX to in expense XX.X% was the the first quarter, other for XX.X% margin million decreased fiscal Interest our tax operating effective by In for Our of XX.X%

decrease quarter a diluted earnings of X% first the to quarter compared of the XXXX. share first per Our for were $X.XX,

$X count of end square During the and turns total compared quarter were X.Xx the stores, of approximately $XX.X from quarter, or the to footage million feet. last new X.Xx, down inventories was XXXX, Retail our XXX the first first merchandise billion, quarter, opened to X,XXX. square billion bringing we X were year. XX% At approximately store up selling inventory

Turning to capital allocation.

billion returned repurchases. million During capital back in million to the form we dividends approximately in form our the $X.X quarter, And in the share paid invested we during of and $XXX shareholders, first $XXX to approximately business our the of shareholders approximately quarter, into expenditures. we

As a as our we intent reminder, acquire in Distribution, March, we share to result, paused and a announced repurchases. SRS

say capital that changing. you've approach many As heard maintain times, a us we disciplined allocation, not is and to

in approximately of and investing will expect capital we of business excess invest annual the to foremost, in dividend, business business, to time, the share and to return our repurchases. also plan through in and to After pay of the the we sales is invest it shareholders X% any basis. to capabilities expenditures to and an we enhance strategic time cash objectives. First intent our From our accelerate the on form will in acquisitions

Computed the from XX.X% ending return beginning on down and XX.X% the and -- the excuse XX.X% in average was on debt me, invested for quarter fiscal of long-term from of months, XX down trailing equity first XXXX. capital

our Now comment our guidance XXXX. I Today, reaffirming on for fiscal XXXX. will for we guidance are

XXXX. is expect As does impact any not it The guidance our a review, close the acquisition SRS. under from and reflect to by reminder, of fiscal announced end we acquisition currently the of currently regulatory

negative positive of to Total and XXrd growth week, sales comp approximately the outpace will comp benefit XXrd sales of with and growth expect approximately $X.X will sales total week contribute X% from approximately billion sales expect we sales. a in We X%. sales growth

margin approximately XX.X%, XXXX. basis to expected points gross fiscal XX Our an is of to be increase compared approximately

expect approximately XX.X%. margin of We operating

Our approximately effective XX.X%. is tax targeted rate at

percent approximately expense transaction once is per We billion, update guidance our earnings X% approximately compared targeted SRS share to of to fiscal appropriate be as and is $X.X It to closes. growth expect net XXXX. interest intent the our diluted

that positioned we've any the believe meet of We made environment. The we in operating ourselves our have in business model. agility to our our needs in enabled customers have investments

customers, our scale and our market low-cost faster and strengthen deliver we forward, look to the value. position our with drive we continue growth invest position leverage to to As than shareholder will

today's for your are participation call. in now questions. we for you Thank Christine, And ready

Operator

Chris [Operator Horvers Instructions] Our first JPMorgan. question with comes of from line the

Christopher Horvers

the net also last early the about Billy commentary that good a how effect maybe much understanding where spring of Do headwind And COVID-winning Can was was how with a pleased bathtub sense mentioned categories. you you some you positive was out? think weather the related being could talk have -- the how some weather that, spring wonky. and year-over-year, to and play

So where business. flat around there maybe -- see get up or was comps normal weather? even Did the you maybe spring or

Edward Decker

powered Chris, has a some good really great where we've certain word A are most driven that business the spring. the point by our really had one to business. is But lot brands can't We good equipment. markets we that's power of this incredible. particularly consistently responding what is of in in yes, And markets, some talk was customers weekends, describe that to and the northern had positive lot wonky We outdoor comp weather. geography the to that power a really category. and just about battery have platforms

but weather year consistent haven't year were bad just We much country. looking for the given how had we Western the But across happen. weather division this improved really was didn't the last West, in that

in we a effect to is have the bathtub So but go. long way still

for sunnier days. Billy, drier and weeks some are of weather selling certainly some you can But add maybe hope commentary. us biggest Our ahead and

William Bastek

last for And I of was if as that a mentioned, Chris. categories, mean, the will. if you single lot there back question, knew go purchases, you and No, item thanks discretionary we forward pull question Ted Yes. in And year. impact we're And you normalized no would see cyclical those some to an there's typically had of businesses certainly pleased cycle -- see. been was really what of that to more the

pleased so of with And seeing that. really some

in center has there. which spring consistent, seen great say, events. there's still I been great, consumer our Spring I seen great customer Yes, Friday customer engagement where event, we've And the should Black We've our some engagement, weather mentioned been or engagement. hasn't bath, gift we projects out called in of projects, in see finance remodeling pull-forward the they and customer as pleased kind of so the specifically financed really categories far. kitchen but of continued that with the big pressure those some

Christopher Horvers

And Did finance garden to are sort project big to start a you to that categories you of side. big see ticket just where up? the ticket and other grills on business. worse back could dig like those get to and rates in X little the on any the because Categories cycle if the in not equipment of flat, get spiked emergence patio, bit maybe on seeing is coin, it sides replacement

Richard McPhail

Richard. this Chris, is

this the as well of changed So out. to more see deferred the we just pressure of sort big year-over-year of really item and last towards was yet which as item that last back from the projects a year and perspective, those big QX dynamic QX, ticket was saw Billy purchase has like We began the we saw this customers of large pressure dynamic purchases. deferral half called ticket

different categories QX 'XX. those actually And maybe, about particular So talk in the pressure a versus has Bill, of 'XX you It's increased. story categories.

William Bastek

terrific of engagement. engagement. kitchen just remodel of pulled cabinets as to that some the over are cyclical other financed, back a buying. and the I really purchases Conversely, mentioned, see but where is with more a some pleased like those seeing Yes. bath that's I mower that of well category pleased little we're riding those forward, even had categories mentioned, bit really to and specific Again, and some the over purchase, so more like We're pieces project, continue seeing I seen mowers customer business. anything the even categories we've pressure. we really in categories riding mean we that, and mean, we're forth. customer the just $X,XXX that $X,XXX, ones item you Chris, few and Again, we're some in with item

Operator

Morgan line from of Gutman with Stanley. Simeon Our next question comes the

Simeon Gutman

clear lock-in effect noticeably is you going the demand normal than get your there And can My a with of turnover stronger demand? the versus now is to follow others, up a turnover. where ask and And country don't we need what on macro, more I going contingency micro. if look is pricing to it's lock-in regions sort talk of about effect that If up could if a rate that can for first decreases, opinion I'm real is seeing we if like? happen. in want

Richard McPhail

have So about this term. think and Simeon, think to you I short term longer

So if folks in significant puts point When that sort that, in than we've most And of we're of more Clearly, seen housing really the that at at business. of sells pressure we to you're a turnover obviously, impact that X housing decrease think our where spend about customer lock-in year lows. home, the and effect historical think years about year get much a thinking don't. can't buys on they when lower. performance, or When in current they turnover. a

so And weighing what's the of had you at lot this a some environment, point, to that to doubt we though, demand, as we're there's ask on effect, project that's interest no yourself the our that and Then anticipated. macro. is the rate sales missing have subject lock-in

rates interest We I normal. the household discretionary the about just at something think housing simply current spend must point, prediction is what that something making that we're some to is you sort of pent-up on not know shifts for become At thinking do. question a that new demand formation. point It's from This behavior. on. there's

really turnover I'd is having it term, projects. so And say just not It's large all housing on mindset. impact our And related customers' it's short spend. again, an

of look, to spend we're the And where sort customers. debt mind of said, of this. finance not on seeing immune we are interest rates Billy sort weigh As

Goods on look services right most driving figures you and and categories. durable the are really what's in are services. If home-related goods now, seeing it's underperforming the national the pressure particular, at consumer

the it our this not baked surprise time. So will how The over a for be and this into year. evolves is expectations question is

Simeon Gutman

they're despite negative, it. overreading That's not it on breaking stack, better still a if spring helpful, looks it, but is like Richard. little that's getting the not a and My weather, we're follow-up, transaction

bottoming, So industry if transactions at line, improving an on you trend getting Or that look better? your is share? is Depot taking that Home

Edward Decker

talked dynamics on like challenging say Simeon. and transactions, That's after the And that's a hurricane. sense about the COVID the to we demand sort which categories. your reviewing there from are forward. We're was last those item year lap X sort and We've of they Well, for sales pulled I and those Billy you are lap big-ticket share. of grills and storm months But in going but hurricane out. third-party relate driver year. of items talking XXXX, would housing you before, that no I pulled reporting about riders to turnover the historically of demand over much lower like this last of from giant prior is is what question, is about a newer, so COVID think suffer not effect our have housing patio we it's on, and years, the taking were turnover, this we And million you couple and while sort was units forward, a has naturally were is and demand, What steady. of the dropped XX-odd lapping. chatted just fairly the sets, doubt, that buying, steady is in state huge these as from X seeing that now tease

lower. run some we rates to macro. million, and lap that the some was activity It's Richard at think people $X of will. if start hard will to in it I even housing the much sort tough decrease the is dramatic call going the point, you And interest lock-in hurricane, But newer certain under predict. see don't But in months, rates said, at to as effect. that

X.X% already all peak. is interest with and seen various houses percentages that We've the past the under in mortgages of we're rate that percentage strata,

starting to that So there. of you're question. your of But an already see transaction leads bit a all to unlock then

we like So seeing the well. as with that basket see we're transaction dynamic. more in we But per up also we transactions and trend lapping to increase as the COVID of units are housing newer in some of were starting pull the turnover trend forward net-net, pressure some like

said, our for So not into XXXX. baked all as Richard and unexpected, guidance

Richard McPhail

a down large projects, we're you the around that, of sitting. look financing you to HELOC just HELOC having where look borrowings in $XX about somewhere around statistic, in if at to at billion year-over-year this you out add and refinancing In last some And just dollars, spite but billion look in in dollars, were withdrawals $XX seen from quarter. QX. statistics that's the think territory XX% billion, pressure, same to at and you quarter down how billion or quarter. I QX we're a And debt think $XX a that's $XX XX% dropping we're peaked year-over-year of the cash performing they

And got from significant are than to where drop, so you've a XX% more peak today. we

for have sequential that's so the interesting to begun And basis. actually us fact that context transactions to a recover on

the we're for on now. the punching little said, bottom. So some almost at respects, statistics us through least macro environment. Ted been stabilizing But has And as are against say while could the a in you those

Operator

the comes Zach next line Fargo. Our from of Wells Fadem with question

Zachary Fadem

want on start I outlook. clarification with the a to

both? just to that And this pros on midsized more or And the stepping DIY this health post QX. in the then You've the confirm and I versus EPS transaction buyback was of driven any got pros? second, or color growth. direction. larger want X% growth pro Curious incorporates pause small right if

Richard McPhail

Great.

So Zach, I'll take the first It's Richard. part.

about in about as we're And you about look, guidance the repurchases, accumulating anything have So that. and do when also reiterated no fact to that reason cash. think see share think the we pause

cash, earn accumulate that cash. interest we on we As

higher on around in which have over now, sheet, $X year. cash billion see $X You'll we balance last is our right than billion

our share and that the net repurchases where a from wouldn't is therefore, interest So change it impact given of interest rates offset really income guidance. to paused short-term are, strong the

Edward Decker

or DIY, the the pro ecosystem. performance pro within continues the more negative were Chip larger about in the there? comment let quarter, particularly less same for more rate. pro, I'll some engaging outperform our the to each those on And And

Chip Devine

the around teams, sales and we've expanded markets Yes. capabilities those our and we've positive in noticeable outside of supply our capabilities seen outperformance Zach, where our Thanks, chain expansion comps.

X pleased we'll we Detroit mentioned, very X And next with into X markets this as that in months, expand move LA, in X FTC Antonio. and in march that San another So in X expansion. of we've

our pleased So we're very with progress.

Zachary Fadem

impact. Richard, have think curious SG&A other way store about you like if disposal right this And through the the your about this productivity any was Appreciate or quickly, is you year-over-year if color. on your when looks then, the I'm per the to year. legal it a it. Got flat exclude at levers year basis And

Richard McPhail

in year Well, to staffed can make sure our wanted little I encourage later start we look spring we had Obviously, we quarter-to-quarter. a as again, we were said, bit you our have full because would vary stores. And guidance that expense look, than liked. at would management operating to to fully we

And so we driving we mean, make I sure wanted our other of that front our throughout to all there off had to hats in productivity but We the customer. favorability. teams baked right but portfolio, controlled fantastic in all the our And point, reaffirmation that particular operating ] guidance. into did a operations just by quarter. team, that's landing the expense of is [ job were

Operator

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

Scot Ciccarelli

can their plan discrete be you SRS might scope this conversation. you to initiatives? your how talk and a pro pro relationships of general, to in set about the here But complex leverage broader beyond answer of The little potentially utilize

Edward Decker

Scot. Sure,

highly just company a great operating foremost, and large, is First fragmented SRS markets. X in

up market With the pool in roofing, So being are their our TAM at conference. of $XXX strong billion landscape, that opens TAM a specialty trade, we and #X in each $XX they of where talked billion about SRS those investor increased segments.

just growth share well-run strong positions. in where they So have markets company X great

like credit, a we're things capability, things distributor. sites, XX we're building on So years trade and retailer job much to forces. doing, in a as engage building, management, get you completely How and like like order more for all to a incentivized that you wholesale win complementary new they things are capability robust lets time field like been what and things things delivery sales TAM. complete first We've we that have the and foremost, it's

them. these So from all able to to forward with for and we things done being that years, and engage learn look are them they've

will can focused But and customers their mean serve product pro broad catalogs also I customer. those cross-sell benefit in our from our their deep then residential they customers. into our verticals, we can

our service expand great just look market, expand opportunity to better as we at customers. to this So capabilities a to and

Scot Ciccarelli

Very quickie. helpful. And just, then a hopefully,

end being do going complex You many talked that the you pro out for capability year x. by in the to markets about capabilities. How ultimately to, XX see markets XX of rolled

Edward Decker

would expect over our rule to and top in time of the in often be to we we of be that -- space, mean, would XX, expectation. XX-XX I about kind demand talk the

Operator

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

Michael Lasser

expected of did light start way year, to your the any in light may of what's overall likely rest acceleration -- give to of was discussions market of of could home mean year see to rate expectation the improvement, which than you In here? unfold the ago, days internal the cuts that the around rate XX less especially an moderating be have now from the you the may fewer

Edward Decker

not with what how I our take core said watchers necessarily. be executed how stance the we Michael, this discussions we hasn't are quarter. evolve internal well couldn't in team business. fed Yes, on is beginning And the weren't What We And many cuts. of execution our happier do changed. we're focused we on this a and on how as the is we engaged and had or around at housing. neutral that a said, of level to we going that And cuts year here bet during

job an our negative process you but just way helping and on-shelf to a in I about technology merchant shrink, down, which teams. the when the in with X.Xx store at tools increased mentioned turnover stores, are take the availability supply what billion the And delivering leveraging XX our remarks face the incredible they telltales, instances, and all but of in has availability $X What Hector few think off wage in performance. increased just supply cost, incredible of chain actual to not better in-stock, that points we're doing in investments of mean is a to our and levels. the minute terms these is her our took of safety on-shelf delivering, rattle what that basis out with Ann I can is comps, if in inventory and done getting attrition in-stock just chain that

lot then you last general delivered efficiency year, this any that had during And we're marketplace. the not price that well but we Home And talked year. that And in as value and we Depot. leverage then in prices promotional the out at as that in a noticed, signaled and COVID model been positioned position. of remains add SG&A and time. position products coaster that some executed our overall years, we end the in we've of price flywheel cost million the price our with roller the settled the was a We experienced productivity having about We're $XXX having on innovative that in at more in

why quarter. that's focus execution So is in we can controlling the high just so internally team we with control, Michael, and I'm their level of what that's what and this on pleased

Michael Lasser

respond thought there to would How to sign that was be Depot's pro the Home a school address little bit originally acquisition is, of a that? of what difficult segment that My is just follow-up could efforts proved you than to a expected. SRS out be market there the complex more has the

Edward Decker

of that's it are are we with Well, I'd and which we share additional before, distribution in to why done doing continue is to capture what we succeeding we what doing no pro capabilities respond see, say and one like roll to has to out but why we are it, we markets. is challenging, and wholesale it wallet

physical journey. it for thing introducing our that ecosystem We do the open also building up customers putting about know we're is DC, and ecosystem simplest the together it's DC all a those capabilities. isn't us whole our is of the a in to building. This But pieces to a

the introduce and said increased increased And we've engagement it capabilities. capabilities we as relationship linear those between with to customers is comp a before, as

our So discussion really completely they we're that was a team terrific is a position opened in. in efforts. management on specialty terrific still asset and SRS just brought up different green progressing a a TAM that attention and have organic and distribution our optimistic, to that

Depot $XX the So at we at day, in the Home $XXX about ourselves we a that the asset keep trillion billion reminding $X with end sales. a only TAM of trillion service with class

existing so with our the with we're with ecosystem. building shop in-store, complex to pros much who larger gain have with stores largely pros out our We shopping online our this purchase share consumers, that occasion

X SRS more white to to go whole even gives in other take play a space us verticals And share. new now

So very, different very propositions.

Operator

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

Charles Grom

spoke seen month delayed cohorts? Curious the follow-up, the on the weeks Have you to May. And how between spending quarter to here a Maybe DIY as few a of side. you the April. or out relative any income to in into spring. start first changes Curious, frame could you is business tracking

Richard McPhail

sort itself tends demand spreads cohort project show that you more projects. the I even pressure said, almost right as of the -- cohorts. And on pressure in is that of the about as majority really now. in really those that, could is said, cohorts, we larger income about So say than across size cohorts, income as higher it's the And to it income actually

As projects, we not is the this though, fund seems before, it's deferral to inability mindset. it's said to be a

irony going read. coming every -- you interest odd sound of are this they're soon. have bite Well, down You rates

the with us, from we're dynamic Our tell the horizon, most mind, So an important that income customers to that's "Hey, that wait." with on going in perspective. really just

William Bastek

has where the the especially of we've Yes. mean, And seen of great couple of quarter my we country. better with bit projects, prepared what the in been later parts I the outdoor seen favorable. story of the has as is a then, certain Chuck, first kind where dynamic really which pleased got through, same has remarks, weather little May. strengthened just favorable, the customer same weather saw been it really We've been weeks in weather the engagement, on

Charles Grom

you. then, Richard, for one And Okay.

underlying you anything Just you about the got terms you ago the Is spoke rate year. the of XX today confirming in maybe better or XX.X% feel there worse margin shrink, days mix? that assumptions makes to there transportation for gross that

Richard McPhail

with problem And not add we're a merchants all managing crime is retail, our I the away, it's periods going problem then respect the organized think perspective, -- so it, a And from on a of shrink year transportation is costs just shrink, to fantastic history, look, for last cylinders. retail from to to executing us. results. for one through all in most of volatile and retail

The only external tougher. environment getting is

put amount in effort on off forth teams As done with investments by we've It significant a return investment. making the pay work. our a result, amazing, tremendous is that of

external And to environment hate performance, so when is this, helping. the I look we not shrink at our say but

financial a got on the succeeding it's customer investment It's Our in on problem, And safety return it's in only associate to it's it, blunting keep best facing but that impact. still pressure in the not the terms we've attacking still it. are a business in and our teams a investment a a know we return performance, of perspective. P&L. We want from

we're really about so happy And that.

how this the last become dynamic during year, I'll here of QX and a continued about it's there's think I and year, think what call which the when saw price one the QX settled essentially shape when then not retail that think about worth insignificant you we year. of second that market dynamic, XXXX so into has would first in go half is the margin. the calling the there. It dynamic of I about you we settle XXXX, out half you asked and There's just during think and of

that this X reported ticket AUR think the we of year-over-year. is, within percentage So about you essence, ticket, spite in points pressure, when AUR quarter in about pressure

remind to you want that's I is year-over-year of what And comparison. a

kind the the a So first way. retail during of the of let's had and of a cost well, year. settling it height put in had of different We we lot half

an where a steady. measurement. not It an artifact and they're doing -- So today, is relatively prices that on X% of what year-over-year pressure are observation is

of QX. move QX, that again about we it'll through halves in and you'll QX in the from essence, pressure so be going have As halve QX QX, year, in X in percentage point pressure to then

asked you So the question about margin.

of respect put that is a shape is with important that I there. out to to year the think point

Operator

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

Steven Zaccone

I Michael same-store a here bit delayed you fact half what understand just want Can us the softer in been improvement second Lasser's drives this spring. on half has given follow first the to just help to up question. start that little sales, with the

Richard McPhail

Well, is which the outlined. just actually we factor primary AUR,

of the respect by to really end the if in arithmetic year pressure think So the sort from of of percentage of you the points X of year. the about to majority falling That's QX beginning X to the going year. with the

Steven Zaccone

Okay. especially question DIY did to then up changing Friday follow new the that Billy. for from was the business did Black online-only an notice maybe to think all, sale as side you try you on gross well. a it's promotional environment a spring Spring customer? Do guess, for And there margin, at of We compete is I on competitor. the

William Bastek

Yes.

most foot to that in a folks different do it's certain thanks not excitement, doing on Black and the question. speak value event, excitement, sale. very drive stuff the that it's drive do piece So traffic Listen, times no Friday the I'll stuff, to events, a And drive We're pulsing in but putting we're we events of we to bring note do the promotional market. for to year, than to to rational we're marketplace. when -- important

XXXX, in exactly looks as stands it no It's promotional different. today The it business, and like did pre-COVID before.

about to our again, it it's, footsteps do we've that drive note and year. to really to the I is think pre-COVID. but selling try that value little times key appliances normalized of a what bring to was to important absolutely bit, talked In fact, these environment at the And excitement, customers we

Operator

Our next with comes line question Nagel Oppenheimer. from the Brian of

Brian Nagel

I first is question, and ask a I of it repetitive this to to so the questions. So I least a at going bit bit But little prior apologize. a my different couple know be way. maybe

today, 'XX. for look you at reiterated As -- you guidance

macro is As Home talked so say, We you in through would about still QX. the pressures. impacting lot call Depot. a transpire, The to think about disruption see what macro the we

in have is guidance you the reiterated So from need some get solidification the you're today, you've macro environment to the do I change, that of to today? type type seeing guidance, question some of what

Richard McPhail

our Really, comes, the spring halves never business was or impact here a it annual Brian. only and comes impacts and no delayed in spring results manage when guidance. no, it this -- always matter This and we

So today. that's reaffirm what we

Brian Nagel

pressures. inflationary guidance of Got out it. reemergence, potential helpful. with this and question, a Then chatter That's will, if you more there some look, the second about there's my of macro

starting mean, see pass potentially b, of the is, type some business, juncture, think some of I a? of as this, to to are the particularly for to guess more at side I reemergence of then, do inflation. costs in type Depot -- that of Home it How ability consumers we to have question the And So your are within as type you you past. the along I commodity extent you about the those maybe view this, seeing this you has

Richard McPhail

parse sorry, inflation in actually the look talk about the you national not at home-related being goods particularly maybe just the you categories, is and services space in space, observations. not statistics, goods -- and Bill, in inflation, If space the driven

William Bastek

we commodity standpoint, commodities a last and a year And a talked there's lot no and no impact pleased the point copper, only we're Obviously, impact. Brian, with on from seen not the we've fact at Yes. in see very lumber, but this about stable that environment.

Operator

the final of from come with Guggenheim. Our line will Forbes question Steven

Steven Forbes

still? any as size to such just on project a are size better bath, compares weakness discretionary if of the project still expand sight seeing to ago in rolling baseline, year to it's some from pressure you levels? is and/or moderate, help it year I stabilization was or and Or line the us maybe whether peak projects sort off, in meaning this hoping of to relative certain there's right, way headwind kitchen cycling understand

Edward Decker

-- from that And biggest last an through year, of finance Richard This single projects. story. It's larger more discretionary went item pressure the for was of story. a AUR as I of was said the sure, more generally it's decor-oriented Yes. discretionary it mean, outside year, we've

kitchen like projects something those we've the and of of where but countertops, probably bit not I only categories little are actually projects, falloff just in down. trading take you a and If seen some size mean cabinets

now There's drop, -- the is we've That's categories. place. it. always those I are seeing through. on focused would it's turnover pass. I idea and only will would seen think place the too that going we've it people if So in had that That improve mean

mortgage it I fallout peak interest dramatically. I hit being of 'XX turnover so rates. that their down in ago was we're the just months the mean think October from rates seeing X still

those take are a seen update And et that type if a the new tick the ticking a are you you're those into master move bathroom, to of cetera. and So outside projects going up projects when you to going demand. type your impact place, then on rates And move, generally of in impacting stay kitchen, as update house, you the of we've finance. up, of that's and rates you

you now, of a right would see lap So that dynamic.

interest see We rates as do question is as much mean, that interest guys don't in lower. to rates, what And what then know housing turnover for does we going on that happen the higher does score? you longer,

Steven Forbes

And then maybe just a quick follow-up.

markets right, the positive. And complex earlier those in servicing the last I the he seen so those you've I think pro complex comments the said. year? pro versus you that relative does what that's at pro, guys just you the average? within Chip's company Maybe widening it that markets imply the you're believe Analyst that if between are stated Day performance comp, gap being to servicing said about a was clarifying where maybe what

Chip Devine

Yes.

comps seen Just said, have in professionals invested and markets FTC markets. those positive reaffirming our I where in what we sales we've

Operator

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

Isabel Janci

We Thank our to call today. look speaking earnings second quarter on for us in joining you forward August. with you

Operator

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

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

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