The Home Depot, Inc. (HD) 12 Nov 242025 Q3 Earnings call transcript

Company Profile

Participants

Isabel Janci	executive
Edward Decker	executive
Ann-Marie Campbell	executive
William Bastek	executive
Richard McPhail	executive
Scot Ciccarelli	analyst
Zachary Fadem	analyst
Charles Grom	analyst
Seth Sigman	analyst
Steven Zaccone	analyst
Chip Devine	executive
Hector Padilla	executive
Michael Lasser	analyst
John Deaton	executive
Simeon Gutman	analyst
Steven Forbes	analyst

Call transcript

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Operator

Greetings, and welcome to The Home Depot Third 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

Thank you, Christine, and good morning, everyone. Welcome to Home Depot's Third Quarter 2024 Earnings Call.

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

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

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

other to press corresponding the and measures GAAP refer non-GAAP these our and release earnings of website. to please reconciliation our a For measures,

Now let the to me turn over call Ted.

Edward Decker

geographical our quarter, diluted were the X.X% X.X%. negative $X.XX year. comps everyone. X.X% declined from the and a were billion, of posted $XX.X good positive in sales above quarter company performance year from variability communities Canada our same and of stores third our quarter the period $X.XX divisions, delivered morning, degree per and comps. perspective, last two share posting more quarter associates last the an drove Mexico quarter. In higher period to third U.S. a regions Isabel, Sales with the Mexico the and by year. From average, for in impacted our Adjusted the storms the XX throughout earnings you, in across currency, of positive last third hurricanes. the and were in of local Thank comps the favorable same increase U.S. third and weather In quarter, Comp X compared comps had

to you'll Ann, As hear associates serve customers tirelessly and from communities. and partners circumstances under supplier our worked difficult our

be impacted Hurricanes Our with thoughts continue those by to and Milton. Helene

our third hurricanes, the the expectations. exceeded performance from Excluding impacts quarter our

in larger engagement normalized, weather we projects, as certain macroeconomic performance saw third and As result as higher the hurricane-related we we as the seasonal uncertainty. Today, across expected interest But Billy by remodeling pressure in to demand continue as continued see on better well rate the goods detail, driven in updated outdoor will guidance environment primarily a better fourth of our the quarter projects. quarter.

last would quarter, for interconnected macroeconomic experience. Recall facilities remains of we of to our centers, interconnected new we assortment products. years, in over communicate launched delivery set allowing capabilities were through the of you third in faster Pro in downstream better fiscal share faster significant take options. campaign us focus delivery differentiated faster awareness in XXXX, not several grow we chain the to where growing wallet Today, delivery speeds speeds. details Many reach XX through We population to a approximately sales earnings or stores. the expect per approximately share customers marketing same made the X.X% of improving a the delivery supply comps our creating environment, we are continued approximately a best delivery. including decline in moment. Despite decline of allow Richard enhancements the our that X%. experience, to direct to X%, network a Recently, adjusted we with uncertainty to the I building to For on fulfillment U.S. these aware our that now like the builds built diluted will XX% more next-day facilities, options. In across our website highlight robust expanded

SRS Pro to and specialized this exceptional quarter job full While to and capabilities the is reflects $X.X gives customer their results. an are X in to XXXX. period on fiscal SRS win with right did in we customer our just for need higher a the is of that intended trade the who launched, them billion seeing months, SRS conversion specialty quarter a engagement, approximately track also deliver sales. This Greater first in is team the the incremental we'll financials. in complete project. sales The owe us

As would supporting acquisitions. SRS through and organically immediate you growth, both expect, focus with the is their

we However, and are cross-sell from advantages. also competitive catalogs our incremental opportunities distinct seeing product

of we investing front and tell, share we committed our growing about growth in continue the can us, to opportunities excited any environment. capabilities remain As you to in in are

met executing and supplier I'd to thank like store teams the supply did them for throughout merchants, chain hard partners an dedication quarter, Our teams, and [ work. their ] and and outstanding job

our importantly, is call over by to in missed. With me that, of of moment customers He's measurable the We more ]. Before on take our turn legacy our deeply entire of [ turn He the let over to the even us valued legacy The left our invaluable master communities passing. debt all. and an values visionary. and was saddened Marcus be he Ann, I Bernie. to call Depot and a his to to will culture. co-founder, Ann. But a associates, Bernie with retail a company, a the merchant like gratitude He own I'd reflect backbone above Home family

Ann-Marie Campbell

everyone. Thanks, Ted, good and morning,

to to and want impacted that Milton. my residential I Hurricanes the by sympathy extend been support [indiscernible] First, have communities and all Helene

through our One teams natural of disasters, deliver of the the support and teams the our and Depot the needed products [indiscernible] of stage safety hallmarks the storms has to our of communities proud to of we're field and exceptionalism and resources both while demonstrate associates. In ensuring providing always committed The incredibly our store to tireless help storms, efforts Home the are have been to and our their rebuild communities. the the of and center extraordinary who support of the and support necessary amazing culture the restore associates extremely of efforts been aftermath

with this and thoughts be navigate continue Our to as prayers they associates and time. affected of communities all challenging our

insights Over Pros ecosystem working the progress key on making we're complex that larger Pro with providing serve as capabilities products. last the our year, some on

Pro-buying like Today, this our the now highlight is experience with take pleased deliver of ecosystem, in I which moment to occasion. of to we a are to stores the would Pro making for are performance investments some We best U.S. XX markets. the every in

talk experience. with a overall to about and outside introduced on Pro higher in-store order us heard but labor focus customer to during drive improving in-store on [indiscernible] a and deliver our critical desks Pro SKUs ensuring a needs availability enhancing role, new multiple to on-shelf Pro of level service. Experience teams, the hours with initiatives, systems through we are our on help with the You've quantities We seamless focus oversight, processes more job in times. of Pros, leadership connectivity more Customer also sales recently drive to a Pro and to with peak Manager ] building us we allocated important enables experience existing and most the more the relationships our focus for have our sale [ leadership on shopping This team [indiscernible] exceptional available

as tools, a to View to improve and emphasis more My also outcomes like drive driving take you with customers. I for a combined improvements, the actionable more a minute increased in-store shopping seen and customer insights relates it shrink. customers. process over to are more progress with We also the These improving we leadership engagement bit to deeper with on Pro to would and robust few the service last the of have engagement around continue level more experience engagement Pro share quarters for

mitigating in the of and cross-functional leveraging For methods and most has continual shrink. evolving a to and test learn ] [ been focus on reducing us, technology effective investing process, shrink our teams our

While be about initiatives. I challenging, shrink business the and are pleased a the we experience to excited continues through are drive seeing the external be progress across we not mitigating to results incredibly for customers. positive we're momentum best-in-class making with could more the environment improve

like Our stores I thank them are would all ready to for and that they do. and our stay associates engaged,

extend one my the the turn our deepest as family. With Lastly, of to to by Depot communities, back that, giving Billy. to associates inspired of hundreds me Home for condolences of market [indiscernible] call want let I the over associates ] [ entire and thousands to passion

William Bastek

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

expectations you better As favorable seasonal performance the exceeded during in engagement weather from more as quarter. third saw of Ted, heard quarter as we categories the some throughout our a result our

we addition, saw also of a incremental sales result the as hurricane. In

and higher the rate project However, uncertainty macroeconomic greater interest pressure continues to environment demand. overall

Turning for performance quarter. the department third to our merchandising comp

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

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

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

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

quarter, dedicated the ecosystem, DIY of During Pro grows the our and the Pros were in our Pro also sales engaging have customer. who salesperson, were And third with outpaced performing strongest positive elements quarter. those a

of digital Turning last chose quarter to online through leveraging stores. for half compared our our online third to year. nearly the And our sales. online orders transact X% that third customers those with during us quarter, total fulfilled platforms increased to company Sales were the of

personalized [indiscernible] leading whether our delivery as results, our on summaries enhanced we review addition, our from are relevant is product powered and you improve Ted, focused retail confidence all or more experience, customers. are continuing or it speeds In our heard by of AI, search to for and interconnected which to faster

how to bring we basis. Henry the benefits. event, innovation continue hosted our many and deliver will bring value [ RYOBI, best-in-class recognized the number At and best the third Milwaukee, solutions quarter, simplify of products innovative together Wego across the features more. transform meeting, we Bay, Starlink, focused supplier partnership to that offer we customers the with a work who During ], to categories to project Glacier we great our they This market, and on a annual daily with where the continue Roofing included to industry vendors on

innovation DIY offer The both the Home our and of customers. Depot partnership suppliers able and that the we're and value proud our are that bring We to to Pro

Labor we're and events, our Day results. annual hosted Halloween the also and We with pleased

number our a both led across Labor event, which and Trager categories, for our Day for of encouraged with sales our assortment. the engagement ]. the collection During another were record with customers product in-store by comps online was program, and XXXX as Halloween quarter, positive to including we to continue add their unique exclusive [ grills, customers' year had our And

] RYOBI assortment ]. our to have to brands and our quarter, fourth ] and As MXX [ with of Rigid ], Husky our it's gift we customers cordless events. new into DEWALT, Black attention event, holiday, Husky assortment we for continue [ the something turn RYOBI, our and our plan most toolkit Friday center whether wide momentum Milwaukee for annual gift Milwaukee, our lean everyone, [ with more. that of In matter fuel We'll bite Makita, our tools tools, our [ maintain we to center

making [ offers leverage tool on and and toolbox XX-amp innovation are ] access, are at ] Forge to a Husky a [ bringing hour script to fasteners, innovative batteries exclusive DEWALT any RYOBI with and more customers. And torque great increased all the rounded [ lineup to expansion with and them XR in they [ Depot. value, the of addition more We better bring new more the ] and to Edge, X Milwaukee power our The great batteries Bite technology designed new more ] Home

advocate customers' are that to for in when broad merchandising best-in-class remains products This they it. provide need for our means customers on continuing and assortment of focused available value. Our our organization stock being a

simplify to we the the that, turn to our We That's I'd will the also customers that about continue like to with saving continue product Richard. time I'm excited and to provide call solutions why project, the bring over innovation so market. And to money. innovative

Richard McPhail

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

hurricane-related of in negative positive September During in and August, comps the in the our August, third October. progression X.X% U.S. in comps large with in company part, were our negative X.X%, positive quarter, for comps in the total of reflects, negative X.X% and were negative in Comps monthly October. The X.X% X% comps quarter, X.X% X.X% X.X% with negative of September negative sales. in

a points for basis approximately third approximately Our impacted last XXX approximately quarter, our results million sales, third for total benefits XX.X%, a gross approximately the the as the of the a for by points comps driven from primarily margin third quarter in XX company net year, XX quarter shrink. basis hurricane-related lower decrease include was which by offset $XXX the of points contribution acquisition, basis approximately and October. In quarter, positively partially SRS by from result of mix

points, expense as XX.X% third XX the of the quarter increased XXXX. third approximately basis compared operating to to percent During quarter, a sales of

with was our in performance expense Our operating expectations. line

XXXX. In compared $XX amortization $XXX was quarter, in million, to SRS. the related of million to margin quarter for XX.X% XX.X%, intangible pretax operating quarter asset third including the the Our third was

ago. due Excluding $XXX operating other quarter, XX.X% the a the in by to XX.X%, quarter of debt to than for our tax effective rate third year for quarter, million, increased the the the was XX.X%, expense quarter XXXX. XXXX. quarter in our fiscal margin higher the primarily asset third of to third intangible amortization was XX.X% In $XXX adjusted Interest million third and compared compared to the in quarter balances third

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

quarter per were Excluding XXXX. intangible third decrease a share third the adjusted of our diluted approximately to earnings the $X.XX, of asset for compared X% quarter amortization,

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

Turning to capital allocation.

on approximately business to form the our dividends we the the invested return during invested $XXX quarter Computed XX million months, XX.X% in expenditures. our third for fiscal of debt down During capital back $X.X long-term was approximately approximately average the from into And of beginning ending on paid in equity we XX.X%, quarter, and the third trailing and of capital in shareholders. the quarter, billion XXXX.

XXXX. outlook I will Now comment fiscal on updated our for

quarter improvement in remains performance to from and pressure expected. As you was macro Ted, than better while uncertainty heard our continues home demand, the third

the third quarter, performance we sales and Our fourth sales some quarter. reflects hurricane-related in the expect hurricane-related in

now have Given the better-than-expected our performance guidance. in the third quarter the and to approximately to is incremental growth fiscal including hurricane-related sales, We is period. XXrd updated week. to The billion X%, expected of in week contribute we SRS sales billion incremental add the approximately sales. for XXrd and total sales and expect approximately XXXX projected sales SRS decline Comparable to total approximately $X.X expected X.X% and are $X.X XX-week

We expect approximately new open stores. to XX

be margin to approximately gross is XX.X%. Our expected

and XX.X%, approximately XX.X%. operating be margin margin to operating approximately expect adjusted be We to

rate tax XX%. at approximately effective is targeted Our

$X.X of We billion. interest expect expense net approximately

any our environment. that X% to our $X.XX to contributing share we approximately compared diluted per fiscal compared approximately per to share. We share. contributing market in decline with earnings expect $X.XX with approximately grow diluted fiscal extra believe share share approximately week XXXX the we per earnings adjusted We X% extra will decline per to expect week XXXX, the And

Thank competitive shareholder are faster We and competitive the are questions. for with to your call. our Christine, ready in strengthen and deliver continuing to And you for now customers leverage value. growth strengthen to drive low-cost possession participation market than position to our we our -- invest and position scale today's our

Operator

Scot first from Truist. Ciccarelli comes the line with of Instructions] [Operator question Our

Scot Ciccarelli

[indiscernible]

Isabel Janci

your up. you please? you're repeat Scot, question, breaking Can

Scot Ciccarelli

[indiscernible] you better [indiscernible] but [indiscernible] I because it quite obviously, outlined were than Sales know guys was specific, [indiscernible]

Isabel Janci

to can't you really off. you. sorry cut We hear Scot,

next question, back So we're we'll to you. going to go the to come and

Operator

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

Zachary Fadem

Any basis in X.X% points comp as guide down the So versus DIY the with sales out more the characterize color you business? you would called impacts? QX, Pro? And about about skewed how category think hurricane underlying XX And between implied you on if QX. and then starting impact, hurricane-driven those Richard,

William Bastek

it to that question. Billy, Zach, over I'll Richard of the turn it's then back answer to and half

the Just Think pretty about think hurricane about generators, of to cleanup. events. piece, in terms similar all obviously,

You relates get as communities think our what help about to ready do it those obviously to lumber events. we for

that. Richard So pretty that a all of from to back ready half And as similar product that's obviously, flip it assortment the standpoint. to customers for consumer-driven I'll event. And themselves answer

Richard McPhail

Yes.

Zack, guide So the for talking of about the X.X% just year.

sales, guidance hurricane-related saw across for outperformance that the QX, that of just the country fact exceptional the quarter. in principally we Our most really as by we entire saw well reflects as reflecting driven weather the

full that QX performance is QX basically year sales. of with the the view So hurricane-related some flow-through impact of

Zachary Fadem

larger step needs appreciate your today? Got how still And the needs-based a also, taking bigger getting the much just those buckets done? And through projects it. base brake color fix and And trending are two fair being you the on while discretionary ticket would any business been I of say deferred, color. type are projects to that as back, year? categorize is how it versus have

Edward Decker

throughout that's the ones projects that balance say that deferred, out difficult We've with discretionary parse needs improvement in talked based larger, and project. home are to We been there need engagement year. being are more this about and would getting has our projects Zack, strong Yes. based your consistent discretionary being Pros, done. but are versus certainly always the

Operator

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

Charles Grom

quarter? businesses? the services SRS the also the discuss in Can made volume on touch two contribution then you and cross-selling and products across can in you specifically third the progress And you've

Edward Decker

Sure.

opening with do growth third comp then what existing the and branches of branches, progress They've their M&A. executing we play Job doing our prepared business, is of to as they the remarks. to SRS, new small of business, number They branches. that which would call growing quarter. through in with a through They one my with continued up their them their grew tuck-in pleased they and very couple made we're a opened said support So tuck-in I do acquisitions. even

So as the for strategic expected. proceeding plan game SRS is

cross-sell outside things customers And through make the terrific the we're working on Pro Depot Home through their And growth available small is of opportunity, and the to SRS we're into seeing ecosystem, comp customer on then our On take-up sales of resources. incredible our catalog initial sales product to desk that. The our sales. those specific with triple-digit product a an very their also while obviously, is sort to the we're through accelerating comp base base. beginning largely quote

remember they're focused pools [ hardscapes Now maintaining down putting and in folks then and their trade and on roofers, ] backyards irrigation. working on and specialty landscapers, repairing

sales customers joint some activity, broader very those incredibly days, quote actively However, broader do teams the to customer but engage we've and their each other, know improvement base. on are to customer already begun home working together. catalog Very, calls our going in into well, getting together early some

So out had playing again, the on is early strategic we exactly But thesis hoped. that. days how

Richard McPhail

Chuck, billion $X.X contributed the in on X They're the track we'll billion contribution the for in They that roughly quarter. third you expected for sales And months specifics. asked [indiscernible] $X.X deliver to

Charles Grom

It margins, was points for Richard. gross takes sounds And down of few then the broader about How quarter? And we and last you for gross about I XX which I Great. there mean, it pre-Covid, margin basis on the do just trajectory north lion's On double-click pack? and Okay. margins? was to puts can think share. where that SRS out, on next one Is XX%. to like think was years? relative about over pressure think then basis you, of way the we gross were looking just any points. XX

Richard McPhail

versus look, year impact the margin mix quarter. so was SRS. specifically, actually Well, an last you XX so for impact Sure. look in year-over-year, major simply that the -- was point the from basis impact when gross And

with talk our -- in margin. It just let's expectations. gross So let's was line about

margin year full In the guidance changed. for gross for fact, has our not

we was basis of expectations, around benefits again, see up XX you from so the Ann line that and will points. impact reflected with gross a for about was that on the remainder year the you, and remind also will for for XX was an in just in So business do the SRS will from XX year the owned number SRS about them our But can that math be annualized about QX, is It points basis the and remember, because shrink XXXX. significantly impacted had have point have basis X SRS, margin impact to mentioned. And only months.

allow our everyone our just make second that's points shift profile expected you business. basis adding from gross them sure XX margin a of if got So me in to that,

a Our away largely benefits of we expected that's gross margin, expense from again, be. the Transportation of first was but rather comparisons transportation expense right were or as to half now. where sort decreasing year-over-year flat in the it dynamic year, going

out have But position intention. value chain as shift And and in as year our acquisition conference, the of again, with said, our performance. our model. There's we as margin our were that that laid flat of our business. base margin. [indiscernible] in XXXX, gross essence margin gross But the very a guidance does changed for not the our SRS our productivity a our the gross June so investor pleased as long-term single margin. as customers, supply for team case present goes reinvest at anticipate sharpest reflective operating that's I market a look, And that of we look, we in drives that's our we year in of every we amazing part ton in base full for that said, far the of margin

Operator

Seth comes question line with Sigman of the from next Barclays. Our

Seth Sigman

more specific quarter. like that do context, performance seem Depot's a call here, types this serve share? of you're categories gaining relative better Can doing where matters think Nice improved is all does the share. I you to macro also a and And progress industry customers. you any lot but lot different speak that? your out customer you're the My in you in quarter. and question around Home market Obviously, to main guess it to housing the would

Edward Decker

topic it you to share. in statistics broader market I'll the over pass deeper reported in furnishings, expenditures tough hit to government PC out our than We've Billy. those on results. always negative were at in is parse look and said home, But as if

in we that you say broader macro, we if then would reported So are obviously companies' we the we certain in. those again, competitors those, our And some most businesses would we results. And functioning product macro, look traded we share. look if took you -- of that at level And in Billy, results publicly categories categories? operate outperforming of see highest who from want to hit at on

William Bastek

Yes.

enhancements, team of said in exterior As be some remarks, to helped [ prepared materials. Pro increased model Paint materials, our really share PPG job business just in-store to in that and on talk see That's our for in with And the In includes categories multiple seasonally our our grade you performance, engagement seasonal and performance pleased we our grow progress certainly, service Bayer story paints, on ]. really Halloween. top then great the [ weather quarters we really expansion we continues our a the our that while certainly strong of see called related performance continue out, with we're we us. saw site ], did quarters. the related great across making us there. And with partnerships segment delivery the has multiple about building building that

going of pretty but that But building different And out. materials lot I continued terrific confident ongoing sets, mentioned, mentioned, to that to parse at to the acceleration. a We as very feel hard there. data continue of areas of in look any improvement few we've that's kind share. take specifically, that great, a seen in Ted market, as So we're

Seth Sigman

a what guess I hurricanes, to does you mean categorize we're think that? down certain generators. seem categories rates, It think trying needs really to be ultimately, some helpful. follow-up question would mentioned big I How guess, to it you you this quarter, change do specifically. of do was took mean, in in I your more mentioned even categories light a ticket about election get noise? That's I like you Okay. those there around step interest inflecting? view like

Edward Decker

overall days step just I'll and how And than maybe sales because this garden weather. mean, clearly, Pro environment is nice. because October, with just weather it Think job a weather our uncertainties that day watch continues don't what dry of of -- quarter, forget on said, a projects. not in at more the from as can the rate lot the site favorable virtually What continue and you're look in or be every pressure environment were back It's remodeling the we're issue limited to out higher loss they hurricane-related macroeconomic we doing the during we throughout through seeing. I we we on country. The expected demand. the was that to larger

navigated pull That's we pandemic. the So demand way out. saw its reversion during we the through And forward that look largely services. largely to way goods we've our at the of personal consumption worked from of

home this debt-financed the well today, as rate larger normally again, pressuring higher remodeling sales. projects So as existing environment is

about rates, have from XX know two mortgage basis the all that cycles we So the cut increased interest actually cut rates in points. September, here. Feds But

and worst which are XX-year to point. at this a that And behind the X.X%, going go? we're you is impact XX about the might X% low So basis combined therefore, yet That us, were turnover. basis of points. are up over, then turning XX-year housing about X% points, much Usually, how cuts rates XX just of two the homes about rate turnover continues say mortgage to we which at is lower

we of touched on I sort think X.XX%. actually

So down. financing or equity near one there. But are could financing, then the we're it's home lines argue the cash of low larger out credit, projects whether often require those

drop the track directly in more those HELOCs, rates. our So short-term

basis but over So X%. at those points, high are still down XX historically

what the Billy is So that, shoots, the for if of larger that pull categories remodeling with those certain one business just forward starting we're its with working looking through. But way just projects. in the encouraged through, went timing with will, green is you we're the homeowners

interest super as the there work So think But pressuring rates current We'll improvement. outlook and and through return and demand. a have to macro the equilibrium quite to way on remodeling for home we're all will yet. We after market markets we this just don't is bullish this improvement our uncertainty home remain well.

Operator

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

Steven Zaccone

I gross wanted to follow up margin on briefly.

around higher up So from to was sales? And on a quarter, just of amount in mix pressure gross any good margin theres there follow then the longer the discussion term, hurricane-related the on shrink.

a that's could term? over XX medium an points? understand opportunity Can basis something the be time? meaningful how lot Is in something made us more it there. Or much is you of this You've to progress that the help of over XX

Richard McPhail

Right. Yes.

So as slight through pressure quarter, was it, lower and then mix hurricane margin cleanup, volumes margin at prep higher margin the about characterized amount as the of just gross there gross goods. how you're selling and for far goes to Billy of of just think beginning a

the environment retail. It's you crime. This any of investments is led off. theft all quarters our getting are there. And year-over-year. And in we pressure multiple a head teams mean now of are, financially, the frankly, organized problem down and number What They've made day. hard there just that single investments essence, hard tell so just from every initiatives as far does other back to of amazing quantify. That retail was so investments, operating paying brought is but some are made. easier. Tangible is to in we of not results they to They not the slight forward and shrink working also as goes, the have look, that benefits come we've major results can for

In getting fact, it's and harder harder.

teams, our it's are to off our everyday are hats initiative and that teams single fighting our every day. an So

Steven Zaccone

at you neutral. know today. we I'm net the like to I was the I question, for was curious look backdrop, XXXX as housing there's as going follow-up view guidance be like My But think 'XX Understood. Yes. -- no

the here still to sit you Or As tough of rates, the for as think think would today, you call you but little kind neutral is it's bit like kind as 'XX, backdrop as housing it net turns case think about favorable of base a housing scenario? more you? about

Edward Decker

be would under repeat at the reported I [indiscernible] just not a ready call a settling we low, environment argue know that don't to One this turnover, Well, Steven, to down here the on I'd sit but just 'XX projects. comments certainly rate obviously even not as could in remodeling that period X% turn made. ready and talk larger today is and about is

Operator

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

Scot Ciccarelli

the outlined Richard, for of sales, give guys impact the is in a you hurricane-related impact magnitude capabilities an out you those XX incremental issues. know then are difference just rolled the the the you've quarter? And for having? capabilities I in can us rest there broader the I second, base, can performance better Pro markets apologize the but that estimate of of impact we idea so tech in the understand weather versus where of the

Richard McPhail

across country. So for your question, Scott. the of we part Look, weather had outstanding the first

control out harder you it what So to a weather don't literally becomes is when have group. parse the impact

like. sun and However, was we inspiring know when the for to outdoor merchants our operators projects a were engaged, that's shining, to customers the huge our and and our testament do them

we're just will therefore, market... maybe And about given to And talk -- favorable parse truly with Chip cautious Ann, the across how the out weather. respect QX to hard was extrapolating country. it's weather So

Ann-Marie Campbell

turn over share and think jump Pro, opportunity with we But we've across about invest little and complex the a mentioned, wallet end-to-end of Hector. it I'll to greater the and we in, as I'll experience. tremendous just as Chip,

to we entire store. ecosystem, think the have we the when a today, And business. the We Hector capabilities on in-store complex the And is of have lot inside and a great experience his team the Pro. with a of doing we the side to that great stores, what it about outside have doing I and work of previously across great with want about talked want highlighted we're experience

on an are have initiatives we your about engage point, they simultaneously. To of working important that more we're a be as these experience where ensure the upside. And the for we with capabilities, think excellent us, to our the So markets seeing we we XX to build level confidence. tremendous it's delivering

you if over things turn work some on So to Hector some capabilities. it to he's you continue Chip, I in know on store. doing the of And key

Chip Devine

what's our those and investment ecosystem delivery and where gains been The investment in outperformance the very 'XX breadth our markets. in led Thanks, low going that supply sales building has Scott, single share of we're chain, depth markets foundational to and inventory, out Ann in digits importantly, all Ann. capabilities, markets, in on And force encouraged we've in referenced. that those

pleased. very very, So

As our best very of Billy customers are are that mentioned, our interacting with customers. ecosystem these some performing

projects trade where participate we've an offering launched it to been in we example, but as credit is really our Just we've cannot normally some and share it's in. early take days, that of our resonating with the customers, able

happening. Hector? what's with pleased very So

Hector Padilla

]. just value and from teams of for needs, that that super we the the large with products we for we the our just experience integrating Scott, that are year in-stock And are store outside team are quantities experience. in-store our to for our engagement We're that on and [ of of mentioned and resources adjustments some a half sure the the engagement I on Yes. would pleased and second the leaders focused Ann Pro, to strategic features drive driving having great also the going and to the Pros, customers the drive checkout tools in-store in into made of laser Pro. that add for Pro [indiscernible] Chip making driving there developing that

and beyond. like So in those the together just is how ecosystem coming we markets

Operator

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

Michael Lasser

rates the more lead that that soon longer multiyear as Ted, improvement the projects? are the you looking to will outlook are elevated, remain homeowners home deferring recovery. at as more come robust down, And rates as a that

home year, the I improvement right a there's as relationship part down guess XXXX? that, the magnitude and recovery? And can now the what's rates happening So industry grow in between of come next don't of if

Edward Decker

been XX% turnover quite have imagine. high. like right They've extraction. think HELOC you but something about is certainly, pressured extractions. We that mean Michael. period bit, a of Yes, specifically even extraction most recent I rates can HELOC more as now

impacting. activity And when weeks, of talked that towards So I'm up. ago, when rates were matter not months immediately about sure seeing just rates we came But rates went a the that in actually change housing. we we've down saw clearly, X% are before this latest

there's are people get this rate be were wait at stability so and where bit caused if certainty that you to sort think has much down going might a of that But of lower little discussion that for at going rates of the point. more about rate. important any they I

historically gradual probably we talk of of will simply the Either So rates once drops decent to still higher I that need think and there's equilibrium get set used don't big rates or the a and rates, dramatic rates, need easing a pretty coming settle continue. but drop. people and cycles market just in. will are which are the We life

drop rate formation, meaningful this seen size such household will time of rates be reestablished. We've is housing in be a increase that to just dramatic New second increasing followed normal period that we've short-term argue now size change that had of in homes, by what for short value, a increase in of expectation of decreasing of activity stable home, very home, over equilibrium low. be years and rates a that could turnover years a

stabilize what national to drop meaningfully. the sort to and gets just quickly don't the your talk of They answer do all I need question, to of is again, conversation. and going So to have the they of think, Fed out that

Michael Lasser

is, My I That's very perspective question tariffs. helpful. get team's you. to on the want Got follow-up

sales increase Depot cost to of spending? the of China? part in in tariffs reaccelerating is potentially bigger And and of The other on sheer impact Home what for impact consumer as tariffs So inflation or the merchandise percentage be countries? And to from indirect from that related that, the about subject what could risk

Edward Decker

the XX% countries. and of was industry from of of years goods be And impact. scale, given in couple let distributors chain on an tariffs will but of the some industry-wide be foremost, ago, work Asia back than North Billy you to type been of on a America, Deaton, type on I certainly tariffs. I some we John, differentiated against why source well John Southeast going hundred has previous bet Billy retailers are of input? more whatever this runs different team's It our goods. concentration number import suppliers won't of a an and half have a will dollars others a manner , than to in tariffs discriminate of our product going impact. The through importing as experience guess the I'd happens I'll an who and in but diversification on it domestically our this billion But there give and the in a comment would Sure. in goods supply don't work bit China industry. But again, ability our through say, with and clearly, who first industry sources, There those same and is generally sourced particular. We in

William Bastek

Michael, Yes, it's Billy. Thanks.

this teams how we'll As new through before. manage through been our tariffs Ted we've I anticipate mean, the done mentioned, have any this similarly to We in past.

and been our I hand we're years, of that But on on. are assess to America. and other the sourced mean North to I'll focused forward. And majority some focused John. in the for mentioned, things frankly, on Ted As John it sourcing several And we've there's diversifying that. team continue goods also that listen, focused going we'll are

John Deaton

that experience have policy, the we terms in in confident to move future. said, any as focused disruptions these have of through area and of to lot our our able East through ability manage Coast implications product a these is our this of we're very the on term, near situation resolution ability to we of port in and -- through types in might More Ted of types Billy Yes. chain with come manage on feel changes to is terms and trade whatever being and the supply of

Operator

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

Simeon Gutman

QX. short-term on First, to QX a question

weather about it's well. the helped exceeded QX, There stacks a thinking hurricanes. it was In looks on like weather, mentioned and to decel QX obviously, You as and number. expectations, you the the movement mentioned that absolute ex

the conservatism Or into that some So quarter? there is that is things change or the helpful? less fourth other weather is assumption any

Richard McPhail

from Richard. It's We're decelerate. we line, results a about business And that for our is fundamentals comp extrapolating reminder, as the approximately also, just cautious Look, sales. Simeon. Thanks, a to of significant negative guide X.X% bottom weather. just the being saw don't benefit QX expect

Simeon Gutman

in capable And recently, thinking. it like in idea how about equity on you're is you're this capable get turnover, thinking macro, a talked I a rates helpful by regard. of in? that to that of impacted call sense a become in kick weight lot being even know like And rates. this equity, enough. both could The that Fair terms point, trying was effect about Okay. does second, of Can this higher? kick we've something lock-in But versus are some which with housing at the when

Edward Decker

rates. But delayed and citing more over don't of macroeconomic the does posed move, is -- that been haven't to effect. even issue importantly, to were that people take when if housing the more us, you often seen and rates, surveys uncertainty. moving, remodel cost months, project higher the hey, we place in higher then while were in has question obviously turnover, Yes. or decrease And repair And remove point several the surveys would the the in clearly, we've our And general and more than our you The prior spend. even place. we with #X there's the political

dissipate, think HELOCs those as with see lower I you'll rate, So people, are variable. again, the

here with we're December, the amount trillion. capable since It doubled So a to assuming trillion the XX in T. of just huge under since nearly That's I cuts. 'XX. going another went basis to of [ equity. get ] down the end points X from mean cut those And are $XX.X

[ folks down So equity. Recall billion now much back XX were taking quarter, housing [ boom, we're more out capital XX, a of That $XXX ] tremendous a quarter. recently was quarter. think as a I to XX as the in ] amount and

macro I $XX,XXX, it And in and we're into the in decision So someone for that confidence a dynamic, project. amount goes goes to lower much hope overall confidence certain that. change toward some would a a And of $XX,XXX, there's on headed one when project, confidence trigger pull that make levels. the that think back people to political don't big it's get $XX,XXX

Isabel Janci

time question. more have one we for Christine, And

Operator

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

Steven Forbes

force cross-selling monitoring Ted, the you're maybe gaining the the explore from SRS. learnings over opportunities But some there. around I of sales at wanted to color appreciate I

maybe your thinking So can is SRS sales to the scaling on about tracking and us the at how large you're decision HD? today force you're what force inform sales remind you how at on

Edward Decker

Right.

force is they in about They and account confidence us terms have market. capabilities force approach of their X,XXX how people. inside of compensation, has our how So do in they managers. structure management is outside it, to do in and what what observing of also It's we terms given sales and variable sales go

market. hundreds unlock account. is account, All of from use we're outside wouldn't open for on doing. Chip credit. a desk you at on sales we've managed, this tools multiples at that folks. a purchase their at hundreds again, of Credit that in card introduced, to a go And putting mentioned just house the of Pro Home a are clearly, type are to they credit the just the almost sales the it's huge as They of what So that it time, compensated, they're and the is seeing all store. and much these Depot get we're larger way customers and purchases, reinforcing we're much, projects larger

learnings. with great SRS well. yes, really, regularly Chip and team sales the and really in his going are So just team contact

Steven Forbes

just on the behind update line thinking time you maybe just And the delivery the order then us rollout system? Can capabilities current a maybe that. within or follow-up on quick full of management [indiscernible]

Chip Devine

future are pros that for a us as roll to reserve is of reservation, being big win. it's plan larger delivery There's speak, management that be is management key to Chip. inventory elements win manage on projects by out a order inventory for We able Steve, including to the as XXXX. which of end we order turned

light course completion year. the the through the end of that of with we'll XXXX at up So

Operator

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

Isabel Janci

us in with call you Christine. for you Thanks, forward fourth all Thank look quarter to our We joining earnings today. on speaking February.

Operator

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

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

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