The Home Depot Inc (HD)

“And as we expand our e-procurement capabilities also with construction management software and integration platforms, we'll be rolling Pro Trade Credit out to those channels also within the second quarter.”

“As it relates to incremental acquisitions, we would expect to build HVAC into, call it, SRS' fifth vertical, and we would look to add geographies of the key manufacturers with modest -- these would be modest full-time acquisitions to that HVAC vertical platform.”

“So as we move through the year, you're still going to see pressure on a year-over-year basis in Q2, not quite the degree that you saw in Q1 and then improving significantly more really sort of flattish year-over-year when you get into Q3 and Q4.”

“Most of those are guaranteed contracts, including commercial sales from Home Depot relationships that SRS will now do roofing on a number of our warehouses, and we would look to double that next year.”

“And we would say this year, we're looking at something like $400 million of cross-sell run rate.”

“And as for storms, as you mentioned, we did have 56 basis points of impact in Q1, but that will dissipate throughout the balance of the year.”

“Yes, we're not looking at a marked improvement in underlying demand. We are looking at a higher comp in the second half of the year, and that is solely driven by a return to normal store activity.”

“We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2026.”

“We expect our diluted earnings per share and adjusted diluted earnings per share to both increase approximately flat to 4% compared to fiscal 2025.”

“We expect net interest expense of approximately $2.3 billion.”

“Our effective tax rate is targeted at approximately 24.3%.”

“Further, we expect operating margin of approximately 12.4% to 12.6% and adjusted operating margin of approximately 12.8% to 13%.”

“Our gross margin is expected to be approximately 33.1%.”

“We plan to open approximately 15 new stores and 40 to 50 new SRS locations.”

“For the year, we expect SRS to deliver mid-single-digit percent organic sales growth.”

“We expect to continue to grow our market share and for our comp sales to range between flat to 2% growth with total sales growth of between approximately 2.5% and 4.5%, reflecting the contribution of the GMS acquisition, new stores, branches and tuck-in acquisitions.”

“We expect to complete this transition in all stores by the end of fiscal 2026.”

“And that's a little bit of a change as we've seen in some of the areas around appliances where it's a little more duress related at this point in time. But a similar composition, as I mentioned for the last quarter, and we look to see a very similar performance in 2026.”

“As Billy said, for 2026, you're likely to see ticket reflect that 3 percentage point increase in retail as we end our -- or really are essentially done with our price actions.”

“And once we return to an excess cash position, which we anticipate will be sometime in the first half of 2027, we would expect to return to share repurchases.”

“Second, we expect gross margin to be down by about 24 basis points year-over-year, reflecting the annualization of GMS.”

“First, we expect our comps in the second half to be slightly higher than our comps in the first half.”

“We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2026.”

“We expect net interest expense of approximately $2.3 billion.”

“Our effective tax rate is targeted at approximately 24.3%.”

“Further, we expect operating margin of approximately 12.4% to 12.6% and adjusted operating margin of approximately 12.8% to 13%.”

“Our gross margin is expected to be approximately 33.1%.”

“We plan to open approximately 15 new stores and 40 to 50 new SRS locations.”

“For the year, we expect SRS to deliver mid-single-digit percent organic sales growth.”

“Looking ahead to fiscal 2026, we expect total sales growth of approximately 2.5% to 4.5%, comparable sales growth of approximately flat to 2% and adjusted diluted earnings per share to grow approximately flat to 4%.”

“And Zach, what may drive us to the lower end of the range would be if the market is not performing as well. And the #1 driver of that would be continued consumer uncertainty.”

“and believe we took share in Q3 and year-to-date this year and do the same thing in Q4.”

“Well, thanks. As Ted said, the underlying demand for the business was sort of similar Q2 to Q3. If you talk about storm Q3 to Q4, we absolutely are lapping strong results, in fact, even slightly higher sales last year in Q4 than Q3. Let's call it relatively even. So let's say, you basically, if you've got underlying minus the storm impact, you've got pretty much similar run rates for Q3 and Q4.”

“So I'm just going to avoid all the steps in the math and tell you, on a fiscal year perspective, you've got about a 55 basis point impact to gross margin year-over-year, reflecting the ownership of both SRS and GMS and about a 35 basis point impact to operating margin mix, reflecting the year-over-year comparison of those ownership periods of SRS and GMS.”

“So now here we are going into Q4, and we're going to see even more quarter-over-quarter pressure from the storm activity.”

“We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2025.”

“We expect net interest expense of approximately $2.3 billion.”

“Our effective tax rate is targeted at approximately 24.5%.”

“If you talk about storm Q3 to Q4, we absolutely are lapping strong results, in fact, even slightly higher sales last year in Q4 than in Q3. Let's call it relatively even. So let's say, you basically -- if you've got underlying minus the storm impact, you've got pretty much similar run rates for Q3 and Q4.”

“So we'll have even more storm pressure year-over-year in Q4. And then we just don't see the catalyst to increase that underlying storm adjusted demand in the market.”

“We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2025.”

“We expect net interest expense of approximately $2.3 billion.”

“Our effective tax rate is targeted at approximately 24.5%.”

“No, we look at SRS as a long-term mid-single-digit grower. And this is principally a storm impacted dynamic that's taken them down to flattish right now.”

“On the branches, think of SRS GMS, 40 to 50 branches a year, and they've been sort of running at that pace since we acquired SRS.”

“So no, we look at SRS is a long-term mid-single-digit grower.”

“At the same time, our guidance for the remainder of the year, as I said, doesn't assume any improvement in the outlook for larger projects or a turn in housing per se.”

“The U.S. business will be more or less a similar comp rate with no meaningful lift necessary, and we get that swing of 80 basis points of FX pressure for the total company.”

“Now some of the important goods, obviously, tariff rates are significantly higher today than they were when we spoke in May. So as you'd expect, there'll be some modest price movement in some categories, but it won't be broad-based.”

“From an FX perspective, the total company had a 55 basis point headwind from FX in the first half. At current FX rates, that actually flips to a 25 basis point tailwind.”

“We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2025.”

“On a fifty-two-week basis, adjusted diluted earnings per share would be essentially flat compared to fiscal 2024.”

“And we expect our adjusted diluted earnings per share to decline approximately 2% compared to fiscal 2024.”

“We expect our diluted earnings per share to decline approximately 3% compared to fiscal 2024 when comparing the fifty-two weeks in fiscal 2025 to the fifty-three weeks in fiscal 2024.”

“We expect net interest expense of approximately $2.2 billion.”

“Our effective tax rate is targeted at approximately 24.5%.”

“Further, we expect an operating margin of approximately 13% and an adjusted operating margin of approximately 13.4%.”

“Our gross margin is expected to be approximately 33.4%, essentially flat compared to fiscal 2024.”

“We expect total sales growth to outpace sales comp, with sales growth of approximately positive 2.8% and comp sales growth of approximately positive 1%, compared to fiscal 2024.”

“And we expect them so for the quarter, SRS actually exceeded our expectations. They delivered $2.6 billion in sales. And we expect them to meet our expectations of mid-single-digit growth for the year.”

“The last initial build of the technology work to build more agile order management. And that should only improve our on time and complete and speed metrics.”

“We see in our business we intend to generally maintain pricing across our portfolio. We'll continue to use the portfolio approach that we've talked a lot about in the past, but we don't see broad-based price increases for our customers at all going forward.”

“We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2025.”

“And we expect our adjusted diluted earnings per share to decline approximately 2% compared to fiscal 2024.”

“We expect our diluted earnings per share to decline approximately 3% compared to fiscal 2024 when comparing the 52 weeks in fiscal 2025 to the 53 weeks in fiscal 2024.”

“We expect net interest expense of approximately $2.2 billion.”

“Our effective tax rate is targeted at approximately 24.5%.”

“Further, we expect operating margin of approximately 13% and adjusted operating margin of approximately 13.4%.”

“Our gross margin is expected to be approximately 33.4%, essentially flat compared to fiscal 2024.”

“We expect total sales growth to outpace sales comp with sales growth of approximately 2.8% and comp sales growth of approximately positive 1% compared to fiscal 2024.”

“We are already taking action and anticipate that 12 months from now, no single country outside of the United States will represent more than 10% of our purchases.”

“Now, obviously, we think that that will increase.”

“we expected this to be cash accretive within the first year of of of of ownership, we'll be, you know, coming up on that first year anniversary soon.”

“So think about twenty twenty five, we we're focused on really maturing the capabilities in these seventy markets, which is really important.”

“SRS will grow fast than the core, and we believe they're taking share in each of their three verticals.”

“We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2025.”

“We expect our adjusted diluted earnings per share to decline approximately 2% compared to fiscal 2024. On a fifty-two week basis, it would be essentially flat compared to fiscal 2024.”

“Our gross margin is expected to be approximately 33.4% essentially flat compared to fiscal 2024.”

“for the year, we expect SRS to deliver mid-single digit organic Growth.”

“We expect the underlying momentum in the business that we saw in the back half of 2024 to continue into 2025.”

“We expect their organic sales to grow mid-single digits in fiscal 2025.”

“Once this market normalizes, we would expect a base case of three to four percent top line growth We would expect and and and within that, we expect flat gross margin is kind of a base expectation.”

“We will complete That program this year will be the third year of the program. We'll complete it by year five, which is twenty twenty seven.”

“Look, bottom line, we don’t expect the fundamentals of our business to decelerate.”

“And, just to remind you, SRS will be for the year 2024, it will have about a 45 basis point impact on the year because remember, we will have only owned them for about seven months. But, an annualized number for SRS impact to gross margin is about 70 basis points.”

“In essence said, look, we anticipate flat gross margin as part of our operating model.”

“So, Zach just talking about the guide of 2.5% for the year, our guidance really principally reflects the outperformance that we saw in Q3 driven by hurricane related sales as well as reflecting the fact that we just saw exceptional weather across the entire country for most of the quarter.”

“We expect net interest expense of approximately $2.1 billion.”

“Our effective tax rate is targeted at approximately 24%.”

“We expect operating margin to be approximately 13.5% and adjusted operating margin to be approximately 13.8%.”

“Our gross margin is expected to be approximately 33.5%.”

“We expect to open approximately 12 new stores.”

“The 53rd week is projected to add approximately $2.3 billion to total sales and SRS is expected to contribute approximately $6.4 billion in incremental sales.”

“So, don’t think it goes much lower.”

“We don't see the need nor are in the environment where we need to be more promotional.”

“First and foremost, we will invest in the business and expect capital expenditures of approximately 2% of sales on an annual basis.”

“we would expect the cost levels from where we are today to largely hold as well as the retail levels.”

“the acquisition of SRS will be cash EPS accretive in the first 12 months of ownership as we said in March.”

“We expect them to, again, book single-digit growth in the entirety of the year 2024, even though we'll only own them for seven months.”

“We expect to open approximately 12 new stores.”

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

“Well, the primary factor is actually AUR, which we just outlined. So if you think about pressure going from the beginning of the year in Q1 of 2 percentage points to sort of falling to zero by the end of the year.”

“I mean, we would expect to over time to be in we often talk about the top 40, kind of 80-20 rule of demand in our space, and that would be the expectation.”

“After investing in the business, we plan to pay the dividend and it is our intent to return any excess cash to shareholders in the form of share repurchases.”

“First and foremost, we will invest in the business and expect capital expenditures of approximately 2% of sales on an annual basis.”

“We expect net interest expense of approximately $1.8 billion, and our diluted earnings per share percent growth is targeted to be approximately 1% compared to fiscal 2023.”

“Our effective tax rate is targeted at approximately 24.5%.”

“We expect operating margin of approximately 14.1%.”

“Our gross margin is expected to be approximately 33.9%, an increase of approximately 50 basis points, compared to fiscal 2023.”

“Total sales growth will benefit from a 53rd week and we expect the 53rd week will contribute approximately $2.3 billion in sales.”

“We expect total sales growth to outpace sales comp with sales growth of approximately positive 1% and comp sales of approximately negative 1%.”

“Later this year, we will enable job site pickup or returns back to our FDC, which will be a game changer for Pro shopping experience.”

“As you heard last quarter, we'll have the foundational elements of our ecosystem in 17 markets by the end of the fiscal year.”

“we announced our commitment to reduce fixed costs by approximately $500 million to be fully realized in 2024.”

“So we're in early days, as Anne mentioned, piloting a number of different customers, but plan to grow and expand that through the next couple of quarters as we automate that into our selling system as well.”

“the managed account customer who is engaging in the ecosystem that we're building was the highest performing customer segment in Q4 and throughout 2023, and we would expect that to continue into 2024 as well as we continue to build out the capabilities.”

“We anticipate the second half coming in slightly better than the first half, with both being negative, at least as implied in our guidance.”

“With respect to '24, first, we expect a normal seasonal curve for our business.”

“Well, first, I certainly want to center you back to the comments we made at the Investor Conference in June where we call out a base case once we return to market normalization, a base case of 3% to 4% sales growth, flat gross margin, an assumption of operating expense and operating margin leverage and growth and EPS growth of mid- to high single-digit percentages.”

“As we mentioned at our Investor Conference in June, we plan to open approximately 80 new stores over the next five years.”

“Higher interest rates at the beginning of 2024 relative to last year will likely continue to pressure demand for larger projects.”

“We will stay committed to EDLP.”

“We have taken a number of actions that will help us realize the previously announced $500 million in annualized cost savings in 2024 and are fully confident that we will deliver on this commitment.”

“There is only 1 quarter left in the year, we believe the endpoints for our previous guidance range are no longer likely outcomes.”

“Our performance in the first 2 weeks is on track to achieve our full year 2023 guidance.”

“We expect interest expense of approximately $1.8 billion.”

“Our effective tax rate is targeted at approximately 24.5%.”

“We continue to focus on driving productivity in the business and feel confident that we will realize the previously announced $500 million in annualized cost savings in 2024.”

“We have that in what we consider pilot stores across every single region. And we expect that to be rolled out later this year.”

“And as we called out just on the lumber piece alone, we will see that abate as we get to the back half of the year, and there will be much less of an impact than we saw in the first half overall.”

“But beyond commodity and the fact that we don’t have increased inflation, we are not expecting a deflationary environment.”

“We still expect that the overall year will have a net inflationary impact on our costs in retails.”

“We don’t expect that we’re going to need to make that outsize of an investment in the near-term planning horizon.”

“In a market-normalized case with 3% to 4% top line growth, in a normalized case, we expect margin expansion based on operating expense leverage that would lead to mid to high single-digit EPS growth.”

“We expect interest expense of approximately $1.8 billion and we are anticipating between a 7% and 13% decline in diluted earnings per share compared to fiscal 2022.”

“Our effective tax rate is targeted at approximately 24.5%.”

“We are targeting an operating margin between 14.3% and 14% for the year.”

“We expect fiscal 2023 sales and comp sales to decline between 2% and 5%.”

“And then on the operating model, the store and labor, that will always leverage with growth.”

“Well, as the pricing normalizes year-over-year, you will see the units reflect in that as we get towards a more rational state that we had in the back half of last year.”

“For the total year, we think lumber deflation impact to the comp is about 100 basis points.”

“And so implicit in our guide is the expectation that we will continue to take share.”

“If you think on the product side, with transportation in particular, you will see significant costs come out as we work through our current inventory levels with the higher transportation rates experienced during COVID.”

“When we talk about the shape of the year for the negative 2 high end of the range, we would expect that the second half would be better than the first half, really due to lumber normalization in the second half on a year-over-year basis.”

“Now commodity prices those price essentially weekly, and we will price those up or down on a weekly basis. But price levels in a number of our products have increased and been established over the past 3 years and embedded in that higher ticket is innovation... So we don’t see those deflating broadly as we work through this period of moderation.”

“Product cost inflation has decreased but does persist above historical levels. Transportation costs should actually be a tailwind.”

“For 2023, we're targeting gross margin that's roughly flat year-over-year.”

“The outperformance of the prior two years was that we didn't see that much sensitivity. The consumer, our customer was much more resilient sort of purchase through that elasticity curve if you will. What we are seeing now is some more sensitivity and we had almost an exact one-for-one offset in Q4. That's what we're expecting for 2023, that there is still inflation.”

“At today's current price, this would imply more pressure in the first half than in the rest of the year.”

“Outside of this target setting, if lumber prices remain at current levels for the remainder of our fiscal year that would equate to approximately 100 basis points of pressure to comp sales and an insignificant impact to earnings.”

“Over the long run, we always expect to grow operating income faster than sales.”

“We’re expecting a great Q4 with Cyber Monday and a big part of that is our digital performance, our app performance.”

“And we expect mid-single-digit percentage growth in diluted earnings per share compared to fiscal 2021.”

“We expect our fiscal 2022 operating margin to be approximately 15.4% for the year.”

“We expect comp sales growth of approximately 3% for fiscal 2022.”

“And then lastly, and Hector referenced this, our flatbed distribution centers that will finish the year with about 15 or half of our intended goals are right on track.”

“Our original plan was to open up 150 new buildings. And while many of these will be complete by the end of this year, some are going to take us a little bit longer, and that's a function of our HD Supply acquisition, which we paused and reevaluated our needs in facilities that serve similar capabilities as well as some of the impact that we had associated with COVID.”

“There's no change in our capital allocation philosophy or approach. We will continue to return excess cash to shareholders.”

“We typically lever operating expenses into the very low single-digit comp. And we would always expect to do so, leveraging operating expense is a part of our financial model and been a part of how we do business.”

“If we have a couple of years of holding serve, if you will, on this incredible price appreciation in the home, we don't see that impacting demand.”

“And we expect mid-single-digit percent growth in diluted we expect mid-single-digit percent growth in diluted earnings per share compared to fiscal 2021.”

“We expect our fiscal 2022 operating margin to be approximately 15.4% for the year.”

“We expect sales growth and comp sales growth of approximately 3% for fiscal 2022.”

“And frankly, when we -- given the strong first half and the strong second quarter, to reaffirm guidance, which implies a lower comp in the second half, that's really the question for us.”

“It does assume some level as -- it assumes that inflation persists at current levels and that we may see a slightly greater offset in transactions through the year.”

“For the year, we believe that gross margin, if you just sort of stay mix-neutral, gross margin will see slight pressure from the investments we are making in One Supply Chain.”

“we plan to continue investing in our business with CapEx of approximately 2% of sales on an annual basis.”

“We expect comps to be stronger in the first half of the year than the second half of the year.”

“But as Craig said, we're not forecasting any further inflation, same way we don't forecast commodity inflation. We just start the year where we end the year, and we assume neutrality.”

“first, to grow the business to $200 billion in sales, which represents incremental growth of approximately $50 billion from where we are today; and second, and just as importantly, deliver best-in-class operating profit dollar growth and return on invested capital.”

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

“Candidly, we do not expect October acceleration at the rate that it was.”

“There's a lot of the season to come, so we're certainly pleased with the response to the gift centers I mentioned in our decorative holiday program. The Christmas sets are following the strength of the Halloween, but we're earlier in the ramp up towards where the volumes come in starting next week, Thanksgiving week so, a lot to go in the fourth quarter, but the ramp looks good.”

“As we have mentioned on previous calls, we plan to continue investing in our business with capex of approximately 2 % of sales on an annual basis.”