Home Depot Inc at Goldman Sachs Global Retailing Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kate McShane - Goldman Sachs - Analyst : Thank you so much for joining us. I know when we were talking to investors about what they wanted to hear today from Home Depot, obviously, the macro is a big piece of it. And obviously, it has been a challenging environment for housing specifically. But also, the consumer is dealing with a lot as well separate from the housing environment. So I wonder if you could maybe start talking through what you've seen this year in terms of consumer behavior? How much do you think is housing influenced versus maybe the macro being influenced?

Question: Kate McShane - Goldman Sachs - Analyst : And just drilling down into a couple of things. You said, obviously, housing turnover is the big headwind and that is affecting more remodel, but what about repair. So if the housing turnover does kind of bump along the bottom here, you don't see any relief over the next year. Is there some combination of needed repair? And maybe even pent-up demand because transactions have been negative for quite some time now, where you could return to growth in a scenario where housing turnover doesn't fully unlock?

Question: Kate McShane - Goldman Sachs - Analyst : And then if I can just kind of round up the macro conversation that I think in the past, you've talked about the sweet spot for mortgages maybe coming down to the 5% to 6% range to maybe see that housing turnover unlock. But what kind of lag would you expect from that? Would you expect to see business come back right away? Or would there be some kind of lag?

Question: Kate McShane - Goldman Sachs - Analyst : Okay. Could we maybe talk about the dynamics around DIY and DIFM? DIY has remained challenged. I think the Pro is still outpacing DIY. Can you talk about the dynamics there and why you're seeing more pressure in one versus the other? And Billy, I wondered if there were any category differentials between the two categories in terms of performance and strength?

Question: Kate McShane - Goldman Sachs - Analyst : And you've mentioned market share gains a couple of times. I think before the pandemic, I remember, the comp bill to be something like in line with GDP plus a little for market share. How are you thinking about market share contribution to the comp today? Has it accelerated? And how are you gaining that share and from where?

Question: Kate McShane - Goldman Sachs - Analyst : You mentioned SRS, and that's probably, I think, with regards to our investor questions where we're getting the most questions. So I wondered if we could maybe back up a little bit because I think the SRS acquisition was done in an effort to grow your complex pro business. And I think we start to hear more about the complex pro at your June Analyst Day 15 months ago or so. Could you maybe level set us and just talk to us about who the complex pro is and what you're trying to accomplish with this specific customer and the role SRS is playing in going after the complex pro?

Question: Kate McShane - Goldman Sachs - Analyst : And then for my last question before we get into the lightning round of questions is, how does the supply chain work into the complex pro strategy? You had made a very big investment in your supply chain for a multi-year period, I think ultimately, so you can deliver to the job site high level. So now that that is completed, how do you see that working with to accomplishing what you need to do with the complex pro? And is there a lot more room for efficiencies and innovation when it ¡ I'm sorry, automation, when it comes to the supply chain?

Question: Kate McShane - Goldman Sachs - Analyst : Great. We're asking five questions for every company. Some are more applicable than others, depending on who we're talking to. But to start with, expectations for the environment in the second half of 2024 relative to what you've seen in your recent results, better, worse or the same?

Question: Kate McShane - Goldman Sachs - Analyst : On the topic of margins, and this is more of a '25 question, but materials and labor and then maybe tariffs. Would you expect these cost pressures to be the same, better or worse next year?

Question: Kate McShane - Goldman Sachs - Analyst : Okay. Do you expect to have more or less points of distribution in the US next year? I feel like, I can ask this now if you guys because there's more distribution coming, right?

Question: Kate McShane - Goldman Sachs - Analyst : And new stores.

Question: Kate McShane - Goldman Sachs - Analyst : Great. And the last quick question, you guys are EDLP, you're not very promotional. But just as you look towards the back half of this year versus last year, how do you view promotions, both for Home Depot and in the industry?

Question: Kate McShane - Goldman Sachs - Analyst : Great. Well, thank you for being with us today. Appreciate the time.

Question: Kate McShane - Goldman Sachs - Analyst : Thank you.