HD Earnings Call Summary - Home Depot (NYSE:HD)

Tuesday, May 20, 2014,

Home DepotHD

released its first-quarter earnings for 2014 this morning, and in a earnings conference call, Home Depot management discussed the impact the weather had on performance, operations, and future operations.

Weather Impact

Wasn't able to quantify what effect the weather had on performance, but spoke in a qualitative manner about the performance of the company during these storms.
Management's 2014 sales plan is based on U.S. GDP sales forecasts and the assumption that normal weather would be expected.
Management expects to see first-quarter revenues that were hindered by the storm to come up in the second-quarter.
With infrastructure damaged as a result of the storm, management expects to increased demand to repair these problems increase revenue for stores in the upcoming quarter.
Management expects the harsh winter affected comp. sales by -100bp.

Operations

Expects fiscal 2014 sales to increase 4.8%.
With improved weather, the company is seeing improved business in seasonal business areas.
Management expects the current inventory of $500M to come down with robust sales in May.
Saw online (.com) sales growth of $232M YoY.
Noted that weather produced very little difference regionally in .com sales.

Future Operations

Showroom model of business sees expansion in appliance showcases due to average customer behavior in the store spending time in there. Cutting down kitch showcase areas.
Expanding Pro service to allow customers to track and manage orders throughout the production and delivery process.
By accommodating and working with small and large-scale vendors, Management sees Pro feature to bring 100% electronic interchange data (EDI).

Home Depot shares were trading up 2.21 points to 78.71 at 11:20AM EDT.

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