Home Depot Conference Call Highlights

The Home Depot, Inc. HD reported its fourth quarter earnings on Monday. Shares of the company are down 1 percent. Below are some key highlights from its conference call. Performance Metrics: • We were pleased with our performance in the third quarter. • Strength in the core of the store, growth of our Pro customers, excellent execution of seasonal events, and the continued implementation of our merchandising tools all contributed to these results. • All merchandising departments posted positive comps. Millwork, Tools, Kitchen, Indoor Garden, Lumber, Lighting, Bath and Plumbing were above the company average. • Flooring, Hardware, Building Materials, Dcor, Electrical, Paint and Outdoor Garden were positive but below the company average. • The core of the store continued to perform, and we saw comps above the company average in maintenance and repair products like water heaters, light bulbs, power tool accessories, hand tools, cleaning, pipe and fittings and wiring devices. • There was also strength in Simple Decor with comps above the company average in plumbing fixtures, decorative lighting, vanities and hard surface flooring. Pro-heavy categories continue to grow. • We saw comps above the company average in insulation, concrete, pressure treated wood, dimensional lumber, HVAC, and gypsum. • Our mill work categories also had another quarter of great performance. • Comps above the company average in interior doors, exterior doors, and windows. • Our Labor Day, fall cleanup, and harvest events provided great values and were well received by our customers, resulting in solid comps in outdoor power, storage, decorative holiday, and grills. • Using our merchandising planning tools, we were able to add innovation and localization within our fastener and builders hardware categories. • Total comp transactions grew by 3.1% while comp ticket increased 2.1% for the quarter. • Our average ticket increase was positively impacted to reflect approximately 10 basis points due to commodity price inflation from products such as lumber. • Transactions for tickets under $50, representing approximately 20% of our U.S. sales, were up 1.9% for the third quarter. • Transactions for tickets over $900, also representing approximately 20% of our U.S. sales, were up 5.9% in the third quarter. • The drivers behind the increase in big-ticket purchases were water heaters, flooring, and counter tops. Financial Metrics: • In the third quarter, sales were $20.5 billion, a 5.4% increase from last year. • Our total company comp store same-store sales were positive 5.2% for the quarter with positive comps of 5.3% in August, 4.8% in September, and 5.4% in October. • Versus last year, a stronger U.S. dollar negatively impacted total company comps by approximately $109 million or 60 basis points. • Comps for U.S. stores were positive 5.8% for the quarter with positive comps of 5.8% in August, 5.2% in September, and 6.2% in October. • Additionally, in the third quarter we repurchased $2.24 billion or 24.2 million of our outstanding shares, all on the open market. • For the remainder of the year we intend to repurchase approximately $1.26 billion of outstanding stock for total fiscal 2014 share repurchases of approximately $7 billion. Guidance: • For earnings per share, remember that we guide off of GAAP. • We are reaffirming fiscal 2014 diluted earnings per share guidance of $4.54, an increase of approximately 21%. • This earnings per share guidance includes the $5.74 billion of share repurchase completed in the first three quarters of 2014 and our intent to repurchase approximately $1.26 billion in additional shares in the fourth quarter.