HD Supply 3Q15 Earnings Call Notes

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HD Supply’s (HDS) CEO Joe DeAngelo on Q3 2015 Results

Construction end markets continue to be solid

“our end market views are mostly unchanged from our disclosure in September. We believe the construction end market continue to be solid. In particular, non-residential demand continues to be strong in our priority districts. We continue to see cranes across the skyline in most of our major markets and our Construction & Industrial teams are executing well. We believe the projects represent multi-year opportunities. Additionally, our views on residential are largely unchanged. The most recent housing data is mixed with October single-family starts, up only 2% versus prior year. However, we believe that a moderated and prolonged construction growth trajectory is a solid environment for HD Supply.”

Continue to see good activity in construction

“we continue to see good activity from a non-res perspective. I think the C&I’s performance obviously speaks for itself. If you look at all of our priority districts, the sentiment and the customer activity continues to be good. We think there are multiyear projects and so it’s got a runway tail to it. So, I would say more of the same from our perspective. We see all the same third-party data points that everybody else does, including folks like Dodge Data etcetera that have pretty hard to interpret revised datasets and so the best intelligence that we can develop our views from is the local intelligence and that continues to be solid.”

We saw a favorable market in November

“So that’s exactly right, we continue to see favorable market and we think that that manifested itself in November. I would say it’s also although it’s only one month only, one data point is encouraging to see that Waterworks improved from the 1% in the third quarter to a 4% in November.”

We never pass up great talent

“We never pass up a great talent and we are always very, very aggressive in terms of having to pass it on full time no matter what the market environment is for great talent both sales and elsewhere across the company. As the economy gets good or bad I mean there is always the opportunity to help to deploy great talent either from competitive sets or from areas where we see people getting development that we would like to have on team. ”