Loews 1Q15 Earnings Call Notes

Difficult operating environment w/ port

“Our ability to adapt to difficult operating conditions was tested by the prolonged labor dispute at West Coast ports and I am pleased with the team’s diligent effort to minimize the impact these challenges created. ‘

See positive economic outlook

“Key drivers of home improvement industry growth, job and income growth, home-buying and home price appreciation remain aligned for modestly stronger industry growth. At the same time lower energy prices should fuel stronger consumer spending in 2015.

We continue to see steady recovery within the housing market, including positive trends in turnover and moderate home price appreciation as measured by FHF’

Encouraged by consumer sentiment survey

“We are encouraged by the results of our first quarter consumer sentiment survey where we continue to see homeowners’ views around personal finances and home values improved. According to the survey, homeowners are shifting more of their spending to home improvement. As a result, their intentions to begin a home-improvement project in the next six months were the highest in six years and these planned projects are now almost evenly split between discretionary and non-discretionary.”

Ticket up 3%, transaction up 2.3%

” Sales for the first quarter were $14.1 billion, an increase of 5.4%. Total average ticket increased 3% to $66.63 and total transaction count increased 2.3%.’

No issues with flooring

“As we look at our portfolio, we are very comfortable that we don’t have issues. Our vendors are largely US, they’ve all certified with us that there are no issues. So we are very very comfortable that we are in a pretty good place on this and as we said there was no issues relative to flooring in the quarter.”

Dotcom growth 25.5%

“As we look at dotcom sales for the quarter they grew 25.5% on a comp basis. Q1 traffic was up double digits to the site and our conversion rate improved as well from an overall perspective for the quarter.”

We do recognize that we have tougher comps in the back half

“we do recognize that we are going against tougher comparisons. But on balance, the macro should be more constructive as the year progresses relative to 2014. So we are still confident with our plan for 2015 our ability to execute against that plan.”

Not going to confirm that they’re winning business from Lumber liquidators, but those categories are strong

“I don’t want to talk to a competitor. What I would say is that our flooring business performed very well and when we look at the categories under flooring, we did see strength in laminate. We saw good performance in tile and there was a little bit of pressure that we saw in carpet. “