Home Depot 2Q15 Earnings Call Notes

Online sales +25% led by BOPUS and BOSS

“‘We had another quarter of strong growth in our digital assets with dotcom sales growing approximately 25%, led by online orders picked up in the store through Buy Online, Pick Up In Store, BOPUS; and Buy Online, Ship to Store, BOSS. At the same time, our operations team remains focused on improving the interconnected customer experience in the store. And as a result, we saw another quarter of year-over-year improvement in customer satisfaction scores for our BOPUS and BOSS offerings in the second quarter.”

Increasing sales and EPS guidance

‘We’re pleased with the performance in the first half of the year, and while 2015 consensus U.S. GDP growth projections are moderate, housing data remains supportive of the continued growth in home improvement industry. As Carol will detail, we are increasing our sales and earnings per share guidance for the year to reflect the outperformance of the quarter and the expected benefit from the anticipated completion of the Interline acquisition in the third quarter.”

Weather impacts to outdoor categories

“Outdoor project categories like soils and mulch, live goods and fertilizers were pressured during the quarter specifically from weather that impacted certain areas of the country like the drought in California and record rainfall in parts of Texas and the Midwest.”

Sales per sqft were $420

“Total sales per square foot for the second quarter were $420, up 4.1% from last year.”

Continue to see positive signs in the housing market

“we continue to see positive signs in the housing market. Home prices continue to appreciate and housing turnover and household formation are now slightly ahead of the assumptions we use to build our plan.

See stores as extension of distribution capabilities

“in addition to the three direct fulfillment centers, we have 2,000 stores that are conveniently located, and we’re working on delivery capability from the stores. So we look at the stores to really be the expedited capability to put product in the hands of customers.”

Drought leading to change in merchandise in affected areas

“What we’re doing in the live goods category specific, we’ve definitely shifted the assortment into water-tolerant or drought-tolerant species, so a lot more cactus and succulents. We’re also diminishing the size of live goods in a number of stores and expanding pavers and the like, as we see people definitely taking grass, diminishing the size of their lawn, and putting in more pavers and succulents.”

People act differently when they see their home as an investment not an expense

“We get a little bit from the economy too. Home price appreciation continues to progress nicely, prices are up 4% and as we talked about, when consumers believe their home as an investment and not an expense, they spend differently and we’re seeing that spend pattern.”

Not seeing any regional differences that inform shape of housing recovery

“we’re not seeing any regional differences that really help us inform the shape of the housing recovery”

1.6m households were formed in 2Q

“1.6 million households were formed in the second quarter. This is something that we have been hoping for. Now, not all those households are going into single-family units. They’re going into rental units, but that’s okay because we can serve those rental units. It’s really interesting to note that of the 135 million housing units in the United States, 44 million of those are rental units; and of those, 13 million are single-family homes.”

We look at wage on a market by market basis

“We look at wage obviously on a market-by-market basis. We are constantly and have been for years adjusting based on the market dynamics. We’ve made thousands and thousands of adjustments this year, as we would in previous years. We pride ourselves on trying to make sure that we have compensation overall that is above market, and that’s something that we will continue to focus to do. But clearly, there are markets where we’ve had to make adjustments, and we’ve done so.”

Ad spend flat but shifting from print to digital

“So our ad spend is pretty flat year over year. And we have been for numerous years now in an effort to shift our spend to new mediums and platforms. As an example, if you step back, several years ago we had on average over 50 print pieces that hit the street in a year. I think this year we’ll do something like 11. So we’ve made a pretty hard shift to new platforms in the digital space.”

Home Depot 1Q15 Earnings Call Notes

A more normal spring. Strength across the country

“We saw a more normal spring across much of the country in the first quarter. All three of our U.S. divisions posted mid-single-digit comps or higher, our Western division was our best performing division with strength in key markets, including San Francisco, Sacramento, Colorado and Seattle. All 19 of our U.S. regions saw positive comp growth in the quarter. Both tickets and transactions grew during the quarter with particular strength in transaction growth.’

GDP growth was slow but housing remains positive

“While it’s early in the year, our view of the macro environment has not changed much. The U.S. GDP growth was below consensus estimates for the first quarter, but housing data remains positive and supportive of the housing recovery, and the growth that we see in our business also supports the view of a continued recovery in the U.S. housing market.’

Plenty of strength in big ticket items

“I would say that we’re seeing really strength across many departments, water heaters, appliances, our tools, riding mowers, walks, all of our outdoor garden categories, grills, et cetera had just a terrific quarter and those wouldn’t be Pro-focused items.”

Have a customer with a higher average home price than the national average

“Since 2009 spending in high income households has grown faster than low income households, driven in part by higher end homes recovering faster than lower end homes, and when we say higher end homes, we are talking of homes of $200,000 and up. Interestingly as we look at our consumer base, over 50% of our customers have homes of $200,000 or more, and you compare that to the national average, which is more like 40%, so we think just the nature of our customer base is helping drive this big ticket growth.”

Interest rate increases shouldn’t have an effect on our business

“The analysis would suggest that interest rates, and these would be mortgage interest rates, could rise 200 basis points and the Affordability Index would still be north of 100%. So even in the face of potentially higher rates and who knows when that might occur, but even in the face of potentially higher rates, we don’t see any near-term pressure on our business. And in fact, to your point, that could suggest a little inflation in the economy and that would be a good thing.’

Q1 will be the easiest comp for the year

“We still expect the first quarter to be the best quarter and that the halves to be similar.”

Nearly 1/3 of 18-34 year olds live with parents

“it looks like there’ll be 1 million households formed this year, which should be awesome. In fact I’m always fascinated by this statistic. If you look at people between the ages 18 and 34, nearly a third of them are at home with their parents. And if they were all to leave their home nest, like my nephew just did, thank goodness, that’s 4 million households that would be created. So I’m just really excited about what the future may be for our business.”

Not forecasting an improvement in commodities

“we’re not forecasting an improvement against commodities, copper prices and lumber prices are down meaningfully on next year and we’re anticipating it staying as is.”

Inventory is light thanks to west coast ports

“the West Coast ports have been a very challenging situation for us. The team hI would say that’s a tough one to call out. There is the theory of the case that in some cases there was a delayed spend. Clearly during the economic downturn and people focused strictly on maintenance of their homes. If you recall our maintenance categories were strong throughout the economic downturn. And when a home moves to a positive growth in terms of value, what was once an expense now becomes potentially an investment.ere has done a great job in terms of working together to mitigate the issues there. Having said that, we have had negative impact on our in-stock, particularly for our direct import items, but we’ve also seen some hits to our fill rates from vendors, and that has led to lower in-stock than we would like to see. So our inventory probably is a little lower than we would like it to be given where it’s at” sv

No sign of impact on texas

We have 178 stores in the State of Texas. We’ve seen no visible impact whatsoever in that State at this point. Matter of fact all our major markets in that State posted mid-single-digit comps. It’s something that we’re keeping our eyes on very closely and we’ll adjust accordingly if need be, but have not seen it at this point.”

Can’t really explain why people are shifting dollars to home goods

“I would say that’s a tough one to call out. There is the theory of the case that in some cases there was a delayed spend. Clearly during the economic downturn and people focused strictly on maintenance of their homes. If you recall our maintenance categories were strong throughout the economic downturn. And when a home moves to a positive growth in terms of value, what was once an expense now becomes potentially an investment.’

Home Depot 4Q14 Earnings Call Notes

Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.

Big comps

“Sales for the fourth quarter were $19.2 billion, up 8.3% from last year. Comp sales were positive 7.9% and our diluted earnings per share were $1.05. Our U.S. stores had a positive comp of 8.9%.”

3.3-4.5% comp growth this year

Based on this outlook, we expect comp growth in the U.S. of approximately 4.5%. As Carol will detail, we expect similar growth in our international businesses but currency headwinds could result in lower total company growth; therefore, we expect total company comp growth of approximately 3.3 to 4.5% and corresponded diluted earnings per share of $5.11 to $5.17.”

Small ticket vs. large ticket breakdown

“Transactions per ticket under $50, representing approximately 20% of our U.S. sales, were up 3.1% for the fourth quarter. Transactions per ticket over $900, also representing approximately 20% of our U.S. sales, were up 10.3% in the fourth quarter. The drivers behind the increase in big ticket purchases were appliances, water heaters, and several installation service categories such as windows, roofing, and sheds”

Q: are you guys planning on raising wages

“Chris, we have prided ourselves on paying above the market as a company for a number of years. That’s our intent going forward. We continually look at the market on a market-by-market basis and make adjustments where it’s appropriate.”

Can’t say that gasoline is driving increased sales. We think it’s more likely because we’re awesome

“as it relates to the gasoline, we’ve looked hard over the years to try to look at the correlation gas prices to sales, and we have not been able to draw that correlation. Clearly it is a positive thing when a customer has more disposable income in their pocket, so even though we can’t draw that correlation, that is a good news thing for us. I’d also say that we were very pleased with the level of transaction growth that we had in the quarter. Matter of fact, it was above what we had anticipated. I think in large part that’s a strong response to the great programs that Ted called out in terms of the events that we put together and just awesome execution by our store associates as well.’

Q what was driving sales?

Pro customer was strong

“On our pro customer for known data sets, and this would be looking at private label credit card sales for our pros as well as pros who are managed accounts, so our growth in those pros, that was above the company average, and that then is supported by the merchandise strength that Ted called out in his comments.”

Housing was ok, not that great

“On the housing front, the data is really pretty interesting. Relative to what we thought would happen, home prices came in the year, I think around 4%. We thought they’d be in the 5 or 6% area, so they were up, not as much as we thought, but pretty much in line with what we thought. Turnover actually was down slightly, which was really interesting. We thought we’d get a boost from turnover in 2014, and actually it was down slightly”

Maybe it was lagged effect from 2013 home price appreciation?

“here is this research that was done 10 years ago about a wealth effect on home price appreciation and how it might be a six to nine to 12-month lag. If that were to be true, then you could attribute some of the benefit in the fourth quarter to the home price appreciation that occurred in 2013.’

There are a lot of homes that need remodeling

‘There have been 3.6 million single family homes added to the rental stock between 2006 and 2013. That 3.6 million homes, they are under-maintained. As those homes are moving out of rental into home ownership, they badly need remodels, and in fact the Harvard Joint Center for Housing Studies said that 2014 was the first year since 2005 where remodel dollars are up.’

Mortgage lending still very tight

“As we think about the recovery and the steepness of the recovery, it could be accelerated if mortgage underwriting standards were to be loosened up. We’ve looked at surveys of bankers, and there has been a small, small percentage of them who have said they are loosening up on underwriting standards, but it’s still very tight.’

Third brutal end to winter in a row

“Yeah, this is our third now brutal end to the winter, and in each of the prior two we had excellent recovery. It’s still very early this year.”

Home Depot 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Comps up 5.8%

“Sales for the third quarter were $20.5 billion up 5.4% from last year. Comp sales were positive 5.2% and our diluted earnings per share were $1.15. Our U.S. stores had a positive comp of 5.8%’

Growth in ticket and transaction

“We saw growth in ticket and transaction in the third quarter and we were particularly pleased with the strong transaction growth as each month in the quarter had positive comp transactions.”

Growth in consumer and pro

“Both our consumer and Pro businesses grew during the quarter.'”

Housing recovery on track

“The U.S. housing recovery continues to track in line with our expectations with home price appreciation and housing turnover being the drivers of growth for our business. And we have also seen improvement in GDP growth.’

Good comps all three months

“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.”

Home values up, people getting older drivers of different sides of the business

“We’ve seen obviously as home value appreciation has happened customers are certainly more willing to invest in their homes. I think you also see services growing as a result of you have an aging population and I know for myself where I used to love to do things. I actually have Home Depot services do things now that I would have done previously. ‘

The retail business always shifts

“candidly in the retail business, the competitive environment changes on an ongoing basis. And that’s actually what’s really fun about the retail business.”

Home Depot at Goldman Sachs Conference Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Supply chain has been a huge value driver for us

“our transformation in supply chain has been one of the great drivers of value in our business. As we moved from the bulk of our products going direct to store to the bulk of our products going through our rapid deployment centers”

Three cycles of the business

“we think of our business in three cycles, a sales cycle, a productivity cycle, and a capital allocation cycle. And these are virtuous cycles. And if you look at the productivity cycle, it really is like pushing on a flywheel. And once you get momentum, well the flywheel takes off and that’s what we are seeing in our SG&A expense”

We couldn’t figure out how to make money in China

“We had stores in China. We started with 12 back in 2006. We shut that business down and don’t have any plans of going back. We couldn’t figure out how to make any money in China to just bring it to a point.”

Every couple of years we say, maybe Brazil, then a couple more we say, glad not in Brazil

“We have looked at Brazil several years ago. Have no plans, I mean Brazil is one of those things every couple of years you say, ought to be in Brazil and then every couple of years you go, good not to be in Brazil. So, we have no plans there and really we see such dominant opportunities in North America that’s where we are focused.”

Kitchen remodeling still hasn’t recovered, but maybe coming back

“if you take as a good barometer kitchen remodels and kitchen installation business that was one of the businesses that suffered the most during the downturn, down almost 50% and that still hasn’t recovered. Some of the things that are indicators of the market starting to recover is our services businesses. Our installation business is actually growing at a faster rate than the underlying company”

The smile expansion strategy

“s you know our founders were brilliant in the way they opened our first four stores in Atlanta, then went up to coast like a smile and then came into the center of the country. So, our store locations are in excellent, excellent locations.”

Changing consumer preference in flooring

“hen you talk to people about their homes, where it used to be very common for a house to have wall-to-wall carpeting throughout the entire home. Now, it’s more common to have wall-to-wall carpeting for the bedrooms and hard surface for the rest of the house. We have adjusted our space to reflect that same changing pattern in customer preferences”

Home Depot 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

6.4% comp

“Thank you, Diane, and good morning, everyone. Sales for the second quarter were $23.8 billion, up 5.7% from last year. Comp sales were positive 5.8% and our diluted earnings per share were $1.52. Our U.S. stores had a positive comp of 6.4%.”

Broad based growth across all geographies

“We saw broad-based growth in the quarter across all of our geographies. All three of our U.S. divisions posted mid-single-digit comps with the variance of performance within 100 basis points of each other. We’re pleased with these results since we were anniversarying double-digit comps in the second quarter of last year. ”

Housing is a modest tailwind

“We believe the housing market remains a modest tailwind for our business. We had growth in transactions and ticket for both the quarter and the half. Both our Consumer and Pro businesses grew”

customers clearly feel better about investing in their homes

“We believe the housing market remains a modest tailwind for our business. We had growth in transactions and ticket for both the quarter and the half. Both our Consumer and Pro businesses grew”

Strength in big ticket items

“Our Installation Services business, which is high ticket and tends to be on the discretionary end of spending, had a strong quarter. And as Craig will detail, we saw an acceleration of big ticket transactions. These results support the view of a continuing recovery in the U.S. home improvement market.”

capital plan focused on omnichannel retail

” from a capital allocation philosophical perspective, the first use of cash is to invest it back in the business, and this year we have a capital plan of $1.5 billion, and we’re committed to that plan. Interestingly, we are tilting our investments more towards interconnected retail and technology as we continue to try to meet the needs of our changing customer.”

Strength across the store

” from a capital allocation philosophical perspective, the first use of cash is to invest it back in the business, and this year we have a capital plan of $1.5 billion, and we’re committed to that plan. Interestingly, we are tilting our investments more towards interconnected retail and technology as we continue to try to meet the needs of our changing customer.”

Our holiday buy was made last year

“Honestly, the plans for the back half of the year have been put in place months ago. We always would tweak and make adjustments, but the heart of what we’ve got planned was committed many moons ago…I mean our holiday buy was made last year.”

Home Depot 1Q14 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Cold weather impacted sales

“much of the U.S. and Canada had an even colder spring and this had a significant impact on our sales.”

Expect sales to pick up with weather

“In previous years, we’ve talked about the bathtub effect that weather can have on our spring seasonal business, where weak sales in the first quarter are counterbalanced by strength in the seasonal business in the second quarter. We expect the same effect to be true this year. As we look at the performance of our business in the first quarter, the strength in the areas of the country where more normal weather existed supports this outlook.”

Areas with better weather had twice the comps

“In the western and southern divisions we had solid positive comp performance, almost twice the U.S. average.”

May sales are robust, reaffirming guidance

“May sales are robust. So today we are reaffirming the sales guidance relayed out our fourth quarter earnings call and we expect fiscal 2014 sales to increase by approximately 4.8% with positive comps of approximately 4.6%.”

Like May even though it’s a difficult comp

“We are up against very tough comps, and our comp in May last year was double-digit, but we are very pleased with our results thus far and maybe Craig you want to give a little color.”

Kitchens were the sign of a robust housing market

” if you go back to 2005 and 2006, one of the categories that was really the hallmark of turns and sales were special order kitchens; people would buy home, they would invest in the kitchen, they do upgrades and then they turn the home. That’s actually the category for us that got hit the hardest over the housing crash.”

Don’t think we’re seeing that kind of work done, more touch up stuff

“Expect more the upgrades around — you got to make sure the infrastructure of your home is right, you may paint, you may do some gardening. So I think it’s going to be different as we go through this housing recovery than what we saw at the height of the housing market,”

Home price appreciation more important than turnover to get people to spend on their homes

“I’d agree of course, and also suggest that we should look at home price appreciation harder than we do turnover. We can turnover with only 4% of unit. Home price appreciation really impacts the way people spend money on their homes.”

Housing still very affordable

“for right now houses are very affordable, we are at really within the last 20 years this is probably one of the most affordable readings on housing you’re going to see. So supply and demand equation, what’s going to happen with household formation would be the real question to ask over the next several years. And we think it’s going to be a positive dynamic.”

Home Depot 4Q13 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

4.4% comp store growth

“Excluding that additional week in 2012, sales for the fourth quarter were up 3.9% from the prior year. Comp sales were positive 4.4% and our diluted earnings per share were $0.73.”

Expecting home prices to increase, but not by as much as in 2013

“It is not our view that all housing metrics will sustain the growth rates from 2013 going forward. This last year saw a particularly strong recovery in housing prices but we do expect the housing recovery to continue, expect that home prices will increase even though at a lower rate and expect that affordability will support growth in the home improvement market”

It’s been a tough winter but February comps are positive

“I will also note that the extreme winter weather in February hasn’t been our friend, but our February comps are positive and we know firsthand that many homeowners have some major repairs ahead of them, which suggest we should have a great spring selling season.”

We don’t use acquisitions as a means to sales growth

“we use acquisitions really not as a supplement to sales growth but as a supplement to competences that we think are important to add to our capabilities and I would anticipate that that would be the case going forward.”

West was best division, not affected by weather

“the Western division was our strongest performing division and that was the least impacted by weather.”

Wells Fargo loosening mortgage standards

“We thought all along that credit availability was the big driver of the housing recovery and the shape of the recovery curve. We are very encouraged by what we have seen at Wells Fargo. Wells Fargo has announced that they are taking the FICO scores for FHA loans, down from what was 640 to now 600.”

Commodity price inflation helped sales growth last year. Going to see commodity price deflation this year

“In 2013, we enjoyed commodity inflation, not thinking that’s going to happen this year. In fact, we are going to have some pressure from commodity price deflation. So that would be one driver.”

Home Depot Analyst Day Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

“For Home Depot the journey on product authority began with a fundamental restructuring of our supply chain. It’s difficult to claim private place on product authority if you don’t have best in class capabilities for getting product into the customers’ hands. As you know over the last several years, we’ve developed a new supply chain network with our Rapid Deployment Centers or RDCs. The RDC strategy along with improvements in our stocking and bulk DCs allowed us to improve our in-stock rates, improve current and improve customer service.”

Matt Carey, our Head of Information Technology

“2009 investor conference…At the time I told you our capabilities were basically 15 years behind other retailers.”

“there are four trends I’d like to talk to you about today that will influence our future technology direction. First, leveraging Big Data: we have to efficiently utilize the vast amount of data our company produces to simplify and automate decisions. Second, pricing transparency and analytics: pricing transparency has changed the competitive landscape and we must use advanced analytics to constantly fine tune our portfolio strategy. Third, supply chain efficiency: our investments in technology for a supply chain will be a driver of efficient seamless customer experience. And finally, creating a seamless customer experience: customers expect a seamless experience across all selling platforms even at a home improvement store.”

“With 1.3 billion transactions annually, over 15 million visits to our website a week, and over 600,000 SKUs, 300,000 plus associates across 2,200 stores, we have a vast amount of data as you can imagine.”

“through analytics, rules engines, dashboards, we can make and form decision efficiently. It can be provide insight into what’s happening across our business whether it’s marketing, merchandising, finance, supply chain and even in our stores. It can help us better understand the customer and market to them; adjust assortments to trends and demographics; control costs and better manage our stores.”

“pricing is an area where the retail landscape has changed drastically over the last several years. Pricing is increasingly becoming more and more transparent and dynamic. ”

“In today’s multichannel world with pricing data for end stores and online readily available, there is more information available to help understand the pricing landscape. We believe understanding the competitive environment is an imperative for any retailer who wants to win.”

“customer expectations have changed in an interconnected world. The customer expects to be able to buy something online or in a store and have it delivered to their home or in some cases installed.”

Marvin Ellison, our Head of U.S. Stores

“We know that actions like offering our customers refreshments, putting the tool in their hand so they can try before they buy or having personalized training during a workshop, our activities of a pure online competitor cannot replicate. And it reinforces the importance while making an emotional connection is part of our customer service strategy.”

VP of Merchandising, Craig Menear.

“Product authority starts with understanding the customers’ needs and there are factors that we must be keenly aware of over the next few years”

Kevin Hofmann, the President of our Online Business.

“we are increasingly focused on how the physical and digital worlds are converging. The lines are blurring across these channels.”

“This blending of the channels is what we call interconnected retail. And in the past, e-commerce has been viewed as a separate and distinct channel. That’s no longer true. Moving forward, e-commerce has simply become commerce.”

“We see over one-third of our online orders getting picked-up or fulfilled out of a physical store location, 90% of our online orders, excuse me, our online returns enjoy the convenience of free returns in our stores…Almost half of our online visitors indicate their next stop is The Home Depot store, so that’s interconnected retail.”

“let me introduce you to Janet. This is a customer in Minnesota, who recently bought a house about 12 months ago…anet has spent over $20,000 with us over the last 12 months…over the course of the year she’s had 22 transactions, 14 physical in-store transactions, 8 online transactions, 6 of those from a PC and two from the mobile device. Now inside of those transactions, we can count literally hundreds of interactions with our company and our brand, some with a website, some with an in-store associate and some with the call center associate or an in-home agent… rarely can you find a purely online order or a purely in store order along Janet’s journey. The transactions are only part of the story. These lines are blurring and the physical and virtual worlds are colliding to solve problems for our customers.”

Mark Holifield, our Senior Vice President of Supply Chain.

” Our RDC process is superior to traditional retail hard lines distribution as in these innovative facilities product never gets put away into storage or into a pick allocation as in a traditional DC.”

“there are some products that remain optimal to move directly to stores from vendors. And these are typically products where store sales a full truck load a week or more or products requiring special handling like locally sourced live goods.”

Home Depot 3Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

“Comp sales were positive 7.4% and our diluted earnings per share were $0.95 per. Our U.S. stores had a positive comp of 8.2%.”

“From a geographic perspective, sales were strong across the U.S. All of our U.S. regions posted positive comps in the quarter as did 39 of our top 40 markets.”

“Sales from our online channels, including those picked up in our stores, were up over 50% and are now approximately 3% of our total sales. ”

“On the international front, our Mexican business positively comped for the quarter. That makes 40 quarters in a row for 10 years of quarter-over-quarter positive comp growth for our Mexican business — a great achievement. Our Canadian business had positive comps for the eighth quarter in a row.”

“Our average ticket increase was positively impacted somewhat by commodity price inflation from products, such as lumber and copper. The total impact of comp growth from commodity inflation was approximately 45 basis points”

“The drivers behind the increase in big ticket purchases were continued strength in our pro business, appliances, HVAC, countertops and in-stock kitchens.”

“At the end of the third quarter, selling square foot was 236 million and total sales per square foot were $329, up 7.2% from last year.”

“Housing is a bright spot in our economy. As such, we are forecasting our fourth quarter sales and earnings to be stronger than our plan. ”

“So as you know, we’ve just increased our comps for 2013 to 7%.

And in case we get there is this way. First, we start with the GDP estimate of around 2%. Then, we add to that what we think housing is contributing to our sales. We look at housing turnover, home price appreciation and new household formation. And when we look at those drivers, we think housing is contributing about 250 basis points of our growth.

To that, we add the benefits that we’ve enjoyed this year from commodity price inflation that’s maybe around 80 basis points for the year. The benefits that we are enjoying from our new expanded appliance assortment that’s another 80 basis points, and then there is about 90 basis from that that’s just coming from other growth via new innovations that we are bringing into stores, great execution by our store associates. But that’s how we get to the 7%.”

” look for when consumers start to think as of a granite countertop as an expense rather than an investment.”

“we are seeing customers’ willing to spend particularly where you are bringing innovative product that helps them complete their job faster, saves them money”

“If you think about it the underwriting standards are very tight. There was a recent survey of banks, 79% of the respondents said that they have not loosened up on their underwriting standards.”