Home Depot, Inc. HD
Q4 2011 Earnings Call Transcript

Operator: Good day, everyone, and welcome to today's Home Depot Fourth Quarter 2011 Earnings Conference Call. Today's conference is being recorded. Please note that any prompts entered before this time may not have been registered in our system. Beginning today's discussion is Ms. Diane Dayhoff, Vice President, Investor Relations. Please go ahead.

Diane Dayhoff - VP, IR: Thank you, Dave, and good morning to everyone. Welcome to The Home Depot [third] (sic) [fourth] quarter earnings conference call. Joining us on our call today are Frank Blake, Chairman and CEO of The Home Depot; Craig Menear, Executive Vice President, Merchandising, and Carol Tome, Chief Financial Officer and Executive Vice President, Corporate Services.

Following our prepared remarks, the call will be opened for analysts' questions. Questions will be limited to analysts and investors, and as a reminder, we would appreciate it if the participants would limit themselves to one question with one follow-up please. This conference call is being broadcast real-time on the Internet at earnings.homedepot.com. A replay will also be available on our site. If we are unable to get to your question during the call, please call our Investor Relations Department at 770-384-2387.

Before I turn the call over to Frank, let me remind you that today's press release and the presentations made by our executives include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those factors identified in the release and in our filings with the Securities and Exchange Commission.

Today's presentations may also include certain non-GAAP measurements. Reconciliation of these measurements is provided on our website.

Now, let me turn the call over to Frank Blake.

Frank Blake - Chairman and CEO: Thank you, Diane, and good morning, everyone. Sales for the fourth quarter were $16 billion, up 5.9% from last year. Comp sales were positive for 5.7% and our diluted earnings per share were $0.50. Our U.S. stores had a positive comp of 6.1%. From a geographic perspective, we saw positive comps in all of our top 40 markets. The unseasonably warm weather helped customer traffic and clearly was a factor in our sales performance. We've also seen the steady recovery of some of the hardest hit markets like Florida and California. Our major Florida markets all outperformed the Company average and California was in line with the Company average. Both states have posted positive comps for eight consecutive quarters.

As Craig will detail, we saw strength in our core merchandising areas as well as in our holiday gift centers and we had strong growth in customer transactions with sequential comp transaction improvement each quarter this year.

On the international front, our Canadian business had positive comps for the quarter and our Mexican business had another quarter of positive comps making it 33 quarters in a row of positive comp growth. Operationally, Marvin and his team are making progress on our customer service initiatives. Based on the changes we've made throughout the year, we now have approximately 53% of our store labor hours dedicated to customer-facing activities. Just four years ago, we were at 40%. So, this is a significant improvement in a short period of time. It's required a lot of detailed planning and focused execution at the regional district and store level to make this happen and this speaks to the alignment of our store operations and support teams.