Home Depot Inc HD
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/13/2012

Operator: Good day, everyone, and welcome to today’s Home Depot Third Quarter 2012 Earnings Conference Call. Today’s conference is being recorded. Please note that any prompts entered prior to this time may not have 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, Vicky, and good morning to everyone. Welcome to The Home Depot third 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. If we are unable to get to your question during the call, please call our Investor Relations Department at 770-384-2387.

Now 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 third quarter were $18.1 billion, up 4.6% from last year. Comp sales were positive 4.2% and our diluted earnings per share after adjusting for the closure of our stores in China were $0.74. Our stores in the United States had a positive comp of 4.3%. We faced a difficult year-over-year comparison in the quarter, particularly in our northern division because of the overlap from Hurricane Irene last year. Despite this, all three of our U.S. divisions had positive comps.

The Southern division was our strongest division for the quarter. Of note, all of our major markets in Florida showed quarter-over-quarter comp improvement and in the Western division our major markets in California had growth rates above the Company average. Both of these are signs we believe of a continuing healing in the housing market. In all 33 of our top 40 markets had positive comps and our markets with negative comps were primarily in the Northeast.

On the international front, our Mexican business had another quarter of positive comps for the 36th quarter in a row for nine years of quarter-over-quarter positive comps. In Canada, we had positive comps for the fourth consecutive quarter as Bill Lennie and his team continued to improve our business there and during the quarter, we announced the closure of our big box stores in China. After several years of effort, we concluded that we could not make our big box retail model profitable there.

Read our Earnings Call Transcript disclaimer.
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