Steven Zaccone

Daniele said DIY was slower early (hot-weather categories) but the August exit rate improved and elevated transaction declines should moderate to a normal trend.

Daniele confirmed higher fuel keeps freight inflationary but nowhere near pandemic levels, and said the supply-chain team manages transport costs well.

Philip acknowledged May has been cooler but expects normal-to-hot summer; cited mega hub openings and strong initiatives as Q4 growth drivers.

Jamere confirmed solid margin execution with 42bps improvement offsetting 22bps commercial mix drag; shrink and supply chain productivity both improving.

Management described middle innings of investment cycle. Expects incremental 40-50 stores per year through FY28. Pipeline strong, stores ahead of pro forma. SG&A drag of 1.5-2 points from new stores, managed disciplined otherwise.

Management broke demand into three buckets: discretionary (most elastic, ~16-17% of mix), maintenance (some deferral but creates future failure), and break-fix (inelastic). Expects discretionary to recover as inflation moderates.

Management dismissed elasticity concern given low absolute ticket ($35-40 DIY, $60-90 commercial). Industry remains rational on pricing.

Management credited vendor cost negotiations, category innovation, and Duralast brand mix improvement. Expects merch margins to mute commercial mix drag.

Management sees margin improvement opportunity in both DIY and commercial independently, accepting overall mix pressure from faster commercial growth.

Management expects similar top-line momentum in Q4 with continued commercial acceleration and disciplined investment.

Management confirmed wage inflation moderating, continuing to invest in growth initiatives while managing SG&A in disciplined way.

Management attributed sequential weakness primarily to hurricane disruption and noted new/used car related segments remain weak.

Ted confirmed H2 comps expected stronger than H1 from storm lapping. Harsh winter helps Q1 through damage repair but risks late spring pushing seasonal business into Q2 via bathtub effect. No crystal ball on spring timing.

Richard said ticket up ~3% from pricing actions (higher in H1, lower in H2) with negative transactions offsetting. Billy said big ticket over $1,000 up 1.3% in Q4 driven by plumbing, electrical, and power, with similar composition expected in 2026.

Ted maintained SRS is a long-term mid-single-digit grower, with current softness driven by zero storm activity. SRS is 80%+ reroof vs new construction. Roofing shipments down mid-teens but SRS flat.

Richard confirmed Q4 storm lap is similar magnitude to Q3 with even slightly higher sales to compare against from last year.

Ted said permanent tax position removes uncertainty. Optimistic that deficit reduction will benefit long-term rates sustainably, but difficult to predict when it unlocks housing turnover.

Billy acknowledged higher tariff rates vs May but said over 50% domestic sourcing limits impact. Focused on protecting total project cost. Reduced garden promotions were main transaction headwind in Q2.

Billy said consistent competitive pricing so far with no broad-based modifications yet. Acknowledged it is still early days in the tariff environment.

Richard said weather impact concentrated in the north and Canada. Hurricane recovery benefit was in line with expectations and baked into annual guidance on a year-over-year basis.

Billy confirmed rational pricing environment with promotions back to pre-COVID levels. On tariffs, noted years of sourcing diversification and strong vendor relationships.

Richard confirmed SRS hit $6.4B top line target and is already contributing bottom line. Mix impact to HD operating margin is about forty basis points but company calls it acceptable.

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Brandon cited Total Home initiatives, Extended Aisle momentum, pet/workwear national rollout, potential tax refund stimulus, HELOC unlocking, and Pro plan spend with FBM/ADG as drivers toward the upper end.

Marvin stated the rate impact is factored into guidance. Company started with a flat market view and is focused on taking share regardless of macro. Highlighted 4 consecutive positive comp quarters as evidence of execution ability.

Brandon confirmed buyback pause through FY26, aggressive debt paydown to 2.75x target, with repurchases expected to resume in 2027.

Brandon deferred 2026 specifics and long-term target updates to after FBM closes, focusing on sustainable sales growth and EPS accretion in first full year.

Marvin acknowledged increasing e-commerce competition but emphasized product knowledge, store environment, and J.D. Power #1 ranking as differentiators.

Marvin positioned ADG as generating $0 revenue currently from new home construction, a $50B TAM with significant decade-long growth potential.

Bill expressed enthusiasm for spring readiness with new product launches across categories and strong cross-functional coordination.

Bill confirmed unit growth driven largely by duress/replacement customers, with the next-day delivery model and online experience as key differentiators.

Corie said promotionality is in line with expectations, back-to-school and the anniversary sale are resonating, and Ads/Marketplace OI contribution is slightly better than the start of the year.

Jason expects computing ASP up mid-teens with units down high single digits to stay roughly consistent through the year; Corie said blended ASP stays about flat as mix into lower-priced products offsets increases.

Matt said Q1 and Q4 have more comp opportunity while Q2/Q3 face tougher comparisons from last year's strength. Memory cost increases have already begun flowing through in some small portions of categories and will continue rolling through upcoming quarters.

Matt said both initiatives will add operating dollars and help generate better rates beyond FY2027. Couldn't specify timing to reach a particular OI level but confirmed they will be meaningful contributors to rate expansion, and the company will continue investing responsibly to unlock future growth.

Matt listed back-half drivers: Windows 10 end-of-support, Mac upgrade opportunity, mobile phone comp growth continuing, Switch 2 lessening gaming declines, and store experience changes. On the low end, no back-half improvement vs. Q1/Q2 trends.

Corie said consumers continue behaving consistently, value-seeking during events, willing to spend on innovation. No notable competitive shifts. Unit growth in notebooks has persisted since Q4 FY2024.

Jeffrey framed the range: midpoint continues current 1- and 2-year trends, high end reflects continued acceleration and a strong holiday, low end less traction.

Laura acknowledged Pottery Barn had more promotions to reduce from its base than expected. Still working on promotional pullback with remaining opportunity. Furniture improvement on multi-year stack is positive.

Laura declined quarterly guidance but said positive furniture comp is a huge factor. Holiday-specific brands like Kids and Williams-Sonoma have great momentum. Confident in product pipeline.

Laura said consumer responding to non-furniture, seasonal, collabs, and design services strategies. Could not speak to broader consumer trends beyond own business.

Jeff confirmed guidance includes 20% China, 25% Mexico/Canada, 25% steel/aluminum tariffs. Outlined 6-point mitigation plan including vendor concessions, resourcing, and pricing.

Brad noted even mature markets are nowhere near dominant positioning, still close to the average ~10% industry share. The core Mid-Atlantic from Carolinas to southern Virginia is more mature but still immature overall. Northern Virginia through D.C., Baltimore, Philly, and New York represent zero presence and all opportunity.

Jeremy noted Q1 2026 will calendar Q1 2025's muted ~0.5% same-SKU so the benefit will be large in the first half then decline as they calendar H2 2025's ramp. On tariff rollback, as a LIFO reporter cost reductions would show up quickly in gross margin. Brent added they still expect the administration to remain focused on tariffs through other methods.

Jeremy noted guidance does not incorporate significant further tariff-driven inflation benefit, though the potential exists. Hesitant to project a windfall given consumer shock concerns, consistent with their historical approach to forward inflation.

Brad saw opportunity particularly against less sophisticated independents, but tempered expectations by noting big competitors and the best independents will navigate well. Emphasized proprietary brand portfolio and supply chain flexibility as advantages.