Home Depot Goldman Sachs Global Consumer and Retail Conference

It's my pleasure to introduce the members of the management team for The Home Depot and to moderate this fireside chat. Today we have with us Richard McPhail, Executive Vice President and CFO of The Home Depot, and we have also with us Billy Bastek, Executive Vice President of Merchandising. Thank you so much for being here today.

Thanks for having us. Thank you.

Yeah, thanks for having us.

I wondered if we could maybe start out. Obviously, we know very well the state of the housing environment. I wondered if we could maybe talk to more of the areas of strength that you've seen in the context of a more difficult backdrop. During the second quarter, you experienced broad-based demand in 13 of your 16 merchandising categories, posting positive comps. Can you maybe talk about what you're seeing within those categories, where the strength is coming from, and how you position yourselves to continue to take advantage of that over the longer term if the macro backdrop stays the way it is?

Let's turn to Billy for specifics on that, and then we'll open it up a little bit to the broader macro.

Yeah. No, we were real pleased with the Q2 results. Actually overperformed what we had originally forecasted. Saw great balance across our business, 13 of 16 categories, as you mentioned. Positive comps and I'd say more broadly, there was a lot less of our top 20 categories that made up the sequencing of that. Really only a couple of them were related to the seasonal business. Really core down the middle, think plumbing, electrical, hardware, tools, really had a great performance, both in-store and online. So we're really happy with the balance across the entire portfolio. There's some pressure related to some of the categories that we didn't call out, but really pleased with the performance and think the maintenance categories and really the core home improvement business has really held up terrifically well, not only in Q2, but in the first half overall.

And Kate, we think that we're accelerating our share gains.

Right. When you look at the broader macro, it's really hard to see any points of inflection in the stats that we look at.

We know the consumer has become more pressured over time over the last six quarters. If you look at consumer sentiment, consumer confidence, and other factors, I'm sure you'll want to get into. Our job in this environment is to control what we can control and to continue to lean into investment because those investments are really the driving force behind the share capture we're seeing.

Right. Given the share gains that you have been so successful in gaining, again, you're seeing growth. There are others where you've seen double-digit declines in the environment. Have you seen much change in the competitive landscape, with smaller players and just the overall environment in terms of what's driving that share?

In an environment like this where the whole sector is pressured, we think it's a great opportunity for us to use our advantages of scale to take share. We are building off of a foundation that's been in place for the entire history of The Home Depot. Our real estate footprint will never be replicated. Our incredible associate base and our culture will never be replicated. There are investments that we are making that we think differentiate us, whether it's tools that we're putting in the hands of our associates to make sure that it's easier for them to spend time serving customers rather than just doing tasking, from the product authority that Billy and his team bring every single day, to gains in delivery, that our supply chain and our dotcom business are leaning into.

Our great pro teams and our great pro subsidiaries that are leaning in. It's not just one thing that's leading to all these share gains. Some of these are really more sort of very recent as opposed to others. Billy, maybe we can talk a little bit about delivery and how much of an advantage that's given us.

Yeah, certainly, delivery across whether it's FDC delivery model we rolled out, ship from best location about 16 months ago at scale. We recently rolled out more expedited delivery out of the stores. We're seeing 65% of our parcel shipments are shipped same day, next day. Then exciting for us is using our network both in stores and in our broader network through our MDOs. 55% of our big and bulky products are delivered within 2 days, which we think has been a great competitive advantage and a great customer experience as well. So we're really pleased with the delivery aspect, both in stores as we've lit our stores up and now with expedited delivery, 2 hours or less. We're really pleased with the results we've seen across the board.

The engagement from customers that have used that service both in store and online and what we see from that basket from them, more go forward.