Home Depot, Inc. (The)

Greetings, and welcome to the Home Depot second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Isabel Jancy. Please go ahead.

quarter 2021 earnings call. Joining us on our call today are Craig Menear, Chairman and CEO, Ted Decker, President and Chief Operating Officer, and Richard McVail, Executive Vice President and Chief Financial Officer. Following our prepared remarks, the call will be open for questions. Questions will be limited to analysts and investors. And as a reminder, please limit yourself to one question with one follow-up. If we are unable to get to your question during the call, please call Investor Relations at 770-384-2387. Before I turn the call over to Craig, 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, the factors identified in the release and in our filings with the Securities and Exchange Commission. Today's presentations will also include certain non-GAAP measures. Reconciliation of these measures is provided on our website. Now, let me turn the call over to Craig.

Thank you, Isabel, and good morning, everyone. We appreciate you joining us on our call this morning. We were pleased with our performance in the second quarter as we achieved over $40 billion in quarterly sales for the first time in our history. Sales for the second quarter were $41.1 billion, up 8.1% from last year. Comp sales were up 4.5% from last year, with U.S. comps of a positive 3.4%. Diluted earnings per share were $4.53 in the second quarter, up from $4.02 in the second quarter last year. The strong underlying demand across the business continues. During the second quarter, we did observe some changing consumer patterns as the U.S. economy opened up. This has manifested itself in several ways. We have seen a shift in pattern of sales within the week, as our weekday sales performance is actually strengthened relative to the weekend. We attributed this to consumers returning to travel and other recreational activities. And while the consumers returning to pre-pandemic activities, we continue to see them engaged in home improvement projects. We also see customers more comfortable taking on larger projects as evidenced by the continued strength with our pro customer. which outpaced the DIY customer for the second quarter in a row. We remained agile and flexible and were pleased with our ability to respond to strong home improvement demand and comp the comp in the second quarter. We had positive comps every week despite unprecedented compares last year and grew sales by $3.1 billion in the second quarter and more than $12 billion year to date. Over the last six quarters, we have grown the business by more than $34 billion, a level unmatched in our market. From a geographic perspective, 15 of our 19 U.S. regions posted positive comps versus last year. On a two-year stack basis, all 19 regions saw strong double-digit comp growth. However, unlike the past four quarters, the second quarter we did experience some variability in performance from a geographic perspective. The variability in our regional performance is driven by our northern division, where we saw a more pronounced shift in sales with stronger sales in outdoor seasonal categories during the first quarter. Mexico posted double-digit positive comps, and despite significant customer restrictions during the quarter due to COVID-19, Canada posted comps that were essentially flat in local currency. We continue to effectively manage the strong demand for home improvement products despite significant industry disruptions in supply chains. We are leveraging the scale of our supply chain and partnership with our vendors to prioritize key SKUs in high-demand categories. And while our end stocks are not where we want them to be, they have improved from where they were a year ago, and our network continues to flow goods remarkably well thanks to the investments we have made in our supply chain over a number of years. The team continues to make progress on building out our one Home Depot supply chain vision. We remain largely on track with our plans, with a critical mass of buildings scheduled to come online this year and next. We believe that the network we are building is unique to the market. It will not only enhance the customer experience from a delivery standpoint, but also expand the breadth and depth of our current opportunity set, drive efficiency end-to-end, and leverage our scale to further extend our low-cost position in home improvement. In the near term, we remain focused on being flexible and agile as we navigate this dynamic environment. But we also continue to leverage the momentum of our strategic investments to further enhance interconnected shopping experience in support of our goals to drive growth faster than the market in any environment, further strengthen our position as a low-cost provider in home improvement with a relentless focus on productivity and efficiency, and deliver exceptional shareholder value. Throughout all the events of the past 18 months, our culture has remained our North Star. In fact, I recently spent time with a number of new associates that we have hired in the past year and was struck by how engaged and connected these associates were to the Home Depot culture. They were onboarded during a time when our stores and teams were busier than ever, but our associates took the time to get to know these new folks and share what it means to be part of the Orange Blooded family. Our ability to invest for the future while also managing the most fluid environment in our company history is a direct result of our associates and their extraordinary efforts. I want to close by thanking them for the many ways they continue to live our values by serving our customers, communities, and each other. And with that, let me turn the call over to Ted.