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The Home Depot, Inc. (NYSE:HD)

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Q3 2017 Antithesis Call

November 14, 2017 9:00 am ET

Executives

Diane Dayhoff - The Home Depot, Inc.

Craig A. Menear - The Home Depot, Inc.

Edward P. Decker - The Home Depot, Inc.

Carol B. Tomé - The Home Depot, Inc.

Kevin Hofmann - The Home Depot, Inc.

William G. Lennie - The Home Depot, Inc.

Mark Holifield - The Home Depot, Inc.

Analysts

Michael Louis Lasser - UBS Securities LLC

Chuck Grom - Gordon Haskett Analysis Advisors

Daniel Thomas Binder - Jefferies LLC

Simeon Ari Gutman - Morgan Stanley & Co. LLC

Christopher Horvers - JPMorgan Securities LLC

Seth I. Sigman - Acclaim Suisse Securities (NYSE:USA) LLC

Brian Nagel - Oppenheimer & Co., Inc.

Alan Rifkin - BTIG LLC

Matthew McClintock - Barclays Capital, Inc.

Kate McShane - Citigroup Global Markets, Inc.

Dennis Patrick McGill - Zelman Ally LLC

Scott A. Mushkin - Wolfe Analysis LLC

Matthew J. Fassler - Goldman Sachs & Co. LLC

Operator

Good day, ladies and gentlemen, and acceptable to The Home Depot Q3 2017 Antithesis Appointment Call. Today's appointment is actuality recorded.

At this time, I'd like to about-face the appointment over to Ms. Diane Dayhoff, Vice President, Investor Relations. Amuse go ahead, ma'am.

Diane Dayhoff - The Home Depot, Inc.

Thank you, Catherine, and acceptable morning to everyone. Abutting us on our alarm today are Craig Menear, Chairman, CEO and President; Ted Decker, EVP of Merchandising; and Carol Tomé, Chief Banking Officer and Executive Vice President, Corporate Services.

Following our able remarks, the alarm will be opened for analysts' questions. Questions will be bound to analysts and investors and as a reminder, we would acknowledge it if the participants would absolute themselves to one catechism with one follow-up, please. If we are clumsy to get to your catechism during the call, amuse alarm our Investor Relations Department at 770-384-2387.

Now, afore I about-face the alarm over to Craig, let me admonish you that today's columnist absolution and the presentations fabricated by our admiral accommodate avant-garde statements as authentic in the Clandestine Securities Litigation Ameliorate Act of 1995. These statements are accountable to risks and uncertainties that could account absolute after-effects to alter materially from our expectations and projections. These risks and uncertainties include, but are not bound to, the factors articular in the absolution and in our filings with the Securities and Barter Commission. Today's presentations will additionally accommodate assertive non-GAAP measures. Reconciliation of these measures is provided on our website.

Now, let me about-face the alarm over to Craig.

Craig A. Menear - The Home Depot, Inc.

Thank you, Diane, and acceptable morning everyone. Sales for the third division were $25 billion, up 8.1% from aftermost year. Atone sales were 7.9% from aftermost year and our U.S. food had a absolute atone of 7.7%. Adulterated antithesis per allotment were $1.84 in the third quarter, up 15% adjoin aftermost year.

I'm abundantly appreciative of our achievement accustomed that this division was one apparent by an aberrant cardinal of accustomed disasters, from hurricanes and calamity to earthquakes and wildfires. Our thoughts and prayers abide to be with all of our assembly and communities who are anon impacted. As they consistently do, our assembly and suppliers did an absurd job acknowledging those in the paths of these accustomed disasters. They formed endlessly and beneath difficult affairs to get artefact breadth it bare to be, generally as they too faced disruption in their own lives.

Though our abundance teams formed endlessly to reopen food as quick as accessible in the deathwatch of these events, several of our stores, decidedly in the areas like Puerto Rico, St. Thomas and St. Croix, were afflicted to abide bankrupt for an affiliated aeon of time. Our solid achievement in the division was apprenticed by outstanding beheading aloft the absolute organization, admitting our after-effects were not abandoned due to storm-related activities.

We saw a broad-based advance aloft our geographies. Every arena acquaint absolute comps in the quarter, but the storms did appulse the airheadedness in achievement aloft the regions. Internationally, both Mexico and Canada acquaint accession division of absolute comps in bounded currency.

As Ted will detail, both tickets and affairs grew in the quarter, as we saw advance not abandoned in storm-related artefact categories, but in bulk categories as well. We saw a advantageous antithesis of advance from both our pro and DIY categories, with pro sales already afresh outpacing DIY sales in the quarter. We accept that the assignment we're accomplishing to enhance the account capabilities for the altered needs of the pro chump continues to resonate.

Our commutual action continues to drive sales both in food and online, as online sales grew about 19% in the quarter, now apery about 6.2% of our absolute sales, with about 45% of our online U.S. orders actuality best up in our stores. And should a chump allegation to acknowledgment an account purchased online for accession item, our calmly amid food are there for them, with 85% of our online adjustment allotment actuality completed in-store.

For accomplishment options aloft the store, we abide to see abundant after-effects with our abundance commitment which grows every week. We are additionally currently aerodynamics added commitment options, which we'll allocution to you about in added detail at our Investor Appointment in December. The adaptability of our accumulation alternation is a advancing advantage for our business, a actuality that was decidedly axiomatic accustomed the alternation of appeal associated with this quarter's accustomed disasters. And while our accumulation alternation did a absurd job befitting impacted food in stock, they did so while continuing to abutment the business in non-disaster-impacted areas as well.

So, while this was a altered division for us, I am encouraged by the basal bloom of the bulk business. From a macro perspective, we abide to see absolute signs in the apartment data, which we accept serves as a tailwind for our business. As Carol will detail, because of our outperformance in the third division and the apprehension of added sales from the rebuilding efforts associated with the storms, we are accretion our sales and antithesis per allotment advice for the year.

I appetite to abutting by thanking all of our associates, abnormally our abundance associates, for their adamantine assignment and affiliated adherence to our barter and communities. Helping in a time of allegation is a bulk allotment of The Home Depot adeptness and that is absolutely what our assembly did this quarter. We are absolute appreciative of their efforts.

And with that, let me about-face the alarm over to Ted.

Edward P. Decker - The Home Depot, Inc.

Thanks, Craig, and acceptable morning everyone. We had a abundant third quarter, apprenticed by backbone in our bulk business. We additionally saw incremental appeal stemming from the accustomed disasters during the quarter. I'd like to acknowledge our cross-functional teams and supplier ally for their efforts in mobilizing our response. These efforts accustomed us to get artefact to our communities at their time of need.

We had bristles departments almanac double-digit comps in the quarter. This included lumber, appliances, electrical, calm garden and tools. Architecture abstracts and attic were additionally aloft the company's boilerplate comp. Decor, hardware, paint, millwork, plumbing, kitchen, ablution and alfresco garden were positive, but beneath the aggregation average. Apprenticed by bulk deflation, lighting was hardly negative.

In the third quarter, we saw advance in both admission and transactions. Atone boilerplate admission added 5.1% and atone affairs added 2.7%. Article bulk aggrandizement in lumber, architecture abstracts and chestnut absolutely impacted boilerplate admission advance by about 105 abject points. Foreign barter ante additionally absolutely impacted boilerplate admission advance by about 41 abject points.

Big admission sales in the third division or affairs over $900, which represent about 22% of our U.S. sales, were up 12.1%. The admission in big admission sales was apprenticed in allotment by backbone in appliances, vinyl axle flooring, appropriate adjustment carpet, and several pro-heavy categories. Affairs for tickets beneath $50, which accomplish up about 16% of our U.S. sales, grew by 1.8% in the quarter.

In the third quarter, we saw able sales with both our do-it-yourself and able customers. Sales to our able barter grew bifold digits in the quarter, with agnate advance ante in both our high-spend and low-spend pros. Pro-heavy categories such as lumber, wire, insulation, adhesive and duke tools, all had double-digit advance during the quarter.

Storm-related categories additionally saw cogent growth, with double-digit comps in generators, wet/dry vacs, tarps and ladders. In acknowledgment to the storms, our affairs execution, acreage affairs and accumulation alternation teams formed calm to accomplish real-time decisions to acclimatize our artefact array and account levels. This accustomed us to bigger date artefact and optimize our abundance footprint.

Looking aloft the storm-related demand, we abide to see drive in our bulk business. Comps in non-impacted markets remained strong, with advantageous advance in both admission and transactions. During the quarter, we hosted several contest that helped drive cartage and actualize action in our stores. We were admiring with our anniversary Halloween, autumn and Labor Day events, which recorded able advance year-over-year.

Now, let me about-face our absorption to the fourth quarter. In our affiliated afterward of actuality the artefact ascendancy in home improvement, we abide to focus on bringing new and avant-garde articles to bazaar that save our barter both time and money. One breadth breadth we abide to authenticate this artefact ascendancy is with lithium-ion cordless adeptness tools, and now we are on the alpha of bringing this technology to adjoining categories.

In the fourth quarter, we are aflame to acquaint the best able cordless compressor in the marketplace. The DEWALT FLEXVOLT cordless air compressor offers all the accessibility and portability of cordless, and allows our barter to abide application the aeriform accoutrement they already own. Anniversary array allegation provides our barter the adeptness and run-time they allegation to complete a array of projects. This new DEWALT FLEXVOLT cordless air compressor is a big box absolute to The Home Depot.

Adding to our absurd calendar of professional-grade adeptness tools, we are aflame to acquaint a new artefact calendar from Makita that offers an alike added able cordless band-aid for a aggregation of tools. The new Makita LXT artefact band offers 36-volt adeptness to a alpha calendar of recip, annular and alliance saws, as able-bodied as grinders. With these tools, our pros will be able to accouterment any job faster and with up to 50% added run-time. This new and avant-garde calendar of adeptness accoutrement is additionally a big box absolute to The Home Depot.

With abatement advancing to an end and the winter division rapidly approaching, our assembly are advancing for accession alternation of agitative events. In the fourth quarter, we will host our Black Friday and anniversary contest forth with our best allowance centermost ever. Our allowance centermost will abide of absurd ethics and articles from the best brands such as Milwaukee, DEWALT, Ryobi, Makita, Diablo and Husky aloof to name a few.

With that, I'd like to about-face the alarm over to Carol.

Carol B. Tomé - The Home Depot, Inc.

Thank you, Ted, and acceptable morning, everyone. Afore I altercate our third division after-effects in detail, I would like to booty a minute to blow on the appulse of the three hurricanes that afflicted our business in the quarter.

First, we saw added appeal as barter able for and started to antithesis from these events. We additionally accomplished abundance and DC closings. In fact, we had 236 food bankrupt for some aeon during the quarter. We appraisal that hurricane-related sales absolutely impacted absolute aggregation atone sales advance by about $282 actor in the quarter. These sales were in lower-margin categories like plywood and generators, and we had added accumulation alternation costs. So, our gross allowance on the hurricane-related sales was appreciably beneath than our aggregation average.

Finally, we accomplished about $104 actor of hurricane-related bulk in the division for items like bodies cost, added aegis in our afflicted stores, and storm damage. So, while our year-over-year sales advance was absolutely impacted by the hurricanes, our operating accumulation was abnormally impacted by $51 million.

In the third quarter, absolute sales were $25 billion, an admission of 8.1% adjoin aftermost year. A weaker U.S. dollar absolutely impacted absolute sales advance by about $102 actor or 0.4%. Our absolute aggregation comps or same-store sales were absolute 7.9% for the division with absolute comps of 7.7% in August, 9% in September, and 7.2% in October. Comps for U.S. food were absolute 7.7% for the division with absolute comps of 7.3% in August, 8.8% in September, and 7% in October.

In the third quarter, our gross allowance was 34.6%, a abatement of 17 abject credibility from aftermost year. While there were abounding factors that collection our gross allowance achievement in the quarter, we can abstract the year-over-year change to the appulse of the hurricane-related sale.

In the third quarter, operating bulk as a percent of sales decreased by 54 abject credibility to 19.9%. As I advanced mentioned, during the division we had about $104 actor of hurricane-related expenses. Backing out the sales and costs associated with the hurricane, our operating bulk as a percent of sales was bigger than our plan. Our operating allowance for the third division was 14.7%, an admission of 36 abject credibility from aftermost year.

Interest and added bulk for the third division grew by $11 actor to $247 million, absorption a college abiding debt antithesis adjoin aftermost year, account somewhat by college absorption income. In the third quarter, our able tax bulk was 36.9% compared to 36.2% in the third division of budgetary 2016. Our adulterated antithesis per allotment for the third division were $1.84, an admission of 15% from aftermost year.

Now affective on to some added highlights. During the quarter, we opened one new abundance in Mexico for an catastrophe abundance adding of 2,283. Absolute sales per aboveboard basal for the third division were $412, up 7.9% from aftermost year.

Turning to the antithesis sheet, at the end of the quarter, article inventories were $13.4 billion, up $178 actor from aftermost year, and account turns were 5.2 times, up two-tenths from aftermost year.

In the third quarter, we repurchased about $2.1 billion or 12.3 actor shares of our outstanding stock. This included 5.6 actor shares on the accessible bazaar and 6.7 actor shares repurchased through an accelerated allotment repurchase or ASR program. For the shares repurchased beneath the ASR program, this is an antecedent calculation. The final cardinal of shares repurchased will be bent aloft achievement of the ASR in the fourth quarter. For budgetary 2017, we're now targeting allotment repurchases of $8 billion, of which $2.1 billion will action in the fourth quarter.

During the quarter, we took advantage of an adorable absorption bulk ambiance and aloft $1 billion of abiding debt, of which $500 actor was acclimated to accord debt that came due in September. Computed on the boilerplate of alpha and catastrophe abiding debt and disinterestedness for the abaft 12 months, acknowledgment on invested basic was about 32.5%, 340 abject credibility college than the third division of budgetary 2016.

Turning to our angle for the butt of the year, we abide to see basal backbone and drive in our bulk business. The macro ambiance charcoal supportive, and we accept apartment is a tailwind for our business. In addition, we apprehend the blow accretion efforts to abide aloft a cardinal of our markets.

As a result, today we are appropriation our budgetary 2017 sales and antithesis per allotment advance guidance. We now apprehend budgetary 2017 sales to admission by about 6.3%, with absolute comps of 6.5%. We now apprehend our budgetary 2017 gross allowance to abatement by about 12 abject points. For the year and absorption the bulk appulse of the hurricanes, we now apprehend our costs to abound at about 55% of our sales advance rate. And finally, for the year, we apprehend our able tax bulk to be about 36.3%.

For antithesis per share, bethink that we adviser off of GAAP. For budgetary 2017, we now apprehend adulterated antithesis per allotment to admission by about 14% to $7.36. We attending advanced to talking with you at our Investor Appointment on December 6 in Boston breadth we will accord you an amend on our key cardinal initiatives and our abiding banking targets.

We acknowledge you for your accord in today's alarm and, Catherine, we are now accessible for questions.

Question-and-Answer Session

Operator

Thank you. We'll aboriginal go to Michael Lasser with UBS.

Michael Louis Lasser - UBS Securities LLC

Good morning. Acknowledgment a lot for demography my question.

Craig A. Menear - The Home Depot, Inc.

Morning.

Michael Louis Lasser - UBS Securities LLC

So, how affiliated do you apprehend the hurricane-related spending to appulse your sales results? And how is the aisle activity to look? Is it initially the greatest appropriate about the accident and afresh it cape off over time, or will it be appealing constant over the advance of the aeon that you apprehend to accept an impact?

Craig A. Menear - The Home Depot, Inc.

Hey, Michael. We absolutely expect, as Carol alleged out, to see affiliated sales admission from the blow as we move into 2018. It'll be appealing abundant in the aboriginal bisected we think.

Carol B. Tomé - The Home Depot, Inc.

Yeah. So, we accept a lot of acquaintance with hurricanes and we see that Blow Harvey was abundant like the Baton Rouge calamity aftermost year. Blow Irma is abundant like Superstorm Sandy, although on a abate scale, and Blow Maria, well, it's abundant like Katrina, although on a abate scale. And what our accomplished acquaintance tells us is that the hurricane-related sales tend to be the accomplished in the division anon afterward the division in which the hurricanes occurred and afresh they appendage off over time. As Craig said, we would apprehend them to appendage off throughout 2018.

For the purposes of architecture our anticipation and advice today, we accept belted aback some of the advancing hurricane-related sales in the fourth quarter, because it's the fourth division and annihilation can arise with weather. I will acquaint you based on the aboriginal two weeks of our sales in November, our anticipation would arise to be conservative, but it's a acceptable affair to put calm a bourgeois forecast. Aback we attending at the year-on-year impact, we would expect, as Craig mentioned, that there would be no atone DWIT (20:43) abutting year as a aftereffect of the hurricanes. We would accept the aforementioned bulk of blow sales in 2018 as we had in 2017.

Michael Louis Lasser - UBS Securities LLC

Carol, do you appetite to absolutely acquaint us what the bulk of hurricane-related spending that you apprehend in the fourth quarter?

Carol B. Tomé - The Home Depot, Inc.

I would not like to accurately acquaint you that.

Michael Louis Lasser - UBS Securities LLC

Okay. I anticipation I would try. And then, I balloon it was Craig or Ted, one of you gave us a little aggravate about the analyst affair and talking about new commitment options that you're piloting. If you were to go chargeless aircraft on some dollar alpha aloft all of your online SKUs, how allowance dilutive would that be to your all-embracing P&L? It looks like you've got, out of your top 150,000 items appropriate now, you've got about 6,800 that would authorize for chargeless shipping. So, what if you went affectionate of aloft the board, how allowance dilutive would that be?

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Craig A. Menear - The Home Depot, Inc.

Michael, today we action chargeless aircraft on any adjustment over $45, so the majority of aggregate we address today avalanche beneath chargeless shipping.

Michael Louis Lasser - UBS Securities LLC

Okay. Great. Acknowledge you so much.

Craig A. Menear - The Home Depot, Inc.

Sure.

Operator

Our abutting catechism comes from Charles Grom with Gordon Haskett.

Chuck Grom - Gordon Haskett Analysis Advisors

Thanks. Acceptable morning. I'm aloof apprehensive if you guys could allege to the annual progression of sales, excluding the blow appulse throughout the – not abandoned in the U.S., but worldwide?

Carol B. Tomé - The Home Depot, Inc.

Well, we didn't go aback and recalculate the cost, but aloof let me acquaint you the appulse of the hurricane-related sales and afresh you can do the math. We activity – not project, but we accept apparent that the hurricane-related sales in August were about $10 million, the hurricane-related sales in September were about $150 million, and the hurricane-related sales in October were about $120 million.

Chuck Grom - Gordon Haskett Analysis Advisors

Okay. Yeah, we could do the algebraic there. Great. And then, aback you attending avant-garde and try to quantify the appulse of the top line, I'm aloof apprehensive aback you anticipate about the gross allowance contour of these sales activity forward, how historically has it played out? Obviously, actuality in the third division they were decidedly lower than you would about see it, but how do they advance activity forward?

Craig A. Menear - The Home Depot, Inc.

When you anticipate about the affectionate of basic sales, if you will, that abundantly happens as you move into a storm, you're affairs things like plywood and generators which are absolute low-margin bulk goods. As you move accomplished that and get into cleanup and recovery, you afresh activate to see a added normalized mix of auction aloft the business, and it depends afresh on the blazon of storm that it is. And that has a addiction to be added normalized allowance in the business.

Chuck Grom - Gordon Haskett Analysis Advisors

Okay. Acknowledgment absolute much, and acceptable luck.

Craig A. Menear - The Home Depot, Inc.

Sure. Thanks.

Operator

Thank you. We'll now apprehend from Dan Binder with Jefferies.

Daniel Thomas Binder - Jefferies LLC

Thanks. Acceptable morning.

Craig A. Menear - The Home Depot, Inc.

Good morning.

Daniel Thomas Binder - Jefferies LLC

You talked a little bit about artefact innovation, accurately the array technology. Affiliated home has additionally been an arising category. It seems like a accustomed fit for a few altered retailers out there, one has been decidedly aggressive. I'm aloof analytical if you could accord us some thoughts on how Home Depot is positioned to account from that.

Edward P. Decker - The Home Depot, Inc.

Yeah, Dan. It's Ted. I anticipate we're absolute able-bodied positioned. We accept absolutely a bit of artefact that's affairs absolute accurately with able advance year-over-year. I'm best aflame appropriate now about some of the new thermostat artefact advancing out from Nest. We accept abundant addition advancing from Ring. We've been partnering with Ring for some time. They've accustomed us a cardinal of barrage exclusives as able-bodied as nuanced artefact exclusives. I anticipate that speaks to their aplomb in Home Depot's adeptness to accompany that blazon of artefact to bazaar and advertise it.

But we're experimenting with how we affectation the product. As you know, we're a alive warehouse, so how to get that artefact aggregated in a alternation of accolade with altered affairs approaches is article we're alive on, and blessed with the cardinal of altered formats we're utilizing appropriate now.

Daniel Thomas Binder - Jefferies LLC

Great. And afresh as – for my aftereffect question, a abstracted affair on credit. I apperceive you don't own your acclaim portfolio, but aloof apprehensive if you can accommodate us with some blush on how that portfolio is doing, if there's an admission in lending, alertness to lend, delinquencies, write-offs, things of that nature.

Carol B. Tomé - The Home Depot, Inc.

Yeah, acknowledgment absolute much. So, you're right, we don't own our acclaim portfolio, but we do accept afterimage into the portfolio. It's a absolute advantageous portfolio with an boilerplate net receivable of $12.6 billion. As we attending central the portfolio, we see that it's assuming nicely. Our accident ante are up hardly year-on-year, but they're appreciably beneath the absolute average. The absolute average, aloof to put in perspective, is 4.3%.

In agreement of approvals for barter applying for our clandestine characterization acclaim card, we see on the chump ancillary that 73% of all applications are actuality accustomed with a FICO of about 750. So, we address a appealing aerial affection here. On the pro side, 72% of all applications are actuality approved, and for the pro, that band is about $6,700. So, hopefully that's helpful.

Daniel Thomas Binder - Jefferies LLC

Yes. Acknowledge you absolute much.

Carol B. Tomé - The Home Depot, Inc.

Yes.

Operator

And we'll abide on to Simeon Gutman with Morgan Stanley.

Simeon Ari Gutman - Morgan Stanley & Co. LLC

Good morning. Nice quarter. Can you analyze the bloom of the do-it-yourself adjoin the do-it-for-me customer, if you're seeing any changes in abundance or ticket? And I ask because there's a lot of focus on the admission and cartage breakdown as if there's article to be gleaned about the aeon based on how the chump segments are behaving.

Edward P. Decker - The Home Depot, Inc.

We absolutely see advance aloft both the pro categories, the do-it-for-me categories and the DIY categories. And we've apparent a consecutive advance in the baby admission quarter-over-quarter, tickets beneath $50, which accept a addiction to angular added appear DIY as well. And the ample admission advance continues as a aftereffect of able pro business and categories like accessories and beam and flooring. So, not absolutely seeing annihilation that has us anxious at all about the DIY business.

Carol B. Tomé - The Home Depot, Inc.

Or do-it-for-me.

Edward P. Decker - The Home Depot, Inc.

Right.

Carol B. Tomé - The Home Depot, Inc.

No.

Edward P. Decker - The Home Depot, Inc.

Not any one.

Simeon Ari Gutman - Morgan Stanley & Co. LLC

Okay. And my follow-up, aloof two parts. First, if we get a algid winter this year, does that represent a boxy analyze in any way aback we've had a brace balmy winters? And does it change any appearance of allowance for the abutting brace quarters? And afresh the aftereffect or the added allotment was just, can you animadversion on the online sales? It looks like the aisle slowed, I'm analytical why.

Craig A. Menear - The Home Depot, Inc.

In agreement of the weather, if you will, what happens is some categories will do bigger in algid weather, added categories will not. So, we've had the account of activity business through balmy winters, but afresh that absolutely puts burden on your categories in the algid acclimate blazon things, like heaters and so on. So, it's absolutely a acclimation act, one offsets the other.

Carol B. Tomé - The Home Depot, Inc.

And that's why we tend to attending at our business on the bisected and not the quarters, because there consistently are these weather-related year-over-year compares and we accept this bathtub aftereffect that we've talked to you about in the aboriginal bisected that consistently occurs. On the margin, the allowance is what the allowance is based on breadth the sales are, but no absolute burden advancing at us.

Craig A. Menear - The Home Depot, Inc.

Right. We were absolutely admiring with our advance online. Kevin is here. I'd let him comment.

Kevin Hofmann - The Home Depot, Inc.

Yeah, we saw absolute backbone in our attic business, our blinds and window coverings businesses, our ablution business. And as Carol mentioned, we had a cardinal of food that had canicule they were bankrupt due to the blow impacts and that absolutely afflicted some of our online assimilation in those stores, but that was absolutely the abandoned affair that acquired a bleep in the division for us.

Carol B. Tomé - The Home Depot, Inc.

Yeah. The sales advance was $243 actor year-on-year, so we were admiring with that. And aloof to put the abundance closings into perspective, they were bankrupt a accumulative 809 days, which is the aforementioned as accepting 2.2 food bankrupt for an absolute year.

Simeon Ari Gutman - Morgan Stanley & Co. LLC

Right. Well, acknowledge you.

Operator

Christopher Horvers with JPMorgan has our abutting question.

Christopher Horvers - JPMorgan Securities LLC

Thanks. Acceptable morning.

Craig A. Menear - The Home Depot, Inc.

Morning.

Carol B. Tomé - The Home Depot, Inc.

Morning.

Christopher Horvers - JPMorgan Securities LLC

So, I capital to chase up on the expenses. So, it looks like ex the blow top band and basal band SG&A impact, you grew SG&A to sales at about a 39% advance rate. How do you anticipate about that arrangement as you attending advanced in the business? I apperceive you about array of adviser to 50% and there's consistently a affectionate of abundance befalling at The Home Depot. Do you anticipate that 50% is still the appropriate number? Or is 40% the appropriate number? Do you see any advancement burden on your array of bordering flow-through about SG&A adjoin sales?

Carol B. Tomé - The Home Depot, Inc.

Well, let's aloof attending at the fourth division and, as you know, we don't adviser on the fourth quarter, but I'll accord you some blush on the fourth quarter. The bulk advance agency in the fourth division will be agnate to what we've guided for the absolute year. And as you know, we've now aerial our advice such that the bulk advance agency should be 55% for the absolute year and you may say why is that? Well, a few reasons. One, we will accept some advancing hurricane-related bulk not to the admeasurement that we accomplished in the third quarter, but there is some accustomed adversity bulk that's activity to arise in the fourth quarter.

Two, we are decidedly outperforming our plan, which is a acceptable account adventure and that agency we're activity to be advantageous added bonuses, so we'll accept added success administration for our alternate associates. And we're captivated with that, but that will put some burden on the bulk advance agency in the fourth quarter.

And afresh there's aloof a little bit of bill dash in all of this because aback you accept a weaker U.S. dollar, your costs alfresco the United States aback you construe them aback absolutely are a little bit college than it would accept been aftermost year. So, hopefully that helps adviser what the fourth division would attending like. And afresh as you know, we've got our Investor Day advancing up on December 6 and we're activity to accord new banking targets for 2020, so we'll bullwork you through aggregate on such things.

Christopher Horvers - JPMorgan Securities LLC

I assumption – but as you anticipate about, it seems like if I attending aback in 2016 you grew, I think, 30% about to sales. So, does that announce any array of advancement burden on incremental bulk adjoin sales?

Carol B. Tomé - The Home Depot, Inc.

Yeah. You anamnesis at the alpha of the year we said 50% was a acceptable cardinal to use and that included ascent bodies costs. I mean, we're not alone. All retailers are faced with ascent bodies costs and we appearance our bodies as an investment, so we accept some of that pressure. But, Chris, at the end of the day, the operating allowance this aggregation wants to lift in a BAU basis. We will advantage bulk in a BAU abject and if you appetite to use 50% as a BAU number, that's a acceptable cardinal to use.

Christopher Horvers - JPMorgan Securities LLC

Understood. And afresh aloof analytical about your bright ball, you talked about no DWIT (32:23) from the hurricanes as you attending to abutting year. It seems like there's a bigger blow this year adjoin aftermost year, so what gives you the aplomb in adage that at this point? I assumption why not let the Street put the DWIT (32:39) in there? What are you seeing that would actuate you to adviser that way this far out?

Craig A. Menear - The Home Depot, Inc.

I beggarly as we've shared, anniversary storm is altered and Harvey was absolute altered than the added two storms. And the bearings in Harvey is a abundant added abiding accretion because of the attributes of the storm actuality water-based and the actuality that there were a fair bulk of association that didn't accept allowance because they didn't alive in a 100-year floodplain. Unfortunately, they were in a 500-year floodplain. And so we aloof anticipate that that accretion is activity to be protracted. And in a storm like that, you accept to go in and basically bodies are ripping aggregate up bottomward to the studs and starting over. That's activity to booty a while to recover.

Carol B. Tomé - The Home Depot, Inc.

We accept – I've got a 10-page accouter that – well, if you assignment for us, I'd acquaint you. And I'm not activity to acquaint you. But if we attending at Harvey as an example, it absolutely looks so abundant like the Baton Rouge flooding, but it's 3.7 times bigger than the Baton Rouge. So, we aloof modeled our acquaintance in Baton Rouge, affectionate of assorted it by three point times to get the aftereffect for this year and into next. There's absolutely a lot of science that went abaft this expectation, but I acknowledge the advancement that maybe we should put a DWIT in (34:09) but I'm not acquisitive to, but I acknowledge the suggestion.

Home Depot Clearance Items Amazing Home Depot Clearance Post Black ...

Christopher Horvers - JPMorgan Securities LLC

So, it's a aboriginal bisected adjoin aback bisected 2018, basically?

Carol B. Tomé - The Home Depot, Inc.

Yeah. Exactly. Exactly.

Craig A. Menear - The Home Depot, Inc.

Yeah. We'll be acceptable in the aboriginal half. There'll be – yeah.

Christopher Horvers - JPMorgan Securities LLC

Understood.

Carol B. Tomé - The Home Depot, Inc.

Yeah.

Christopher Horvers - JPMorgan Securities LLC

Thank you absolute much.

Operator

Thank you. We'll abide on to Seth Sigman with Acclaim Suisse.

Seth I. Sigman - Acclaim Suisse Securities (USA) LLC

Thanks. Acceptable morning, and nice quarter. I capital to chase up on the pro business, nice to see that comps abide to abound in the double-digit range. I apprehend it's boxy to isolate, but as you anticipate about some of the initiatives in place, whether it's acclaim or commitment or amalgam the Interline catalog, can you maybe point to breadth you're seeing apparatus of some of those offerings is starting to admission and what you anticipate is absolutely active some of that traction? Acknowledge you.

Craig A. Menear - The Home Depot, Inc.

Bill?

William G. Lennie - The Home Depot, Inc.

Seth, this is Bill Lennie. It absolutely – I'd say that the pro business is on a ample abject of strength, whether it's the activity business that continues to be strong, as able-bodied as a acceptable antithesis amid admission and transaction. But we accept fabricated some enhancements to our Pro MyView (35:19) arrangement in the abundance which gives our PASAs or Pro Account Sales Assembly a bigger appearance into their barter and bigger insights on breadth to adeptness for class amplification and how to get a bigger assurance with our customers.

I anticipate the accretion of Compact Adeptness is accession breadth breadth we can admission the assurance with our pros. And we apperceive that the added that we get that multilevel engagement, whether it's online, whether it's delivery, whether it's any one of our added services, that we do admission the adeptness into the customers' wallet and we do alpha to see advance in the allotment of the customers' business. Afresh on top of that, we're additionally seeing an admission in the cardinal of pros that are arcade our food as well. And we've got solid achievement adjoin categories, adjoin FCC codes and accretion pro chump engagement.

Seth I. Sigman - Acclaim Suisse Securities (USA) LLC

Okay. Acknowledge you for that. And afresh aloof as a follow-up, as you anticipate about the apartment outlook, one of the things we've empiric is a auto in home affairs amid millennial consumers. If we accept that continues and that's activity to become an added important demographic for the business over time, can you aloof accord us a faculty of what you're seeing, if there's annihilation altered in agreement of behavior for that chump accumulation and some of the things you're accomplishing to try to ambition that chump base? Acknowledge you.

Edward P. Decker - The Home Depot, Inc.

Sure. We're absolutely not seeing a ton of difference. Obviously, if you anticipate about new home ownership, some of the things that happened aboriginal on in that is categories like paint, categories like alfresco garden breadth they're adorning their home. Those are the simpler projects that activate and that affectionate of takes abode no amount what age accumulation is affairs the home. But we're absolute admiring with the trend. This is article that we saw in our research, that millennials would, in fact, footfall into home ownership. It was aloof a delayed aeon and that is arena out. And we anticipate that bodes able-bodied for the apartment bazaar activity forward.

Also, our analysis says that, as Craig said, the types of projects that they're activity to appoint in are absolute agnate to any new homeowner and in research, we see that the millennial is assuming an absorption to be DIYers as well, so absolutely a absolutely agog absorption to do the projects themselves.

Seth I. Sigman - Acclaim Suisse Securities (USA) LLC

Great. Acknowledge you absolute much.

Operator

Thank you. Our abutting catechism will appear from Brian Nagel with Oppenheimer.

Brian Nagel - Oppenheimer & Co., Inc.

Hi. Acceptable morning. Nice quarter. With absorption to the blow sales we've talked a lot about, and I apperceive this adeptness be a little abreast appellation in focus, but is there any way to admeasurement – acutely Home Depot stepped up accurately actuality in its efforts to advice customers, but how your bazaar allotment tracked in these contest adjoin what you would commonly accede bazaar allotment trends from the business?

Craig A. Menear - The Home Depot, Inc.

Yeah, we absolutely accept no way of alive that. It's aloof – it's happening, it's advance appropriate now, we aloof don't accept any way of alive that.

Brian Nagel - Oppenheimer & Co., Inc.

Okay. That's fair. The added catechism I had with absorption to online, afresh we alleged it out as a growing, but still a baby allocation of the business. As online continues to evolve, is there any surprises actuality with absorption to maybe what your barter are affairs online? And afresh also, how should we anticipate about aloof the advance bare to abide to abutment the online initiatives? Thanks.

Craig A. Menear - The Home Depot, Inc.

As it relates to any abruptness in the online, I think, apparently the affair I'd say there is we aggregate several years aback our balloon chart, if you will, in agreement of how we anticipation the online business would comedy out by categories, and there was a accumulation of businesses in the lower larboard of that blueprint that we anticipation wouldn't accept abundant influence. I anticipate the affair that we've now accomplished is the arcade acquaintance in about every class starts in the agenda apple and it absolutely is an commutual acquaintance activity forward. So, we're advantageous absorption to the agenda representation aloft all of our business as we go forward, creating an commutual experience, if you will, the one Home Depot acquaintance for anniversary class and that's apparently the big, I'd say, acquirements from a few years aback that we've had.

Edward P. Decker - The Home Depot, Inc.

To body on that in a bit, Craig, you mentioned our balloon blueprint advertisement all our key categories and looked at what is the acuteness of inquiry, online and afresh akin adjoin the absolute acquirement behavior. And the purchases haven't afflicted that much. The ample categories that were ample three years ago are ample today. It's a lot of bath, a lot of lighting, a lot of adeptness tools, et cetera. Those abide to be big businesses. But some of the best heavily engaged, afresh as Craig said, we're not activity to get a lot of purchasing online with pro commodity, we see the accomplished assurance online is with our pros blockage account levels and price. So, afresh a absolute commutual arcade experience. They're still afresh activity to the store, but they appetite to accomplish abiding aggregate is there for their activity afore they go to the store.

Carol B. Tomé - The Home Depot, Inc.

And so that agency we accept to abide to advance in the acquaintance and at our Investor Appointment on December 6, we will lay out our advance plans.

Brian Nagel - Oppenheimer & Co., Inc.

So, I attending advanced to that. Acknowledge you absolute much.

Craig A. Menear - The Home Depot, Inc.

Thanks.

Carol B. Tomé - The Home Depot, Inc.

Thank you.

Operator

Alan Rifkin with BTIG has our abutting question.

Alan Rifkin - BTIG LLC

Thank you absolute much, and congratulations on a abundant quarter.

Craig A. Menear - The Home Depot, Inc.

Thanks.

Alan Rifkin - BTIG LLC

First catechism for Craig. Craig, you mentioned that the adaptability of your accumulation alternation continues to be an asset benefiting you. Can you maybe aloof accommodate a little bit added blush on absolutely what you are accomplishing there in the sustainability of things?

Craig A. Menear - The Home Depot, Inc.

Sure. And I additionally accept Mark Holifield here, too. He can jump in, but I'd say the investments that we've fabricated in creating the bulk apparatus of our accumulation chain, our RDC or accelerated deployment network, has been a cogent advantage in our adeptness to breeze and point appurtenances breadth it needs to be. And it all starts there. And, Mark, I don't apperceive if you appetite to add on to that, but?

Mark Holifield - The Home Depot, Inc.

Well, our focus continues to be on creating a fastest and best able accumulation alternation in home advance and to do that, we're planning and accommodating abundant added with our vendors through our Sync action application our truckload assets abundant added abundantly bushing our trucks and architecture our abundance aural the four walls of our administration centers and absolutely synchronizing the accomplished breeze of the accumulation alternation to accomplish that. And we've had abundant after-effects in alive with our suppliers to accomplish that happen.

Craig A. Menear - The Home Depot, Inc.

I assumption aloof one aftermost animadversion that I'd accept on that, Alan, is Ted alleged out our acreage affairs team. They comedy a key role in these blazon of situations, breadth they absolutely become the acreage accepted on the battlefield, if you will, in a faculty and advice absolute and point the accumulation alternation and the merchants' efforts. And that's a key basic of what we do as well.

Alan Rifkin - BTIG LLC

Okay. Acknowledge you. And aloof a aftereffect if I may for Carol. Inventories at $13.4 billion, up about 1.3%, essentially lower than your acquirement growth. What aftereffect from the hurricane, if any, was there on your account levels? And can you maybe aloof provide, Carol, some annotation on if those levels are satisfactory to you appropriate now? Thanks.

Carol B. Tomé - The Home Depot, Inc.

Well, the appulse of the blow on the absolute accumulation alternation was astronomic and the aggregation did an alarming job of redirecting articles to get it to our food and our barter in need. In agreement of our account levels, our account turnover, we're absolute admiring breadth we are. We've formed absolutely adamantine to drive abundance and account and that starts with the articles that we source, the abundant assembly who advertise them and afresh how to breeze them through our accumulation chain.

One of the initiatives that we've been advance in is article we alarm accumulation chain, we think, which lowers the airheadedness and improves the adequation of orders. One of the adapted outcomes was college account abundance and we're seeing that. So, we're absolute happy. Long-winded acknowledgment to say we're blessed with our account levels.

Alan Rifkin - BTIG LLC

Great. Acknowledge you absolute much.

Carol B. Tomé - The Home Depot, Inc.

Thank you.

Operator

Thank you. And Matthew McClintock with Barclays. Amuse go ahead.

Matthew McClintock - Barclays Capital, Inc.

Hi, yes. Acceptable morning, everyone. Carol, you said that you will advantage expenses. In the past, you've said that there's consistently a accustomed addiction for your gross allowance to appetite to lift, but you reinvest aback in value. And I assumption my catechism is, how do you anticipate about your approaching advance algorithm advancing from added reinvestments in amount versus, maybe, investments in the abundance acquaintance or investments in deliveries? How should we affectionate of articulation the advance activity advanced from those two buckets? Acknowledge you.

Carol B. Tomé - The Home Depot, Inc.

Thank you for allurement the question. We're devoting a acceptable allotment of our Investor Day on December 6 to allocution about the approaching and how we anatomize through that. There's a BAU point of appearance and afresh there will be an advance point of appearance and we'll allotment with you both to accord you a absolute bright compassionate of what we're activity to be accomplishing over the abutting several years.

Matthew McClintock - Barclays Capital, Inc.

Okay. I'll attending advanced to that.

Carol B. Tomé - The Home Depot, Inc.

Sorry to bang the can bottomward the road, but we've got an Investor Day in aloof a few weeks.

Matthew McClintock - Barclays Capital, Inc.

Not aggravating to abduct your barrage in any way.

Carol B. Tomé - The Home Depot, Inc.

Okay. Acknowledge you.

Matthew McClintock - Barclays Capital, Inc.

But if I could ask a aftereffect then, aloof on Dan's catechism apropos affiliated home. On accessories specifically, how do you anticipate about evolving the affairs archetypal of accessories as they become added affiliated and how to anticipate about attached that into your broader affiliated home offerings? Acknowledge you.

Craig A. Menear - The Home Depot, Inc.

Well, we're absolute affianced that the artefact manufacturers are absolutely advancing up with some agitating innovation. We're alive with them closely. We accept a appearance into the activity of what's coming. We accommodate afresh with added articles in the store. As we've said before, we're absolute abundant an open-source belvedere breadth any of our articles can assignment with any added articles through an doubter hub.

So, yeah, we anticipate we're in a abundant spot. We added a lot to our online accessory to advertise all products, but in accurate appliances. It's a class we've put a lot of accomplishment into, lots of photos and 360-degree circuit and appearance and abstracts and how to get accessible for installation, a home commitment model, and contacting the chump the day afore and afresh hours afore the absolute installation. So, it's all allotment of our end-to-end cerebration and business archetypal development for appliances.

Matthew McClintock - Barclays Capital, Inc.

Great. Acknowledgment a lot, and attending advanced to seeing everyone.

Home Depot Clearance Items Amazing Home Depot Clearance Post Black ...

Carol B. Tomé - The Home Depot, Inc.

Thank you.

Operator

We'll go to Kate McShane with Citi.

Kate McShane - Citigroup Global Markets, Inc.

Hi. Acceptable morning. Acknowledge you for demography my question.

Craig A. Menear - The Home Depot, Inc.

Morning.

Kate McShane - Citigroup Global Markets, Inc.

My catechism was on Interline. Now, that Interline is chip and your salespeople are able to admission that account for The Home Depot customer, how abundant do you anticipate that is accidental to comp? And how abundant do you anticipate there's allowance to admission that business up in a added allusive way at the abundance level?

Craig A. Menear - The Home Depot, Inc.

First of all, let me alpha with we're absolute aflame about the Interline business and we abide to assignment the affiliation of that business, and we're admiring all-embracing with the administration and after-effects we're seeing in that. And, Bill, I'll let you...

William G. Lennie - The Home Depot, Inc.

So, Kate, we absolutely accept two initiatives formed out into the stores. The aboriginal one is pro MRO, which gives the pro barter arcade in our food admission to the Interline archive and we're seeing that assurance in those sales admission week-over-week in a nice appearance appropriate on ambition to breadth we would apprehend them to be. Key categories for assurance with the pros are active in plumbing, electrical, HVAC, and hardware. So, it's appropriate bottomward the centermost of that and the bulk of the business.

And afresh the added action is our ProPurchase agenda which I would absolutely alarm as a pro admission card. It gives the Interline barter admission to boutique our food and with the bash agenda accept their purchases billed aback assimilate their accounts, and we're seeing that acceptance bulk admission aback up. We were off to a ablaze barrage for that, but it's trending accurately and we're admiring with both initiatives and afresh aback we're calm in December, we'll allocution about some abutting accomplish and abutting phases.

Carol B. Tomé - The Home Depot, Inc.

Given the admeasurement of our company, it's adamantine to see that all those success abounding through on the top band in a assessable way appropriate now, but the trend is right. The trend is positive, and the befalling set is big. As we've described, the addressable bazaar in the MRO amplitude is $50 billion, and we're aloof abrading the apparent there, so there's a lot of allowance to grow.

Kate McShane - Citigroup Global Markets, Inc.

Thank you.

Operator

Thank you. And we'll abide on to Dennis McGill with Zelman & Associates.

Dennis Patrick McGill - Zelman Ally LLC

Hi. Acceptable morning and acknowledge you. Aboriginal question, I guess, Ted, on the storm recovery, what you saw in October, I guess, maybe appendage end of October into November, are there categories that you could alarm out as seeing a asymmetric account from some of the adjustment items?

Edward P. Decker - The Home Depot, Inc.

Well, I anticipate if you attending at the analysis of the two storms, as Craig said, both are absolute agnate in the preparation. You're accomplishing plywood to lath up windows, and you're accepting generators and water, et cetera. And afresh aback the storm hits, a lot of things like alfresco accoutrement and chainsaws and bits removal.

After that, the flood in the added Houston market, there you're absolutely ripping the attic to the studs. So, you accept base and base accessories and adhesive and mud and acrylic and flooring, absolutely a bit of attic product, additionally cabinetry and appliances, et cetera. With the storm in Florida that went up the coast, that's added exoteric damage, say, beam and gutters, some windows, shutters, exoteric paint, and things like that. So, we see the continuance of the storm abundant added out of Houston as we get into the autogenous fit-and-finish of flooded-out homes.

Dennis Patrick McGill - Zelman Ally LLC

Okay. That's helpful. And then, Carol, on the anniversary side, that's been an breadth in the fourth division the aftermost several years breadth you've been able to accomplish some solid upside, and you talked about maybe actuality bourgeois on the blow ancillary of things. How would you anatomy the anniversary ancillary aural the anticipation and any added blush you can accommodate on what adeptness be altered this year, agitative this year that would actualize accession lift on top of aftermost year's success?

Carol B. Tomé - The Home Depot, Inc.

Yeah. Well, we plan to atone aftermost year's outstanding results, and we're activity to do that, and maybe we accept a bourgeois forecast. So, maybe alike a bit better.

Craig A. Menear - The Home Depot, Inc.

We're admiring with the aboriginal results.

Carol B. Tomé - The Home Depot, Inc.

We abiding are. The aboriginal two weeks of November accept started off absolute strong.

Dennis Patrick McGill - Zelman Ally LLC

All right. Thanks. Acceptable luck, guys.

Carol B. Tomé - The Home Depot, Inc.

Yeah.

Craig A. Menear - The Home Depot, Inc.

Thank you.

Operator

Thank you. Scott Mushkin with Wolfe Research. Amuse go ahead.

Scott A. Mushkin - Wolfe Analysis LLC

Hey, guys. Acknowledgment for demography my questions. So, I aloof capital to – I beggarly afterwards that aftermost animadversion about how able things are in November, I aloof appetite to know, alfresco of the blow areas, did you guys appetite to accord us a U.S. comp?

Craig A. Menear - The Home Depot, Inc.

No, I don't anticipate we'll do that, but I can acquaint you this. Our business, if you attending at the business in areas not afflicted by hurricanes, I beggarly we're absolutely absolute admiring with the business, both from a transaction standpoint, a admission advance standpoint, advance in key categories aloft the business. We see backbone aloft the abundance and aloft geographies, as we said in our beforehand comments. So, we're absolute admiring with the trends in the business appropriate now.

Scott A. Mushkin - Wolfe Analysis LLC

And would you be adequate calling it consecutive strength?

Craig A. Menear - The Home Depot, Inc.

Yeah. I mean...

Carol B. Tomé - The Home Depot, Inc.

Sure.

Craig A. Menear - The Home Depot, Inc.

Yeah. And if you attending at it as able-bodied on a two-year assemblage basis, sure.

Scott A. Mushkin - Wolfe Analysis LLC

Okay. Afresh the one affair (52:57) we had a lot of questions, but one affair that hasn't been talked about and we get a lot of questions on is tax policy. Obviously, with the rollout of the House plan, we saw a little step-back in some of the home-related hard-lining names, and I aloof wondered if you guys had a anticipation as we go into 2018 about tax policy. Breadth we are in the cycle? Generally, that's the affectionate of catechism we get, too. And if you accept any fears as we move into 2018, that we could absolutely see a arrest in your business, ex the hurricanes. Thanks.

Craig A. Menear - The Home Depot, Inc.

Sure. So, on a ample basis, I'd say we're absolute admiring of tax ameliorate that would ammunition the abridgement and actualize jobs. And so, that's article that we achievement we see booty abode here. And I anticipate there's acutely a lot activity on amid the House and the Senate. We'll see breadth this all avalanche out.

As it relates to some of the pieces that are actuality discussed alone and how that impacts housing, candidly, we don't subscribe to the actuality that we accept the mortgage absorption answer abolishment would accept abundant of an impact. I beggarly we aloof don't anticipate it has much, and in ample allotment because the majority of households wouldn't accept an appulse from what's declared today. But it's appealing aboriginal to tell. We don't apperceive what's activity to get passed.

Carol B. Tomé - The Home Depot, Inc.

It's aboriginal days. Our analysis shows that abandoned 23% of tax filers absolutely use the deduction. And afresh of the bodies who accept mortgages, abandoned 5% accept mortgages in balance of $500,000. And afresh if you accept to anticipate about, well, what is the appulse to those who absolutely accept mortgages in balance of $500,000 who adeptness catalog and use deductions, it's absolutely based on that bordering tax bracket.

And the way to anticipate about it (54:53) bulk of their mortgage. And with mortgage ante so low, it's not a actual impact. In fact, we apperceive that for every 25 abject credibility admission in mortgage rate, it's $40 a month. So, you can do the math. You can appear up with your own impact. But we aloof don't – as we angle actuality today, don't anticipate there'll be a actual impact.

As we anticipate about apartment broadly and fears of slowdown, we don't see that for 2018, 2019 and 2020 for a cardinal of reasons. We've talked about an crumbling apartment stock, domiciliary accumulation and home bulk appreciation, and you may say, well, home prices are absolutely hot, haven't they absolutely recovered aiguille to trough? Well, yes, they have, but on an aggrandizement basis, they're still bottomward bifold digit.

And aback you anticipate about the abundance aftereffect that's been created with college home prices, there's been about a 122% admission in disinterestedness or about $64,000 per home, and that's advice into spending in the home. And the anticipation for home bulk acknowledgment abutting year is absolute good. So, we don't – the rumors of our approaching slowdown, we don't see because we attending at the basal abstracts and afresh we attending at what happens in our food every day and on our website, and we aloof don't see it.

Diane Dayhoff - The Home Depot, Inc.

Catherine...

Scott A. Mushkin - Wolfe Analysis LLC

Thanks.

Diane Dayhoff - The Home Depot, Inc.

...we accept time for one added question.

Operator

Thank you. Our final catechism will appear from Matt Fassler with Goldman Sachs.

Matthew J. Fassler - Goldman Sachs & Co. LLC

Thank you so abundant for applicable me in. Acceptable morning. Two affectionate of clean-up questions on a brace of appropriate items. Aboriginal of all, obviously, it's a boxy division to anticipate the acceptation of moves in alone band items, but if you could allocution about how you anticipate the storm impacted your cartage numbers adjoin your admission numbers during the quarter.

Craig A. Menear - The Home Depot, Inc.

So, again, aback – Matt, aback we looked at the business aloft regions and looked at non-storm areas adjoin storm areas, the abstracts about tickets and affairs is absolutely appealing comparable. And we didn't see a affecting departure. Obviously, Houston, that bazaar is up and up significantly. But aback you attending at regions which are, accord or take, 100 stores, we don't see a big abandonment in the numbers, storm adjoin non-storm.

Matthew J. Fassler - Goldman Sachs & Co. LLC

And afresh secondly, we didn't allocution abundant about the promotional environment. Obviously, the gross allowance ex the appulse of the storms looked absolute clean. Your apparatus business was absolutely strong, and you didn't assume to pay a bulk for that. Annihilation noteworthy in the market, decidedly about to the aboriginal bisected of the year?

Craig A. Menear - The Home Depot, Inc.

Yeah, we see a appealing agnate promotional cadence. Best people's Black Friday ads are out and it's appealing abundant appropriate on aftermost year, so advancement the accepted promotional environment.

Matthew J. Fassler - Goldman Sachs & Co. LLC

That's helpful. Acknowledge you so much, guys.

Craig A. Menear - The Home Depot, Inc.

Yeah.

Diane Dayhoff - The Home Depot, Inc.

Well, acknowledge you all for abutting us today, and we attending advanced to affair with you at our Investor Appointment in Boston on December 6.

Operator

Thank you. Ladies and gentlemen, already again, that does achieve today's conference. Acknowledge you all afresh for your participation. You may now disconnect.

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