A：During the fourth quarter, the merchandising departments posted positive comp sales across various categories such as power, electrical storage, indoor garden, hardware, plumbing, bath, and kitchen.

A：The comp average ticket increased by 2.4% during the fourth quarter, while comp transactions decreased by 1.6%. This increase in the average ticket primarily reflects price increases and a greater mix of higher ticket items.

A：Strength was seen across categories such as power, plumbing, and electrical in the fourth quarter. Pro categories outperformed DIY categories, and there was strength in the gift center, hand tools, storage, portable power, and hardscapes. Total company online comp sales leveraging digital platforms increased significantly.

A：This quarter, the company introduced real-time delivery tracking for big and bulky deliveries, providing customers with greater visibility and certainty on delivery timing, which is expected to lead to incremental customer engagement and increased sales.

A：The company's events, including the appli gift center and Black Friday, saw strong engagement and record sales years.

A：Fiscal 2024 had total sales of $38.2 billion, a decrease of $1.5 billion from the previous year. The fourth quarter's total company comp was positive 0.4%, with US comp sales of 0.3%. For the year, sales increased by $5.2 billion, and total company comp sales increased.

A：Gross margin decreased by approximately 100 basis points, operating expenses as a percent of sales increased by 1500 basis points, and operating margin decreased to 10.1% from 11.3% in the fourth quarter of 2024.

A：During the fourth quarter, the company invested approximately $1.1 billion in capital expenditures, bringing total capital expenditures for fiscal 2025 to $3.7 billion. The number of stores opened during the year brought the store count to 2,994 at the end of fiscal 2025.

A：The effective tax rate decreased, and diluted earnings per share for the fourth quarter were $2.58, a decrease of 14.6% compared to the fourth quarter of 2024. For the year, diluted earnings per share were $14.23, a decrease of 4.6% compared to fiscal 2024.

A：The main factors pressuring housing and home improvement demand include the current mortgage rate environment, a significant increase in home prices since the X line, low housing turnover since 2023, and customer concerns over general economic uncertainty such as inflation, job growth, and higher financing costs.

A：The company expects to continue growing its market share with comp sales ranging between flat to modest growth, with total sales growth anticipated to be between approximately script script and Rick Rick. New stores and SRS locations are expected to be opened.

A：The expected gross margin is approximately 30.1%, with an operating margin targeted at about 12.4% to 12.6%, and an adjusted operating margin of about 12.8% to 13%. The effective tax rate is expected to be approximately 24.3%, and net interest expense is anticipated to be around $2.3 billion.

A：The company is leveraging digital planning tools, product management enhancements, and AI tools to improve project management for pros. Initiatives include an AI takeoff scheme that allows pros to build projects by typing in the type of project and having the app pre-populate a list of items for editing and future jobs.

A：The company has introduced a delivery handheld device that enables tracking of delivery status and progress, ensuring customer needs are met. This technology also supports live tracking on big and bulky items, a feature that was previously only available for small items.

A：SRS sales in the fourth quarter were down low single digits year-over-year. Despite this, the company took market share in the quarter, with GMS performing exceptionally well considering the challenging industry conditions, which pulled down the entire year's shipments to the lowest annual volume since 2019.

A：Recent enhancements to the delivery capabilities for pros include the introduction of AI tools for project management and list building, specifically an AI takeoff scheme that allows pros to build projects by simply typing in the type of project they're working on. This pre-populates a list in the app which pros can edit, save, and repeat for future jobs.

A：The communication with customers on job sites has evolved to allow communication with many people, including the job site owner and others involved in the delivery process. This change is aimed at providing a more comprehensive and efficient communication experience.

A：The delivery handheld device is a tool used by drivers to track the status of all deliveries, the progress being made, and to fulfill other requests from customers, ensuring that the specific needs of the service on their particular job sites are being met.

A：The adoption of the delivery tracking feature on bulky items has been very well received by customers, as it enables them to track items such as flatbeds with lumber or appliances, which was a highly anticipated feature by the customer base.

A：The roofing industry's performance in the fourth quarter was negative, with sales down in the low single digits year over year, according to Armstrong. This was attributed to the lowest industry volume since 1985 due to a particularly bad quarter, which affected the entire year's sales volume.

A：SRs sales performance in the quarter was exceptionally strong, taking share in the quarter with respect to GMS. This was particularly noteworthy given the challenging context of the fourth quarter and the absence of expected storms in the previous quarter.

A：The expectations for SRS in 2023 are for mid-single-digit organic sales growth. The pricing environment faced significant pressure due to lack of demand in the market, but they expect to grow sales and maintain share gains which will affect their margin expectations for the first quarter.

A：Revenue synergies are being worked on by focusing on combined sales and customer approaches. An example includes turning a multifamily construction and property management company into a customer of both HD Supply and The Home Depot for SRS and GMS. The companies are also seeing progress in pilot markets with Home Depot and SRS on roofing leads and have mapped their common customers to facilitate communication between sales reps.

A：Historically, the highest correlation to home improvement activity has been with home prices. Markets with lower turnover rates and housing price declines are seeing reduced home improvement activity.

A：Turnover is currently not showing meaningful price declines, with prices either still going up in some markets or adjusting down in others. Sales are stronger in some markets, while they are more challenged in others where prices are declining. However, the price declines that have occurred are still within a window where they are not significantly impacting turnover.

A：Factors considered in the outlook include tax impacts, potential changes in the trade environment such as tariffs, and improvements in affordability related to income growth and changes in mortgage rates. The outlook range is flat to 2%, and the company believes it will outperform the market which is expected to be down 1 to up 1. Factors like improved affordability and modest price adjustments could point to stronger market performance.

A：The company is not heavily counting on tax stimulus for significant support. Given the large range of potential impacts from tax relief, such as refunds and adjusted rates, the company is not planning on receiving substantial benefit from tax stimulus. The expected impact is likely to be minimal and could be used for debt paydown or savings, especially for lower-income deciles or higher-income deciles respectively.

A：The company is closely analyzing the impacts of recent tariff announcements but is confident in its position, as more than 50% of their projects are not subject to tariffs. The company's teams, including merchants, finance, supply chain, logistics, and sourcing offices, have been working through the impacts of tariffs for nearly a year. The company has mostly completed related pricing actions, and while their exposure is mid single digits with a SKU price impact of about 3%, they are confident in their teams' ability to advocate for value and continue providing low prices to customers.

A：Continued consumer uncertainty is the number one driver of the company's challenges, leading to reluctance in investing in large projects. This uncertainty is related to consumer confidence and sentiment, the jobs picture, price levels, and overall economy. Home price decreases could also have a negative psychological impact, further affecting consumer confidence and driving lower turnover.

A：The company expects their comps in the second half to be slightly higher than in the first half, primarily due to the absence or presence of Ed storm activity. Additionally, they expect gross margin to decrease by about 24 basis points year over year, with the largest impact seen in the first quarter and an improvement throughout the year. Operating expense as a percentage of sales is expected to be at its highest level in the first quarter, and year-over-year EPS performance is expected to be mid single-digit percentage negative, influenced by acquisition annualization and timing comparisons.