Good day, and welcome to The Home Depot Quarter Four 2017 Earnings Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Diane Dayhoff, Vice President, Investor Relations. Please go ahead, ma'am.

Thank you, Abby, and good morning to everyone. Joining us on our call today are Craig Menear, Chairman, CEO and President; Ted Decker, EVP of Merchandising; and Carol Tomé, Chief Financial Officer and Executive Vice President, Corporate Services. Following our prepared remarks, the call will be opened for analysts' questions. Questions will be limited to analysts and investors and as a reminder; we would appreciate it if the participants would limit themselves to one question with one follow-up, please. If we are unable to get to your question during the call, please call our Investor Relations Department at 770-384-2387. Now, 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, Diane, and good morning everyone. Before I start, I’d like to recognize Diane Dayhoff. This is Diane’s last earnings call, and I want to thank Diane for all her amazing contributions to the company in her nearly 15 years. And so Diane we wish you all the best in retirement.

Thank you.

Fiscal 2017 was another record year for our business and we achieved the highest sales in net earnings in company history. Fiscal 2017 sales grew $6.3 billion to $100.9 billion and an increase of 6.7% from fiscal 2016, while diluted earnings per share grew 13% to $7.29. Sales for the fourth quarter were $23.9 billion up 7.5% from last year. Comp sales were also up 7.5% from last year and our U.S. stores had a positive comp of 7.2%. Diluted earnings per share were $1.52 in the fourth quarter. We continue to see broad-based growth across the stores and our geographies. All three of our U.S. divisions posted positive comps in the fourth quarter, but we did see more variability in regional performance than we have in several quarters due to weather. Internationally, both Mexico and Canada posted another quarter of positive comps in local currency. While sales did benefit from hurricane recovery efforts, we also had hurricane related expenses. Our merchants, store teams, supplier partners and supply chain teams did an outstanding job delivering value and service to our customers throughout the quarter both in stores and in and online. As Ted will detail, both ticket and transactions grew in the quarter and we saw a growth in both pro and DIY categories. Pro-sales once again outpaced DIY sales in the quarter as the work that we’re doing to enhance service capabilities for our pros continue to resonate. We were pleased with the growth of sales to our DIY customers who also gave us a likelihood to shop again score of 86% up almost 150 basis points from last year. Our interconnected business made great strides in 2017 as the team continued to enhance our digital assets to enable a more seamless experience for our customers no matter how…

Thanks Craig and good morning everyone. We had a strong fourth quarter where sales exceeded our expectations. We saw strength across the store led by our pro customer and our online sales continued their double-digit growth. Looking at our departments, lumber, electrical, and tools had double-digit comps in the quarter. Appliances, plumbing, and building materials were also above the company’s average comp. Decor, flooring, millwork, paint, indoor garden, hardware, outdoor garden, and kitchen and bath were positive, but below the company average. Lighting recorded a low single-digit negative comp primarily due to LED price deflation. In the fourth quarter, we saw a growth in both ticket and transactions. Comp average ticket increased 5.5% and comp transactions increased 1.9%. Commodity price inflation in lumber, building materials and copper positively impacted average ticket growth by approximately 105 basis points. Foreign exchange rates also positively impacted average ticket growth by approximately 42 basis points. Big ticket sales in the fourth quarter or transactions over $900 which represent approximately 22% of our U.S. sales were up 9.8%. The increase in big ticket sales was driven in part by strength in vinyl plank flooring, fencing and appliances. Transactions for tickets under $50 which make up approximately 16% of our U.S. sales grew by 0.8% in the quarter. In the fourth quarter, we saw strong sales with both our DIY and pro-customer. Sales for our professional customers grew double digits in the quarter. Pro-heavy categories, lumber, pressure-treated decking, insulation and gypsum all had double-digit growth during the quarter with solid unit productivity. Our paint initiatives continue to gain traction, as we saw strong sales to both our pro-and DIY customers throughout the quarter. Turning to our DIY customers, we saw a terrific response to our events throughout the quarter. Traffic was strong both in-store and online…

Thank you. [Operator Instructions] We will take our first question from Simeon Gutman with Morgan Stanley. Please go ahead.

Thanks. Good morning everyone and congratulations, Diane. My first question is on the topline in the fourth quarter. You were cycling two warm winters and I realize the hurricane was some benefit in the quarter, but if you look at the underlying run rate of the business, is there anything to glean – like did the business – or the fact that some of these categories were still hanging in despite you had more normalized weather, does that mean we should see an even stronger spring when we get there?

I think overall, we are first of all very pleased with the performance in the quarter both across categories, as well as geographies. To your point, we definitely had benefit from hurricane recovery sales partially offset by actually a real winter in January this year. Carol, you might want to share just how we’ve made up the fourth quarter. Carol Tomé: Yes. So we were really pleased with the result in the fourth quarter. Clearly, the hurricane sales were higher than what we had included in our guidance at the end of third quarter, so we were pleased with that. But the business, just the underlying business was very strong. As Craig pointed out, we had winter. And if you look at the month of January alone and the comps across our division, the comp in the western division and the southern division in the month of January was higher than the comp for the company for the quarter. Now in the north where we had real winter and I think you experienced that winter, our comp was low single digit as you expected. So what does that mean? We should have a great spring, I would think when you have a normal winter.

Okay. And then my second question, looking at the housing market in total and then maybe looking at the market color that you guys have. In more mature markets where the housing market has already recovered. Can you talk about any trends good and bad? And then alternatively in less mature recovery market anything that you’re seeing that’s encouraging about the pace of sales in those markets? Carol Tomé: Yes. So as Craig mentioned, if you look at the variability in our regions, the spread was a bit wider than we’ve seen in the past several quarters, but that’s because of the hurricane-related sales where we had high, high double digit comps. But if you ignore the hurricane-related sales you actually see the variability tightening. And that’s actually because the economic environment in the cities that have recovered is robust, and there’s a housing shortage. So let’s take a look at San Francisco for example. San Francisco is very robust. The month of supply in San Francisco [Indiscernible], so we continue to see strong growth there. In areas at the countries that haven’t fully recovered, well, good news there too. So, housing as an asset class across the country continues to look very good.

I think one other comment on that. If you look at a market like Dallas which has had tremendous growth in home value appreciations, the affordability index is still terrific, so we’re looking at housing continue to be tailwind for us.

Okay. Thank you very much.

We will take our next question from Brian Nagel with Oppenheimer. Please go ahead.

Hi. Good morning. Nice quarter.

Thank you.

Congratulations, Diane. So, I want to just go over quickly on Simeon’s question on hurricane. So, if we look at the cadence for the business over the last couple of quarters, it seems like you actually got a bigger benefit from the hurricanes here in the four quarter, which was little surprising to us. Any new insights as we’re watching these sales come through as to how long these benefits persist into 2018?

So overall the fourth quarter was almost comparable to the third quarter in terms of total benefit which as Carol mentioned, fourth quarter was slightly stronger than what we had anticipated. When we look at the go-forward in the business for 2018, we expect the sales from hurricanes to be somewhat comparable to what we experienced in 2017 overall, and most of that coming in the first half of the year. Carol Tomé: Right. So just to put the numbers behind that we believe we had $652 million of hurricane-related sales in the back half of 2017. And we expect to have that same number of sales in 2018. The difference of course is that the 2018 sales will be a little bit more profitable than what we experienced in 2017, in fact when you add it all up we lost money on those sales. We lost about $11 million on those sales in 2017 and expect [indiscernible] a little bit of money on those sales in 2018.

And then my follow-up question, Carol, you mentioned in your prepared comments just the – pull forward a bit in the cadence of investments that you laid out in the Analyst Day, now that the tax legislation was just passed. Any more color on specifically what investments you’re pulling forward earlier? And then, how should we think about – with that, the potential return on those investments? Carol Tomé: Yes, happy to. So let me just give you a breakdown of our expense growth factor guidance for 2018. Our core expenses will grow at about 45% of our sales growth next year. We add to that then about 10% related to acquisition. As we’ve talked in the past, our acquisitions have more variable expenses than our core. So when you add core in acquisitions, expenses growing at 55% of our sales growth. Then the investments that we’re making add another 46 plus, so our expenses will be a little more than 100% of our sales growth in 2018. What are we pulling forward? Well, if you remember the pie chart that we shared with you at our Investor Day and we’ve showed buckets of expense, one of the buckets of expense was a bucket called other. And in that bucket called other were people expense. So we are pulling forward some of those people expenses, because those are easy things to do. Some of the other investments that we’re making, it takes time. Well, like we’ve talked to you about supply chain as an example, our supply chain initiative is actually a five-year initiative, but the people investments are things that we can pull forward and we think that’s the right thing to do.

Got it. Thank you very much. Congrats again.

Thank you.

Our next question comes from Mike Baker with Deutsche Bank. Please go ahead.

Hi. Thanks. Two questions. One, can you explain the calendar shift in a little more detail, December versus January. How does Christmas end up in January? And then I guess related to that, even when you make that adjustment, January does seem to have been a little bit softer, but is that just the winter weather? Carol Tomé: Yes. So, Mike, it’s just our accounting convention. We have a four, four, five close and it’s just when Christmas day falls. And Christmas this year was a Sunday or Monday. Anyway, it just fell into another month. So it just calendar. That’s all it is. In terms of our January comp, yes, even on an adjusted basis it was lower than the previous two months, but we had a winter in January as I mentioned. Our western division, our southern division in the month of January comped higher than the company average for the quarter, but we can get a sense of were those comps were very good, but in the north where we had winter it was low single digit.

Right. Okay. That makes sense. One follow-up, rates doesn’t seem like it’s an issue yet, but I think in the past you’ve given some color on, where is that sort of break point where we start to become worried about rates either measured on a 10-year bond or 30-year fixed mortgage or however you look at it? Carol Tomé: Yes. So 30-year rates today are 4.2%. The consensus estimate for 2018 is 4.3%. I have seen a high estimate out there of 4.6%. But just to put it into perspective, our math suggests that for every 25 basis points of mortgage rate increase it’s $40 of additional mortgage interest per month. So we don’t see any concern with the rising interest rate over the next several years actually. Remember that historically [Indiscernible] mortgage is 5.6%, and as Craig commented the affordability index broadly speaking is still very good at over 155%.

Okay. Very good. Appreciate the color. Thank you.

Our next question comes from Michael Lasser with UBS. Please go ahead.

Good morning. Thank you for taking my questions and congratulations, Diane. As we look out over the course should we expect to see the composition of your same-store sales change at all particularly as you make more e-comm investment and your e-comm mix just comprise the bigger percentage of the total? Or as you’ve said in the past should we expect half coming ticket and half coming from traffic?

We still look at it on a split of roughly 50-50 overtime coming from ticket and traffic overall. And from departments we still have opportunity in larger ticket building materials, special-order kitchens, lumber, while lumber has certainly run-up in price, the project is still growing and we still have significant opportunities, so from a department perspective we’d see continued growth in those apartments.

And Ted, is there any thing to read into about the performance of the lighting category. The price deflation in LEDs has been happening for a long time. Could it be now that, that category has just reached either a maturity point or it's now starting to shift more online?

Now, we’d see the price deflation continuing into 2018 and we planned for meaningful deflation that continues throughout 2018. Carol Tomé: There’s some good news with price deflation, because we are re-lapping our stores with LED light. And it was a good thing that we’ve waited for this investment because the cost curve is coming down. So glass half full here.

Thank you so much.

Our next question comes from Seth Sigman with Credit Suisse. Please go ahead.

Thanks a lot and good morning, and nice quarter, and of course Diane, congrats. I just want to follow-up on the gross margin outlook for flattish in 2018. I’m wondering if you can reconcile that with the longer term guidance that calls for, I think it was a decline of 40 basis points over the next three years. And related to that presumably freight and mix could still be headwinds as you look into 2018. What do you assuming as other offsets in there? Thank you. Carol Tomé: Yes. So we’ve guided gross margin flattish for the year. That includes the 53rd week. The margin in that 53rd week will be higher because it doesn’t have as much fixed cost allocated to it. So if you ignored the 53rd week the gross margin for the business would be down call it seven-ish basis points. We have factored into our outlook a tightening transportation market, higher fuel costs, although that's gotten better recently. We’re going to have to stay lose of this. So we’ve got of cost out opportunities that we will certainly drive. But the transportation market is tightening. So we might little pressure there, but we’ll manage through it.

Okay. And then a question on the delivery from store initiative, I think it’s been in the stores for over a year now. Can you speak about the performance, the types of Pros that are utilizing it? And if you're seeing actually new customers come in or is it just driving share of existing Pros wallet? Thank you.

Sure. Seth, I’ll comment. We’re very pleased actually with the growth overall into February and we’re seeing that happened with our Pro and with our consumer and Mark is here, I’ll let him comment.

Yes. We’re seeing the same kind of mix of Pro in consumer that we see across the business. We’re very pleased that that store-based delivery continues to grow. One highlight there we’re continuing to roll out the car and van, lower-cost delivery options to more markets as we go including our home market of Atlanta now, so expect to have that rolled by spring to all the major markets. Carol Tomé: And the question always is incrementality and based on our analysis for driving incremental growth here.

Very helpful. Thank you. Good luck.

Thanks.

Our next question comes from Matt Fassler with Goldman Sachs. Please go ahead.

Thanks a lot. Good morning. Diane, thanks so much for all your years. And Isabel, welcome back to you. I want to start with quick follow-up for Carol, you gave the adjusted comps on a monthly basis for the total company. You have the Jan – do you have December and January numbers for the U.S. stores alone? Carol Tomé: Yes. 300 basis points shift. So you can just do that math.

Great. My next question, if you talk about the transactions under 50 bucks. I mean, I used to just point to the bigger ticket transactions growing at or close to double digit and the smaller ticket transactions growing low singles. Are those transactions being subsumed by -- in other visits i.e. the visits coming down and that just reflected in the bigger ticket? Is it a question of market shares or the question of that business being done online? How would you -- how should we think about that trend in the small ticket business?

Now, we’ve actually done some work in this area and I would start with the comments that this has been impacted by both innovation and inflation. And I’ll let Carol walk through the details of this, but we’re actually please with what we’re seeing. Carol Tomé: We are. So we took our ticket and broke it into quintiles. And if you look at the bottom quintile, we see the price has jumped through innovation and inflation, 11% over the past couple of years. So it’s moving out of that less than $50 bucket into a higher bucket. The other contributor is the price inflation and LED light bulb. LED light bulb would be in that – in the other bucket. So, it just the change in the business and we’re reacting to that change.

Great. Thank you so much guys.

Our next question comes from Chuck Grom with Gordon Haskett. Please go ahead.

Hi. Thanks. Just a quick modeling question, just on the expense growth factor certainly north of 100%, should we expect that to be pretty even throughout the year by quarter or are you expecting any lumpiness throughout the year? Carol Tomé: It will be lumpy. It will be higher in the first half of the year than in the back half of the year, because in the back half of the year 2017 we had hurricane-related expenses that will not repeat.

Okay. Helpful. And then just historically when you have that type of winter that you guys are going through this year and us as well. Can you just remind us how the business tends to pick back up in the spring based on your historical experience?

Well, totally, it’s dependent on when spring actually breaks and that is -- that can happen earlier, it can happen late. Mother of Nature will control that. But what we do see from that type of activity is generally you'll see when you have a harsh winter you got a lot of garden opportunity with the replacement of shrubs. You have ice damage that takes place in Brooklyn. So there is different types of elements within the business that will actually see a benefit from a hard winter.

Okay. Thank you.

Our next question comes from Elizabeth Suzuki with Bank of America Merrill Lynch. Please go ahead.

Hi. Good morning. Just generally when costs are rising, transportation, labor, general inflation et cetera, how much of these costs increases are you able to pass-through with the consumer?

Well, first of all, in each situation with cost in our first cost of goods we look at that on a case-by-case basis and work with our suppliers to help them try to minimize as many impacts as we possibly can. And then candidly we look at our portfolio approach to how we actually deal with that. And so cost may not necessarily go into a category where we may absorb some costs. It could go somewhere else. And we obviously look to offset that within our own business to try to hold value for the customer.

Hi. Great. Thank you.

Our next question comes from Dennis McGill with Zelman & Associates. Please go ahead.

Hi. Good morning. Thank you everybody. Carol, first question from the Investor Day, I think you talked about the investments hopefully adding somewhere in the neighborhood of I think about 50 to 200 basis points to same-store sales growth. How did you think about benefit in 2018 when you formed the plan? Carol Tomé: Yes. Not lot of benefits in 2018. So we’ve had to first make the investments and if you think about, we talked about $1 billion investment over the next three years. We’re going to kind of ramp up. So you’re going to see more of the return in the back half of the three-year planning than you do in the initial part of the three-year plan.

Okay. Thank you. And then second question when you talk about cash flow from the business and then look at the guidance for share repurchases, can you just maybe talk about how you thought about getting to that $4 billion number especially with repatriation being an opportunity and maybe also just update us on where that stands as far as getting that cash back? Carol Tomé: Yes. So based on the cash flow guidance that we’ve given to and use of cash, you’re like wow, you can have some left over cash. And that’s right, we are. And we are exploring what to do with that cash. And it could be additional share repurchases, dividends, payback debt, built cash for the future so on and so forth. We’re going to take our time just make through [Indiscernible] and determine what we will do with the cash. We will let you know. The $4 billion specifically is what we had on our Investor Day, so we just kept that for the year and then we’ll update you as year continues.

Our next question comes from Scot Ciccarelli with RBC Capital Markets. Please go ahead.

Good morning, everyone. Carol, I don’t know if this was answered earlier, if you did I apologize and I missed it. What is the mortgage rate that you think starts to adversely impact home pricing trends? And then relating to that obviously real estates are very localize industry, but you have thoughts regarding the potential impact on home prices in affected areas? Carol Tomé: Let’s look at the latter part into question first. 80% of American households were going to have more money this year because of tax reform, given the increases in the standard production. Further corporations are enjoying – many corporations are enjoying lower tax than we see many corporations taking that cash if you will and investing in the people [Indiscernible]. We think those offset any negative that could arrived with the change in the mortgage interest deduction or the cap on state and local tax reduction. And just a few other things; on the cap on mortgage interest reduction 750,000, only 5% of houses that are sold in a year are 750,000, so it’s a small subset of what happens to the housing worker. Further as we’ve talked about, only about 30% of tax filers itemize, and only about 22% itemize for mortgage reduction. On the state and local tax front, if you live in California or New York, you're not going to feel very good, but then there’s a housing shortage. I commented on San Francisco with 0.8 months of supply. New York City has 2.2 months of supply. So we don’t actually think those going to be any impact on housing as a result, although if you live in New York or California you may feel it. Now, on mortgage rates, you can’t just look at mortgage rate alone, because you have to look at where home prices are going, to look at affordability. But if you just kept home prices where they are today, it’s our view that mortgage rate to go to 7% before there’s any issue on the affordability. The other way of looking at is just averages, right. And the average mortgage rate over the past 30 years is 5.6%. So that might be a good number for us to all to kind of land on.

Okay. Thank you very much.

Our next question comes from Alan Rifkin with BTIG. Please go ahead.

Thank you. Congratulations Diane on your retirement and welcome back Isabel. So shortly before the tax reform was passed you laid out your three-year goals and presumably there are going to be incremental investment from the tax savings. Why is that -- and obviously those that will result in an increase returns. My question is why is there no change to the three-year 2020 guidance, if the returns by that point should be realized?

So, Alan, we’re actually not looking to do incremental investment beyond what we shared, 11.1 billion over three years is what we believe that we need to do and there's a kind of you will a durability factor to making that all happened. So there is not really the opportunity to add a whole bunch of new investment on top. As Carol mentioned we are pulling some investments forward if we can do and make it happen faster, but don't look for us to add a whole new layer of investment on top of the 11 1 billion.

Okay. Thank you, Craig. And a follow-up if I may. I believe you said that the flooring category or comping positive was below the corporate average? It seems like for the first time in many quarters that is the case, I was curious if you provide some color what is going on in a category in your opinion?

We’re very pleased with the performance. You have to remember, Alan, the average set is 7.5%, so it's very healthy across the flooring portfolio.

Okay. Thank you very much.

Our next question comes from Christopher Horvers with JPMorgan. Please go ahead.

Thanks and Good morning. So following up on the SG&A, the sales growth rate, you guided over the three years 75% to 90%. Is the pull forward mainly from 2019 into 2018 and how should we think about the cadence of that 75 to 90 as we look past this year is in 2019 thus lower as a result? Carol Tomé: We pull forward both from 2019 and 2020, so we’ll update on 2019 and 2020 when we get to those years, but nothing changes from the overall expense growth factor guidance that we gave you back in December.

Understood. And as you’re thinking about how robust the backdrop here is in home improvement? Has there’s been any changes in terms of the promotional environment as it seems like some prices being passed through here as it becoming less promotional or any change at all sequentially?

I don’t think there’s been a significant change in the promotional activity, if anything we were less promotional in Q4, but the overall market was very similar to prior year.

Thanks very much. Have a great spring.

Thank you.

Our next question comes from Eric Bosshard with Cleveland Research Company. Please go ahead.

Good morning. In terms of Pro and online just curious what you learned or any big learnings from those three areas in 2017? And then how you think about the growth rate in 2018 relative to 2017 in those areas?

So, overall, we're very pleased with our Pro business in 2017 and we continue to see growth there. And as customers continue to take on bigger projects as a result of feeling good about their home values, we see that continuing as we move into 2018. Go on, if you have other comments on that.

Eric, I’d say the other learning is that the more dimensional our relationship with our pro is the stronger our share of wallet becomes, and I think that was exemplified by the pros that are managed by our passes [Ph] which was one of our fastest-growing areas for a pro-business. So it’s that pro-engagement and that one-on-one recognition that seems to be resonating with the customer and we will carry that into next year.

And as it relates to the online, again, very pleased with what the team was able to accomplish in our online business, setting in a whole new platform that we operate on, enhancing our capabilities around search and mobile, and Kevin’s here and I’ll let him speak to how we are thinking about 2018.

Yes, certainly from a learning perspective, just reinforced what we’ve been chasing, chasing the customer and wherever they lead us, we invested significantly to eliminate a lot of friction between the different channels as we pursue our One Home Depot strategy investing in expertise and knowledge in the online property. You’ll see more of that in 2018, you know with similar growth aspirations, we got a consistent track record of over $1 billion dollars of growth in each of the last few years in our online property and we’ll look to do that again in 2018.

And then one follow-up question, as inventory progress, inventory leverage was solid in 2017. The two points within that, what contributed to that and how should we think about the path of that moving forward?

Well we were very pleased with our overall inventory position as we came through the fourth quarter and finished the fiscal year. Our primary focus when it comes to inventory is to maintain in stock. That is first and foremost so that we have the customer needs on the shelf when they come. In market or [Indiscernible]...

Right, Craig. I mean customer service begins with instock, so that’s always the top initiative, but we’d expect to continue to leverage inventory as our business continues to grow in the quarter. We’ll be making some investments as we open new distribution facilities for online, but we continue to expect to leverage our inventory. Carol Tomé: Yes, so if you just want to model in, model inventory turn around to 5.3 times.

Great. Thank you. Carol Tomé: Abby, we have time for one more question.

Okay, our last question will come from Daniel Binder with Jefferies. Please go ahead.

Great. Thank you. Just on the pros, I was wondering if you’d talk a little bit about that gap between DIY and Pro, I know it’s been consistently growing faster than DIY. Is that accelerating and then could you also talk a little bit about the interline trends?

Well Daniel, I think the one thing that we’ve seen is there’s a little cloudiness in where the actual purchases are coming from, in some cases, you are seeing people at DIY projects that are now electing their pros to go and do the purchase and the work, so but we are very pleased with the DIY growth, and seeing strength with our consumer business as well as the pros, so there’s a good balance there. And then as far as interline, we are pleased with the progress, pleased with the results. We saw a strong sales growth in all three end markets, institutional multifamily and trades, continue to see prior traction and pro purchase in the MRO initiative, so pleased with the progress. Carol Tomé: And maybe one difference that we were seeing is the rate of growth for the high spend pro is the same as the rate of growth of the low spend pro, that’s just so we are in terms of the recovery they are....

And then one follow up if I could on merchandizing, you know one of the emerging trends we’ve seen out there, obviously is the connected home, just wondering when we’ll see more from Home Depot on that, it seems like you are pretty well positioned to capitalize on it, but maybe a little bit further behind some other players in the electronic space on that area of the business?

Yes we are rolling out some more dedicated end caps in one and two and even three days sets as the amount of connected home product comes into the store. We are super excited, there is new product coming from Ring, there’s new product coming from Nest, there’s new product on light and fan controls by Lutron, so really across the board, all our major suppliers are coming up with great innovative product and we are growing the space in the store to merchandise it appropriately.

I think the other thing that you’ll see is just in general, in every bay in the store where there’s an opportunity to have product that is enabled through technology, you’ll see that happen over the next five years. It will continue to evolve and it won’t be somewhat a section over the next five years, it will be in every day in the store. That will happen, because the manufacturers are finding ways to enhance their product for the customer.

Great thanks.

Well thank you everyone for joining us today, and we look forward to talking to you on our first quarter call in May.

Ladies and gentlemen, this does conclude today’s call and we thank you for your participation. You may now disconnect.