The Home Depot, Inc. (HD) Earnings Call Transcript & Summary

Hi, everybody. Thank you for joining us. Today, we're happy to host Home Depot. I think, Craig, this is the third in a row for us. And we always love having you guys. I keep waiting one day for the housing start to be done, but it just is still exciting and it still keeps working, so my [indiscernible] not well. But that's okay because I like everything you guys are doing, and it's a really fun story. One of the things we will go through, of course, because this is the strategy conference, I'll do more high-level questions. The audience, of course, we'll open up to a couple of things. And guys, remember, the Pigeonhole thing that we've been pushing on the right and left side, I forget which side of your screen, I'll be able to see those, and Caroline will be able to see those. And so we'll be sure to get those prioritized based on votes, so we can get to those questions. And then at the end, remember, there's a little Procensus poll, which lets us do kind of feedback live for real time because that's the trend, and we appreciate it.

So without further ado, let's get into the heart of it. Again, thanks for hanging out with us, and I'll start with the real open one. Would you mind telling us how you and the rest of your senior leadership team have managed during this just remarkably fluid environment?

Sure. Obviously, we changed our operating rhythm. And the first thing we did kind of mid-March, we put in a twice-a-day call with the field leadership. And so we were getting real-time feedback from the leadership in the field as to what they needed, what they were seeing, what adjustments needed to happen. That then went down to once-a-day over the last few weeks. But then mid-March, we put into place with myself and my direct reports a daily end-of-day recap as well, where we all got together. And that gave us the ability to have all functions represented and to be able to make decisions cross-functionally that needed to happen and be sure that everybody was in the loop so that we can move with speed. And clearly, in this environment, speed was critical, and you're basically making decisions without all of the information that you would like. So the great thing about that is, as you -- in situations like that, you look to your North Star, and our North Star was our culture. And that really helped us get through this.

Yes. I'm glad you mentioned that. We've heard that from a couple of retailers that have strong cultures like a Walmart, like a Best Buy, that, that's what you do because one of the things I like about culture is that the idea that it gives someone the ability to respond to a variable situation in a way that's not perfectly consistent across leaders, but is increasingly consistent as opposed to total chaos. But I love the daily call stuff. I think that's the right way to do it. A little bit more broadly on how those omnichannel things changed. Now most folks made some operational adjustments to the staff or the layout. They used the garden center for something different, so on and so forth. What are some of the novel changes that Home Depot made? And do you think some of those are going to stick? Some of those are like, wow, that's a way better way to do it?

Yes. So I'd say first thing, big priorities for us were we had 2 objectives: number one, safety and well-being of our associates and our customers; and then number two, to actually remain open as an essential retailer for things that break and needed to be fixed. And we were, at that point, heading into storm season for a significant portion of the country. So those were the 2 priorities that you know, right? You're very familiar with the tornado situation. So those were the 2 priorities that we had. Then we stepped back and said, "Okay, we need to make some adjustments to the business with what's happening." And the season had started strong, by the way. First 7 weeks of the year, spring was breaking. It was a very good environment, but we made operational hours adjustments. So we cut back 25% of the facing hours of -- that we were open for the customers. That gave us a chance to do much more deep cleaning, restock shelves, do those type of things. Went in and put social distancing in place, marking stores, we put social distancing captains in stores to help with that environment. Then we went in and we said, well, we really need to think about this is our key season this spring. It's when we drive most of the traffic to the stores. We said that will conflict with our approach in terms of our objectives. So we cut all of our spring promotional activity that annually happens during that time frame. Then we went in and said we needed to restrict the number of customers in stores to help maintain the social distancing protocols, and we did that. And then we cut out nonessential in-home install services, both for the protection of our associates and also to -- customers didn't want people in their homes either. So you look at all that and you say, "We made a lot of change in a short period of time." Then as things continue to deepen with the crisis, we recognized that we needed to figure out how we serve customers, more customers without them actually physically having to be in the stores because of limitation. So we implemented a curbside pickup. We did that basically in 48 hours. The great news is [Audio Gap] For that to happen in a very short period of time. But if you step back and look at it going forward, there's a lot of learning that take place. So as we saw [Audio Gap] Next 3 weeks were double-digit negative as all the constrictions came into place. Then as customers kind of got bored of being at home and things started to ease up, we saw a strong take-off of the business again. I think there's a lot of learning about the events, our approach to marketing that we'll look at going forward. We're looking at what happened in the different hours when we constricted hours by 25%. We've now added back 2 more hours of operation [ since ] during the day. But we'll look at that. We'll look at how we staff that, what actually sold during that time frame, who we were serving. So I think there's learning there. And then, of course, with the interconnected business, we had significant growth in our online business. 60-plus percent of the orders were picked up at a store. That is an opportunity for us going forward to look at how we approach that. We were already making investments in automated lockers, things like that, but we'll continue to analyze that. Who was utilizing that? For what purposes? How do we think about that? How does that fit into our expanded delivery strategy? And we'll use that to inform tweaks to our approach going forward, for sure.

Great. Yes. And we've heard that a lot, some of the omnichannel elements, which were done that fast because the teams are good. And again, bad -- less good retailer, less able to do it. Good retailer able to do it. You get this incredible uptake from a customer experience. The other thing about customers we're curious about is often in crises, there's a nesting behavior. Certainly eat at home, baking is off the charts. And the way even people think about what they fix in their home, we think, we hypothesize from survey work has changed a little bit. How are you guys thinking about kind of your product ranges that maybe describe a customer who might be in a more serious mode as opposed to like a frivolous, showy way to reframe your home more of a nesting or a caretaking way to think about your home?

It's interesting. One of the takeaways from this is there has definitely been a resurgence of do-it-yourself in this environment. There's no question about that. We see customers taking on projects. I guess when you're stuck in your home for 11 or 12 weeks, you see all the things that need to be fixed. And luckily, we've built a very flexible environment from a supply chain, and we're able to adjust and do what we needed to do to take care of those businesses as they started to gain traction. So we think there's a continued go-forward resurgence of DIY projects. We are seeing the Pro business come back as well, and I think that will only continue to strengthen as we go forward. On the services side of the business where we constrain nonessential services, as restrictions have been lifted, we're seeing that business start to come back as well. Most of the customers postpone their projects, very little cancellation at all. So we think that will continue to go forward. I think from an assortment standpoint, the things that will probably be more ongoing, I don't think there's any question, but what -- both for DIY customer as well as for businesses, cleaning is a change going forward. I think cleaning protocols will change going forward. That will continue to be something that accelerates, we believe. It's -- candidly, being all honesty, it's the area that we have the most challenge from an in-stock standpoint right now as our suppliers try to recover from the spike in volume that has happened, but we'll continue to focus there. When you think about other opportunities, so think about businesses, property management, we're getting a lot of requests right now from our customers saying, "Help us figure out how we get to a touchless environment from a business standpoint." So more product that enables touchless interaction, I think, is you're going to see that continue to go forward in this environment.

One -- as you bring some of the products for cleanliness changing, one of the things I think we forget about is that the original basis of the N95 masks that had emergency use were because people doing very dangerous jobs, nonbiological dangerous, needed those N95 masks. And of course, you guys have had to prioritize this, right? They're not and you directly pull them off the site. But at some point, that capacity comes back on, that supply chain's been crazy. I mean just like war dogs sourcing military stuff crazy. And so I'm curious, are you seeing some order come back to that? Is there a day in which I can -- because I had N95 masks from you because I'd refinished my boat, right? So I happen to have some. But is there a day where those are going to come back?

Oh, yes, they will. We have a prioritization, both on N95s and other masks. We've always sold other masks. Think somebody working with wood, carpentry work, whatever you got dust, we always have sold masks. The prioritization, obviously, N95s have been prioritized, and we basically donated everything we received for a long time to medical first responders and so on. But you'll see that come back into the market for sale eventually. And as it relates to more normal-type masks that are not medically rated, our priority right now is to support our Pro customers and our service providers that have to do in-home work. They need that product to be able to fulfill the requirements to open up and do that. So we're doing that as well as our associates ourselves, making sure that they have them. We've supplied masks to all of our associates in our stores. And then from there, as we've sustained the flow, you'll begin to see those available, the non-N95s available in store for sale, and then ultimately, we'll bring back N95s as well.

Yes. And I think is this -- you're talking about how customers are asking for help. Do you think this is a services opportunity as well as a product opportunity? Is that the way you're thinking about it?

I actually think it's more of a product opportunity than it is services. A lot of where we're asked and getting customers asking for help is in businesses where they have people who know how to do that, but they need the product. And they want to understand what product is best.

That makes a lot of sense. There's a thing that I'm partial to, which is a hydrogen peroxide vapor generator, which has evidence it killed SARS 1.0, 2.0, we'll have to see. You guys canceled my order of 3 of those. So thanks. But I needed to go to some place more important -- no, it needed to go to some place more important. But that's exactly what I'm thinking about is there's a day in which maybe tons of restaurants, any of those high-interaction places, they probably need help with that. And they're not big enough [ for John to ] control or somebody else to mess with it, and you guys have to fill that gap.

Yes, and one of the things that is being added to the assortment right now is the hydrostatic sprayers, which allows you to go in to sanitize very quickly. And because it's hydrostatic, you can hit an area, and it will capture all parts of that surface, whether it's underneath, above, doesn't matter. It will attract to it. So yes, there's product opportunities like that going forward as well.

That's cool. That's powerful. I mean, again, I've always been nervous a little bit about whether connected home was important enough to drive volume. But safe home, yes, that's -- safe, that's important enough to drive volume. So there's a unifying question we normally ask later, but because it touches so many things on the pandemic, we're going to ask it now. As you think through and beyond the pandemic, how do you expect your priorities to shift, if at all? Especially as they relate to cutting costs because there are some pressures that people have seen just in terms of cost management to keep a clean facility and increasing the level of investment. So how are you balancing those guys in terms of priorities?

Sure. So let me maybe start on the investment side, and then I'll come back to the cost side. So we're in -- obviously, we're in our third year of investment. This was to be our largest year of investment. Our general approach is to continue on with that investment. We have made some modifications to things right now. We paused some things that touch the stores in a big way because we didn't want more people in the store. The stores are dealing with enough in terms of crowd management and all the order pickup and so on that was happening. So we paused things like the front-end investment, accelerated merchandising resets. And when the appropriate time, we get things settled out, we'll get back to those and complete them. But we believe that the areas that we've been investing in that this crisis has reinforced that we had selected the right areas to continue to expand. Interconnected retail, we think, is critical. We believe that for a long time that people that will win in retail are those that blend the physical and digital worlds together well. This crisis has reinforced the importance of that as we saw massive engagement in the digital world, within 60% of the orders being picked up at a store. And so that just reinforced that the approach that we had overall is correct. There are some costs, as you've called out, extra cleaning and so on, that certainly will be built into the business for the foreseeable future. But we're getting more efficient at that, and we're looking for other opportunities like these electrostatic sprayers, which might take that cost even further, and you'll be able to do it much faster overall in the business. But beyond that, Home Depot has always been focused on driving productivity. And you set aside our onetime cost that we did to protect and help our [Audio Gap] in the first quarter. And that's something we will remain focused on. There continues to be opportunity. The investments we've made in automating the upstream supply chain have paid out in terms of productivity gains. We'll continue to make those investments. As we build out the downstream network, our whole objective there is to really create a low-cost model for delivering home improvement product, which has a tendency to be bigger, bulkier-type product. So we are very focused on that cost productivity. It's kind of a hallmark of The Home Depot, and we're not losing focus just because of this.

Just as a specific problem on that because it comes in a lot, there's an argument that with the hero bonuses for essential workers, and I have a bias being a retailer for so long that I always thought in a way as a society, we didn't figure out how to pay retail workers well enough. There's going to continue, I think, to be a pressure for living wage. Do you guys share that view that probably that wage progression just continues for a while? Or do you think there's kind of a plateau or kind of your sense of where we are in wage inflation?

Well, I mean, even before this happened, right, there -- think about it, we were at, what, 3%, less than 3% unemployment or around 3% unemployment. So wage pressure naturally was in the market as a result of that situation. And the approach Home Depot has always taken is, look, we are going to -- we pay a competitive wage overall. That's first and foremost. But we look at the entire entity of what we offer to somebody coming to work at Home Depot: wage, benefits, success-sharing programs, the opportunity of investment and growing them, helping them develop a career in retail. All of those things go into play. And yes, I think wage pressure continues. At what rate? I don't know. But there was pressure before all this started, and it isn't going to abate. I think as long as we see businesses come back and the economy come back, I think that wage pressure remains.

Makes sense. I'm going to sprinkle in a couple of the Procensus questions just because they happen to be on topics for us anyway. One of these is why has there not been a consolidation of independents, do you think, maybe like a roll-up of large lumber yards, which are pretty strong competitors in various regions? Why do you think some VC hasn't stuck those together like in PTC and just cranked them out?

It's a great question. It really is. I think first of all, I'd say a couple of things. Number one, 85% of our economy is driven by small business, right? I mean, so the U.S. is an entrepreneurial-type environment, and it always has been. And I think it will continue to be so. I think the issue in the example that you called out, it's not hugely capital-intensive to open up a lumber yard, if you will. So I think what happens is you see downturns, and in downturns, maybe the weaker operators go away. But then as business comes back, new entrants come back in and join the market because it's not all that capital-intensive. I guess I'd have to believe that most of the VCs are looking for things that might have more inbound barriers, if you will. And that's probably a space that isn't considered to be a high-barrier space just by rolling up the players in the markets. And you got to have people willing to sell.

Yes. It makes sense, for sure. Yes. It may just -- may work out okay, right? The other one that comes that's sort of related to that idea of -- and again, all these changes, it's sort of like the business has been so stable. It's such a good place to invest. Everybody always goes, how does it not work? Pricing has been relatively maintained well. Obviously, promotions were stopped for the right reason. We don't want to push people into the stores within the extra normal activity. When do you think that process might come back? And again, the margin mix is crazy now. Let's not pretend to know all of that. But when would the -- do you think that the promotional cadence comes back, and you just -- it just comes back into the margin game and you just got to go through it?

Yes. I think we'll look at it, and we're watching very carefully what's happening throughout the country. And we're beginning to open the business back up. It's not a one size fits all. We did extend hours from 6:00 p.m. to 8:00 p.m. as we moved forward from here and we see the restrictions ease, we -- by the way, we had to deal with over 600 different ordinances around the country. Just saying. So this is like crazy environment. But as we see that change and different municipalities and states start to open up, we'll take a market-by-market, store-by-store approach and begin to open up and ease and work our way back into more normal operations. We would hope that as we move towards the back half of the year that we would see a much more kind of normal cadence. I mean we're -- one of the things that we've learned over the years, for example, when you have big like hurricane events that impact the market dramatically like we saw a couple of years ago, the natural reaction is, oh, you need to eliminate all things like holiday decor and so on. The reality is the customer actually wants some normalcy. And so they actually lean into those type of categories. So we're planning to have a more normalized assortment, if you will, in the fall like we would around things like holiday decor.

Good. I look forward to that myself. The other one is in private label, which has been a great business, you guys have done well on the Pro side. When do you think about this expand opportunity from whether it's PPE, whether it's contactless, whether it's whatever, is that probably going to be a private label space? Do you feel that's an element where you might actually just kind of step in and do some innovation there, kind of a la Target where you just kind of create a category if necessary? Or do you think there's still other partners that they'll go first, and then you'll kind of figure out the right way to do that?

Yes, look, we've got a great private label business overall. We have a number of brands in private label that actually, as you called out, Pros are very familiar with, but also consumers. And [Audio Gap] had an approach that we would offer a private label as an opportunity to continue to bring innovation to the market and real value to the market. We haven't ever set out targets to say it needs to be X percent penetration or we want Y volume. We've really looked for opportunities and our opportunities have been around, and we've been very candid with our supplier base around this. Where brand's not relevant, private label can certainly play. Where we have a cost structure problem, we would certainly look to private label to solve that. Where there's a lack of innovation, we would bring private label in the market to solve innovation. And that's really been our approach that's worked really well for us. If we think about like you mentioned PPE, I don't know that we do that, private label in the beginning. Could that be down the road? Maybe. When we think about categories like HD Home, where we've expanded in the digital world into the categories that finish out of room, there are brands that are really important in that business, and we will play in those brands. But we also believe there's a real gap there in terms of value for the customer, and we'll bring a significant private label penetration to that to bring real value because when we did the research with customers, one of the things that they said to us was, "Yes, we would buy this from you. We expect you to deliver great value." And so we'll do that in a significant way in those categories.

That makes sense. So here's kind of the, I guess, the one that's the biggest variable. And I love the discipline you guys had to stay on strategy the whole time, but we do have to think about where in the world we are in the total economy. And so we'd just love to hear you talk about home demand now and in the future. The data is all over the place. Things look a little cleaner, frankly, from the pricing data now, but there's things that's weird. But we hope your guess is better than ours. So let's just -- let's hear it.

All right. As we move into 2020, we saw a very solid market that was very supportive of the business. And the business got off to a great start in the first 7 weeks. As we look at it today, there's nothing fundamentally that has changed that if we can move back towards a more normalized environment [Audio Gap] the environment stays positive. We think that the housing market continues to stay positive. The one thing you can probably count on for sure is I doubt that you'll see any high interest rates anytime soon. So that's got to be a positive for the housing market. We've never been able to correlate that to our business from a sales standpoint. But from a housing, that's got to be a positive overall. So we think that as things kind of begin to open back up and we see it get back to a more normalized environment, we don't see anything that would suggest that it isn't the same as when the year started. And so we look forward to that. And I think the one thing that will -- we'll have to see how this plays out. You referenced this earlier [Audio Gap] we're going through, people do have to nest sometimes, and we've got a lot of people that have been in their homes now for quite a while. And I think they see all the things that they would like to fix. So we're hoping that we see this continued demand and resurgence of DIY continue to go on through the balance of this year. That's our anticipation. We're watching the customer behaviors very, very closely, daily and weekly, we're watching that happen.

For sure. One of the other components in that is people say, "Okay, we like where the housing picture is. We like the execution. We love the omnichannel opportunity." Then there's the other notion of just the economics of finance. So a question from the audience. Are buybacks an endangered species? Is it just a temporary moratorium? How do you guys think about long run shareholder distributions?

Sure. So our total [Audio Gap] both allocation and shareholder return, our thought process hasn't changed. It's always been, first, you have to invest in the business to make sure that you continue to be relevant and can take share in the marketplace. Second, we are committed to the dividend. We want to continue to grow the dividend as we grow earnings, and that's been our focus. It remains our focus. Third is, then, if there are opportunities that can create shareholder value from an acquisition standpoint, whether that be capabilities or cheaper to buy than to build, we'll always look at those type of opportunities. And then the final thing is, if we still have cash left at that point in time, as long as it's value creating, we will continue to do share buybacks. And that is our thought process even today. What we did currently was in the scenario, as you started heading towards week 8 through 10 and the business was going double-digit negative, we weren't sure if we were going to remain open, we didn't know what the situation was going to hold, it was very prudent for us to shore up the liquidity position of the company, and we did that. And the first action we took was to stop the share buybacks as a result. We'll evaluate this as we go forward. Our intent would be to get back to our normal process. We just want to see where this plays out and make sure we get a little more understanding of where the market is headed before we do anything.

Yes. And I think part of the popular anger with buybacks is a tech company, I won't mention by name, who paid no taxes and then borrowed money to buy back stock, feels a little weird. You guys pay taxes. A lot of -- less now with -- less now, but you pay a lot of taxes. So it makes no...

Yes, we do.

I think. Another one is tariffs. So we thought it was all done. We thought tariffs over, great, thank goodness. And now it seems like Cold War 2.0. Is that -- I know you guys had made a lot of moves already that were savvy. Is the boat leaving China faster now where maybe less volume ever goes back to China?

So see, I'd say we don't think tariffs are done by any means. So that's an ongoing process. There are clearly moves in supply chains to take portions of what was in China and move it to other parts of the world, whether that's other parts of Southeast Asia, whether it's back to North America. That clearly is happening. And honestly, that was happening. Will the tariff situation might accelerate now? Who knows. But China will still play a role. There's no question about it. They'll play a role, but we are definitely seeing supply chains move. No doubt, it will happen.

Yes. It's -- seeing some of these PPE things come back to the U.S. has been remarkable because that was part of it, right? The total supply of some of these masks that were being made in the U.S. was so tiny. And that was the place that you could restrict supply and control it. Now it's otherwise, free for all, right? So crazy.

Yes. I think those type of products, you'll see change pretty dramatically, for sure.

The other one that I think has come up with those types of changes is if you get to where you have a disruption -- or not disruption, but a change in supply chain, one of the other ones that people have tension with is if you operate inside of a country and you also use them as a supplier, that's a little bit difficult. But you guys -- North American retailer, you don't have to play as much there. But is that ever a consideration set in terms of -- and I know you guys -- international is somewhere way down the road, but is that ever a consideration set to be like, okay, these are places where we might get a hold of an unnamed European retailer one day. How does that ever play out when you guys are doing your 5-year, 10-year visioning?

We're very focused on North America. There is so much opportunity here. We play in a $650 billion market in North America. And we don't own enough share right now to worry about other places in the world.

I'm going to send you that TED Talk from the Nordic guys who have that -- well, here's where the billions are coming and 11 billion people trading in Africa and Asia. One of these days, one of these days, you're going to get there.

Maybe one of these days, but not in the near term.

Is there anything cheap enough that is an interest? I'll put it this way. There was a notion that Warren Buffett usually comes in and rescues things, right? The economy, it's crazy, he comes and he buys a whole bunch up. He didn't buy anything. He didn't buy anything. In fact, sold a bunch of things. Do you guys have -- for someone who's been so bullish on America forever, are you guys still equally bullish on America, and it's just kind of a yes, it's cool. Everybody makes a bad trade once in a while?

No, we're still bullish on our business. We feel good about our business. I don't -- our approach on M&A is, again, capabilities that are cheaper to buy than to build. Honestly, right now, I don't know how a Board would value any company to do a deal. I mean I really don't know how they do it.

I know. This is another audience one. And I know part of the answer because Home Depot's such a team culture, you'll probably dodge a fair bit of this, but I'll ask anyway. How do you want to be remembered as CEO of Home Depot? What is your ideal legacy? And I'm not saying just that your team is awesome, right? Is there something you'd go? I would love to look back X number of years and not that people are retiring you today, but I'd love to look back and see this is how it's gone or this is what's happening.

I would hope, for me, as legacy, the first thing that people would say was that Craig was a great steward of the culture of Home Depot. That would be #1. The thing that I hope it would say is he's pretty passionate about bringing innovative product to market.

Yes. See, once a buyer, always a -- once a merchant, always a merchant. Always does. Never goes away. Never goes away. I remember Doug McMillon, who I know well from the old days of Walmart, he'd be in the middle of a strategy review, and he'd just get excited about a product, they'd be like, "Doug, we're trying to do strategy." He's like, "No, no, no, but you haven't seen this product. It's incredible."

It's great. It's why Doug's so successful.

Exactly right. Another one that come up on the professional side is this. I think we talked about this last year, but I think it maybe is even crisper now. We think that your long run professional net margins can be as good as your DIY margins, okay? We're on board with that. But there is a notion that some of those assets require some cycles of utilization, right? You get logistics assets, you make some changes [ in analysis or ] wherever you're doing things, and it starts to get going. Pro support centers get high utilization. And the notion was you had enough push from Pros that you were going to get your utilization fast enough that we weren't really going to have a dip in net kind of earnings growth. Still there, even with this kind of Pro dip, still feel comfortable that you're going to get high enough utilization of these Pro assets?

Yes. We're excited about the capabilities that we're building out, and we believe that the investments that we're making will position us well for the long term. They have a few objectives in mind. Tremendous flexibility, which is probably more important today than ever, right? We've seen that over the last quarter. So great flexibility to be able to drive the business at scale. And that's important, right, to be able to scale these capabilities and to do it in a way that you're the low-cost provider. Yes, we think all of that plays well for us in the long term. And if we do those things well, it gives us the situation where we should be able to take outsized share growth in any environment. Whether it's a good environment or a bad environment, we should be able to take share. So yes, we're pretty excited about where we're at.

And just because every country is having a different experience, right? If you're in New Zealand, this would be nothing because they have no cases. How are operations in Mexico and Canada? It -- lockdown may have been a little harder in Canada, maybe a little lighter in Mexico. Is there anything material that you guys think about at least or could be important in the future, I should say?

No. Look, our leaders from both Canada and Mexico have been on our daily calls that I've had with my team. They report to me. So they have been totally in tune with all the decision-making and help to inform some of the decision-making based on what they were dealing with in their countries. We saw a pretty hard lockdown, as you know, in the province of Ontario. We literally had to implement curbside pickup overnight because it was the only way you could do business in Ontario and remain open. The team did a phenomenal job of reacting to that and making that happen. We've now seen the business has been allowed to reopen again by the government in Ontario. So they see much of the same that we saw and even more strict in the province of Ontario. Mexico, again, obviously, they're dealing with the COVID crisis as well, probably a little bit behind [Audio Gap] that it didn't start quite as early as the U.S. So they're just now reaching the point in Mexico, where they're beginning to work through how it opens back up. So they're probably a couple of weeks behind where the U.S. and Canada is from beginning to implement the recovery stage. But overall, the teams are doing well and have done a terrific job of managing through it.

Cool. So we'll do last couple because we want everybody to have room to get to their next meetings. Casually, I thought, oh, it's easy. You don't have to walk there. But actually, the tech stuff is almost about as long as walking down the hallway.

True.

[ Just best experience so far. ] So some quick ones. How has the flatbed delivery station rollout in Dallas been going? Will we see these formats be increasingly rolled out?

Yes. Early stages. It's going well. We're right now still assorting the building with products that go beyond the assortment that we carry in store, and that's an important element. But we're very pleased with the early results. Through all of this, for the most part, we've been able to maintain the continued development of the supply chain. We had a couple of areas where we had local restrictions that probably delayed some of the construction and buildings by maybe 2, 3 weeks. You couldn't get inspectors on-site to sign off on things. But for the most part, we're on track and continue to roll. You'll see us move forward through 2020 pretty much as planned.

No, that's good. The other one is -- and this makes a lot of sense. There are some elements, I would say, of all the bullishness we see, sometimes the credit stuff looks a little less bullish from time to time. Has credit changed for either big do-it-yourself projects or Pros? With your lending partners, is it tighter standards? Is it harder to get those lines lifted for projects? What are you guys seeing on the credit side?

We really haven't seen anything like that at all. A matter of fact, working with our partners, we were actually able to extend some time benefit to folks if they needed it and not an issue.

It's interesting. So we had -- we've heard from some other retailers that their vendors weren't able to get financing and some retail partners, which usually you play the cash game, right? You get -- you sell your product before you pay for it. People had to wire money, like mega corporations have said, I'm sorry, little supplier, you can't have a wire. And they're like, well, you don't get any product, and they've actually been wiring money. Have you guys seen that kind of thing where there are special cases where you've had to maybe just participate in financing suppliers or has not been appropriate?

Not at all. We haven't really had any requests at all.

Okay. All right. Good. Next one is commercial real estate may finally have its first bad year arguably since 2009. Is your exposure to really commercial real estate still limited? I assume that's true because you're not really like -- we're not participating with giant mall groups or whatever, but I just want to make sure that was still not a big thing for you guys.

Yes. No, that's right. We really don't have much exposure there.

Okay. And then over the last 20-plus years or so, there's been a ton that we've seen in terms of that Home Depot evolution. It's remarkable. It's always hard to forecast yourself into the future, but try, if you wouldn't mind, because so many investors had such a great run playing, watching and growing with Home Depot through that entire process, and they'd love to hang in there. But tell us a story that's just a little more future-y, a little more put your mind out there in time travel.

So I guess I'd start with as it's defined today, we play in about a $650 billion market, right? And so we don't own that much share, and that's North America. So we're pretty excited about that opportunity. And the cool part that's happened during this crisis is we have -- we track customers, and we look at householding, there are a number of new customers that we have attracted into Home Depot and exposed to homedepot.com during this crisis that we've never seen before. And so there's a new group of customers that we now have an opportunity to continue to cultivate, grow and keep engaged with The Home Depot. And all of the investments that we've been making are to be able to create this great interconnected experience between the physical and digital world and do that at real scale. So we think that's an enormous opportunity. The other great part, if you will, is all of that increased traffic that we saw has exposed a lot of folks to capabilities, categories in Home Depot that maybe they didn't know about before. Most of that traffic, by the way, was natural traffic. It was direct. It was our owned channels. It was not paid for traffic, which is great. And then as I mentioned, I think there are some categories of opportunity going forward that will just change as a result of this crisis that we think spells out opportunity. So we're pretty excited about the continued growth that we have, the resurgence of DIY that we've seen, the opportunities that we have with, I think, with cleaning standards changed forever, thinking about helping businesses go to touchless environments, so new opportunities to sell product there, the categories like HD Home, which have gained tremendous exposure during this situation. We're pretty excited about being able to grab a larger percentage of that $650 billion-plus market.

All right. Well, if anybody who didn't catch you guys on the fall, it's going to be a miss they'll regret. If your future has got that much brightness, $160 was a steal and a half. Thanks again for the time. Thanks for all the work you guys are doing to keep everybody safe in their shelters and keeping your associates safe and participating. Thank you, again, everyone. Remember, Procensus poll on the side for feedback. And Craig, love to see you next year. Cheers. Bye.

All right. Thank you all very much, and stay safe.