Michael Baker – Deutsche Bank Research asked: Lowe’s increased its leverage and now you’re a little bit below your target leverage right now. You have said you’re going to buy back stock in the fourth quarter. Did you not have a repurchase in the third quarter? Did it have to do with some of the announcements made during the quarter and did that close your window?
Robert F. Hull, Jr. – EVP and CFO responded: Regarding either share repurchases or no share repurchases in the third quarter, it was because our lease-adjusted debt EBITDAR target until that time was 1.8. We were concerned about bumping up against that target at that time.
We have revised our outlook to 2.25 times.
We’ll now be able to be active in the share repurchase market; that was really the largest driver for not being in the market for the third quarter.
Michael Lasser – UBS asked: It seems like the organization is going through a lot of change organizationally, tactically and strategically. Do you think there has been distractions from some of the dynamics? Will there be a wait on the on the results over the last couple of quarters from this? Are these changes going to turn to positives?
Robert A. Niblock – Chairman, President and CEO responded: Absolutely.
I think when you look at the significant amount of change that we’ve put the organization through, anytime you have that level of change, there has to be some amount of disruption associated with it. That was part of the reason that we tried to consolidate all these changes, put them together and execute them as quickly as we could whether it was the change in the field organization.
The changes that were done here for example in merchandising and getting hit with the necessary store closings behind us, there’s a new approach to moving back to EDLP.
We want to try all those things. We could have laid out a clear path moving forward for the organization to get everyone refocused on where we will move in the future. A lot of those changes as we’ve said in our comments, are being driven by one with customers going where the market is going as Bob Gfeller talked about, price transparency is becoming greater and greater every day.
We think about other channels, the Internet and those that we compete against as well. We’re priced competitively everyday across those channels so that in the long-term, we’re going to be able to provide the value proposition that consumers are looking for no matter what channel they choose to shop on.
We’re trying to continue to expand the Internet for example and bring other ways in to meet the consumers’ needs whether that’s transacting projects in home, if they want to do a major project and having a representative in their home, whether it’s buying online, whether it’s buying in-store, whether it’s dealing with someone at our contact center to be able to ask a question, to be able to transact for that day.
We’re trying to approach this on a multi-channel cross functional basis and it has a great cadence to it. But in the modified changes, certainly, we understand that there were some disruptions in the process.
We think that most of that is behind us.
Rival Home Depot (NYSE:HD) announces earnings tomorrow. Don’t Miss: The Home Depot Inc. Third Quarter Earnings Sneak Peek.