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    Zachary Fadem • Wells Fargo Securities, LLC

    Zachary Fadem's questions to Home Depot Inc (HD) leadership

    Zachary Fadem's questions to Home Depot Inc (HD) leadership • Q2 2025

    Question

    Zachary Fadem inquired about the drivers behind the July sales improvement, asking if it was due to a weather-related catch-up or an underlying trend change. He also asked for details on the second-half comparable sales outlook and the potential impact of interest rate cuts and tax reform on the business.

    Answer

    Chair, CEO & President Ted Decker and EVP & CFO Richard Mcphail responded. They attributed the Q2 strength to broader customer engagement in smaller projects and favorable July weather. They confirmed the full-year guidance is achievable with only a slight back-half comp improvement, aided by a favorable shift in foreign exchange rates. Decker noted that while lower interest rates would help, the primary factor delaying large projects is general economic uncertainty, and the recent tax package should be a net positive for consumer spending.

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    Zachary Fadem's questions to Home Depot Inc (HD) leadership • Q1 2025

    Question

    Zachary Fadem asked if Home Depot's strategy to hold pricing steady amidst potential tariffs would widen its price advantage over competitors. He also inquired about the accounting implications of the retail inventory method and how tariff-driven costs would flow through the P&L.

    Answer

    EVP of Merchandising William Bastek declined to speculate on competitors but reiterated confidence in Home Depot's position due to its diversified supply chain and robust elasticity models. EVP and CFO Richard McPhail confirmed the company uses the retail inventory method and that while there can be some variability, nothing significant is expected quarter-to-quarter, as retail price changes are reflected in the ordinary course of business.

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    Zachary Fadem's questions to Home Depot Inc (HD) leadership • Q1 2025

    Question

    Zachary Fadem inquired if Home Depot's price spreads versus competitors might widen if it holds prices amid tariffs and asked about the accounting implications of the retail inventory method under these conditions.

    Answer

    EVP of Merchandising William Bastek declined to speculate on competitors but expressed confidence in Home Depot's own pricing position due to its sourcing diversification and elasticity models. CFO Richard McPhail confirmed the use of the retail inventory method and stated that while some variability can occur, no significant changes are expected as retail prices move in the ordinary course of business.

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    Zachary Fadem's questions to Home Depot Inc (HD) leadership • Q3 2024

    Question

    Zachary Fadem inquired about the Q3 hurricane impact, including category details and the Pro versus DIY sales mix. He also asked for a breakdown of the Q4 comp guide between hurricane effects and the underlying business, and for an update on trends in needs-based versus discretionary spending.

    Answer

    Executive Vice President of Merchandising, Billy Bastek, confirmed hurricane sales were typical prep-and-cleanup items and largely consumer-driven. Richard McPhail, EVP and CFO, noted the full-year guidance reflects Q3's outperformance from both hurricanes and favorable weather. CEO Ted Decker added that the trend of deferring large, discretionary projects while completing needs-based ones has remained consistent throughout the year.

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    Zachary Fadem's questions to Texas Roadhouse Inc (TXRH) leadership

    Zachary Fadem's questions to Texas Roadhouse Inc (TXRH) leadership • Q2 2025

    Question

    Zachary Fadem of Wells Fargo asked about the negative impact on the food cost line from the entree mix shifting towards beef. He inquired if this was a cyclical or structural trend and what the expected basis point impact would be in the second half of the year.

    Answer

    Michael Bailen, Senior Director & Head of IR, confirmed the headwind was about 25 basis points in Q2, down from 30 bps in Q1. He expects it to hold around 20-25 bps in Q3 before stepping down in Q4 as they lap the shift. He views it as a positive sign that guests appreciate the value of steaks on their menu, which is good for long-term success despite the near-term COGS pressure.

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    Zachary Fadem's questions to Floor & Decor Holdings Inc (FND) leadership

    Zachary Fadem's questions to Floor & Decor Holdings Inc (FND) leadership • Q2 2025

    Question

    Zachary Fadem of Wells Fargo & Company asked for an update on the sales mix across 'good, better, and best' tiers and inquired about the performance of opening price point products, especially given competitor focus in that area. He also asked about pricing flexibility across these tiers.

    Answer

    CEO Tom Taylor confirmed that 'better and best' products continue to outperform the 'good' tier, a consistent trend for the last three years. He stated that while competitors are leaning into opening price points, Floor & Decor remains competitive due to superior features and benefits. President Bradley Paulsen added that while price gaps are naturally wider on 'better and best' items, the company's surgical pricing approach allows for adjustments across all tiers based on market dynamics.

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    Zachary Fadem's questions to Floor & Decor Holdings Inc (FND) leadership • Q4 2024

    Question

    Zachary Fadem of Wells Fargo inquired about the 2025 pricing strategy in light of new tariffs and supply chain costs, and how price gaps with competitors have trended. He also asked about new store productivity expectations and the quarterly cadence of the new distribution center costs.

    Answer

    CEO Tom Taylor outlined a three-pronged tariff strategy: vendor negotiations, sourcing diversification away from China (now 16% of sales), and price increases as a final step, all while maintaining competitive price gaps. CFO Bryan Langley stated that new store productivity is expected to be similar to recent years, which is below historical targets. He clarified the DC cost impact will begin at approximately 30 basis points in Q1 and increase throughout the year.

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    Zachary Fadem's questions to Floor & Decor Holdings Inc (FND) leadership • Q3 2024

    Question

    Zachary Fadem of Wells Fargo & Company questioned how much the current operating margin is being constrained by new stores and what the potential for a margin 'snap back' is in a recovery. He followed up by asking at what point the company would consider pushing 2025 store openings into 2026 if comps remain negative.

    Answer

    CFO Bryan Langley acknowledged that new stores are a heavy pressure on margins, but also noted that mature stores are deleveraging for the first time in over a decade due to negative sales. He stated that while a margin recovery won't be immediate, the company has significant earnings power in a growth environment. CEO Tom Taylor added that if the top line worsens, the company would certainly consider delaying store openings, leveraging the flexibility of its back-half weighted 2025 plan.

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    Zachary Fadem's questions to Mister Car Wash Inc (MCW) leadership

    Zachary Fadem's questions to Mister Car Wash Inc (MCW) leadership • Q2 2025

    Question

    Zachary Fadem of Morgan Stanley, on for Simeon Gutman, asked for the key assumptions driving the negative low-double-digit retail comp guidance for the second half of the year. He also requested more color on customer sensitivity to the base membership price increase, particularly the normalization of churn.

    Answer

    CFO Jedidiah Gold explained the guidance extrapolates the Q2 retail trend and factors in a tough comparison in October. He noted some softness among lower-income consumers and underperformance at interior clean sites. On pricing, Gold stated the rollout went as planned, with a slight, temporary uptick in churn for 4-6 weeks before returning to historical levels, consistent with test results.

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    Zachary Fadem's questions to O'Reilly Automotive Inc (ORLY) leadership

    Zachary Fadem's questions to O'Reilly Automotive Inc (ORLY) leadership • Q2 2025

    Question

    Zachary Fadem from Wells Fargo inquired about the mix of immediate-need versus deferrable purchases and the potential impact of the new Virginia distribution center on market share gains and store growth in the Mid-Atlantic and Northeast.

    Answer

    EVP & CFO Jeremy Fletcher noted that a high majority of sales are non-discretionary, with the main risk being consumers deferring maintenance due to broad inflation, not specific price sensitivity. President Brent Kirby and CEO Brad Beckham expressed significant optimism for the Virginia DC, calling the region a 'last frontier' for domestic expansion that will unlock substantial growth opportunities along the I-95 corridor.

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    Zachary Fadem's questions to O'Reilly Automotive Inc (ORLY) leadership • Q3 2024

    Question

    Zachary Fadem from Wells Fargo asked when the deferred maintenance trend began and what typically unlocks that demand, and also inquired about the drivers for the Q4 margin outlook.

    Answer

    CEO Brad Beckham clarified that core maintenance categories remain strong, with softness concentrated in discretionary and some wear-and-tear categories. President Brent Kirby added that demand historically bounces back after tough years. For Q4 margins, CFO Jeremy Fletcher pointed to easier year-over-year SG&A comparisons due to the timing of 2023 investments, not a change in current investment cadence.

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    Zachary Fadem's questions to Advance Auto Parts Inc (AAP) leadership

    Zachary Fadem's questions to Advance Auto Parts Inc (AAP) leadership • Q1 2025

    Question

    Zachary Fadem asked for clarity on expectations for non-GAAP adjustments for the remainder of the year. He also inquired about the consensus view from vendors on like-for-like inflation and sought an update on opportunities to improve margins by renegotiating supplier financing terms.

    Answer

    EVP and CFO Ryan Grimsland noted that of the $150 million in cash expenses for the year, $90 million is complete. CEO Shane O'Kelly stated there are many scenarios for how inflation plays out with vendors and reiterated the company's rational approach. Grimsland added that guidance contemplates various scenarios, with low single-digit inflation being a likely outcome. On vendor financing, Grimsland reported no material changes, with the company continuing to use its supply chain finance program as a tool while always evaluating terms.

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    Zachary Fadem's questions to Advance Auto Parts Inc (AAP) leadership • Q3 2024

    Question

    Zachary Fadem of Wells Fargo questioned how much of the 2025 and 2027 margin targets depend on achieving higher comparable sales. He also asked about the deployment strategy for the ~$1 billion in remaining cash from the Worldpac sale, particularly the decision not to pay down debt immediately.

    Answer

    CFO Ryan Grimsland and CEO Shane O'Kelly clarified that the margin expansion plan is predicated on controllable cost and efficiency actions, not significant top-line growth, which they view as future upside. Regarding the cash, Ryan Grimsland explained they are maintaining balance sheet flexibility during the early stages of the restructuring but reiterated their commitment to paying down debt at or before maturity to achieve their long-term leverage target of 2.5x.

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    Zachary Fadem's questions to Autozone Inc (AZO) leadership

    Zachary Fadem's questions to Autozone Inc (AZO) leadership • Q3 2025

    Question

    Zachary Fadem of Wells Fargo & Company asked about the typical ramp-up period for a Mega Hub, the number of stores they service, Q4 inflation expectations, and the potential P&L implications of LIFO accounting if tariffs are implemented.

    Answer

    CFO Jamere Jackson explained that Mega Hubs ramp faster than typical satellite stores because they become magnets for traffic. On inflation, he expects it to be in a similar 'zip code' in Q4, excluding tariffs. He clarified that if significant tariffs are implemented, it would be inflationary and could lead to a LIFO expense in Q4, but the base assumption is for no LIFO impact.

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    Zachary Fadem's questions to Autozone Inc (AZO) leadership • Q3 2025

    Question

    Zachary Fadem of Wells Fargo & Company asked about the typical ramp-up for a Mega Hub, the number of stores they service, the regional focus of new openings, and the outlook for same-SKU inflation and LIFO in Q4.

    Answer

    CFO Jamere Jackson explained that Mega Hubs ramp faster than the typical five-year maturity for satellite stores because their extensive inventory makes them 'magnets for traffic.' He projected Q4 same-SKU inflation would be similar to Q3, excluding tariffs. However, he noted that significant tariffs could be inflationary and potentially trigger a LIFO expense in Q4, though the base case is for no LIFO impact.

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    Zachary Fadem's questions to Autozone Inc (AZO) leadership • Q2 2025

    Question

    Zachary Fadem from Wells Fargo & Company asked about the impact of the lower-income consumer on DIY performance and the outlook for that segment. He also inquired about the relative performance of national versus independent accounts in the Commercial business.

    Answer

    Executive Philip Daniele acknowledged that the lower-income consumer remains pressured but believes AutoZone will gain share through superior execution and assortment. He noted broad-based growth in Commercial across independent and national accounts, with only the segment tied to used car dealers remaining challenged. CFO Jamere Jackson added that they expect a strong second half for Commercial.

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    Zachary Fadem's questions to Autozone Inc (AZO) leadership • Q4 2024

    Question

    Zachary Fadem from Wells Fargo & Company questioned whether the pandemic-era lag in new car sales could create a future headwind or 'air pocket' for the industry, and asked about the rationale for the current level of SG&A growth per store.

    Answer

    CEO Philip Daniele and CFO Jamere Jackson dismissed the 'air pocket' theory, explaining that cars are lasting longer (average age 12.6 years) and not being scrapped as quickly, which results in a consistently growing car park. Jackson added that SG&A is managed with a balanced approach, funding key growth initiatives while remaining disciplined in a softer sales environment.

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    Zachary Fadem's questions to Tractor Supply Co (TSCO) leadership

    Zachary Fadem's questions to Tractor Supply Co (TSCO) leadership • Q1 2025

    Question

    Zachary Fadem asked for the financial benefit from sale-leasebacks in Q1, the expected annual cadence, and for an update on new store productivity.

    Answer

    CFO Kurt Barton reported a $17 million gain from sale-leasebacks in Q1, which benefited SG&A. He expects the full-year impact to be relatively consistent with prior years, with little year-over-year noise in future quarters. He also stated that new store productivity is strong at 62% on a rolling 12-month basis, near the company's target, and the Allivet acquisition is performing as expected.

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    Zachary Fadem's questions to Tractor Supply Co (TSCO) leadership • Q3 2024

    Question

    Zachary Fadem asked about the performance of Tractor Supply's Project Fusion and garden center initiatives, questioning if the historical mid-single-digit sales lift is still holding and inquiring about the outlook for these programs in 2025.

    Answer

    CEO Hal Lawton confirmed that the performance lift from Project Fusion and garden centers remains strong and continues to outpace the broader chain, contributing significantly to market share gains. He stated that the company plans to continue its remodel pace of 175-225 stores annually and noted that these formats attract a higher mix of female and younger shoppers.

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    Zachary Fadem's questions to National Vision Holdings Inc (EYE) leadership

    Zachary Fadem's questions to National Vision Holdings Inc (EYE) leadership • Q4 2024

    Question

    Speaking on behalf of Zachary Fadem, Taylor Bernard asked for a breakdown of the drivers for the 2025 comparable sales guidance, specifically the mix between traffic and ticket. She also inquired about how potential impacts from immigration policy are reflected in the outlook.

    Answer

    President Alex Wilkes stated that the 2025 comparable sales growth is expected to be driven by 'equal parts traffic and equal parts average ticket,' noting that pricing initiatives from Q4 are holding well. CEO Reade Fahs commented that immigration is viewed as one of many factors influencing overall consumer sentiment and is incorporated into their general assessment of the consumer environment.

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    Zachary Fadem's questions to National Vision Holdings Inc (EYE) leadership • Q3 2024

    Question

    Zachary Fadem of Wells Fargo inquired about key performance indicators for exam capacity increases and utilization trends, and also asked for details on the stores slated for closure, such as their regions, demographics, or vintages.

    Answer

    CEO Reade Fahs did not provide specific utilization KPIs but confirmed that capacity investments are creating incremental exam slots and noted that Q3 saw the lowest optometrist resignations since 2020. CFO Melissa Rasmussen explained that the store closure review was store-specific, targeting less than 5% of the fleet based on profitability and lease terms, rather than any particular vintage or region.

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    Zachary Fadem's questions to Lowe's Companies Inc (LOW) leadership

    Zachary Fadem's questions to Lowe's Companies Inc (LOW) leadership • Q4 2024

    Question

    Zachary Fadem asked if Q4 benefited from 'post-election exuberance' that has since faded, or if the early 2025 slowdown is purely weather-related. He also inquired about the potential impact of other policy dynamics, such as immigration.

    Answer

    CEO Marvin Ellison stated there was 'no real tangible data' to support an election-related sales boost, attributing the recent slowdown to a 'weather story,' as performance is strong where weather is normal. Regarding other policy issues, Ellison affirmed that the company is closely monitoring the environment and has the agility to manage through any political or policy changes that may arise.

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    Zachary Fadem's questions to Chipotle Mexican Grill Inc (CMG) leadership

    Zachary Fadem's questions to Chipotle Mexican Grill Inc (CMG) leadership • Q4 2024

    Question

    Zachary Fadem of Wells Fargo & Company followed up on restaurant-level margins, asking if the high 30% to low 40% incremental margin is still the right long-term model. He also asked about the potential for new international partnerships and the status of the Alshaya relationship.

    Answer

    CFO Adam Rymer confirmed the 40% flow-through model is still intact, with the first half of the year being lower due to the portion investment before climbing back. CEO Scott Boatwright reported the Alshaya partnership is going 'really, really well' with aggressive expansion planned for 2025. He added that Chipotle believes its model works globally and is exploring other partnerships in regions like Southeast Asia or Latin America with large, experienced operators.

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    Zachary Fadem's questions to Starbucks Corp (SBUX) leadership

    Zachary Fadem's questions to Starbucks Corp (SBUX) leadership • Q1 2025

    Question

    Zachary Fadem from Wells Fargo asked how current in-store wait times compare to Mobile Order & Pay (MOP) times, how MOP order abandonment is trending, and what the potential comparable sales opportunity would be if all transactions were under 4 minutes.

    Answer

    CEO Brian Niccol stated the comp opportunity would be positive ('it would go up'). He shared a key learning that MOP order abandonment increases significantly when promise times exceed 15 minutes. The goal of new initiatives, like time slots and better promise times, is to keep waits under that threshold, which frees up capacity to deliver a sub-4-minute experience for in-store customers, creating a harmonious and less overwhelming environment for both customers and partners.

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    Zachary Fadem's questions to RH (RH) leadership

    Zachary Fadem's questions to RH (RH) leadership • Q3 2025

    Question

    Zachary Fadem followed up on the balance sheet, asking about the appetite to pay down debt to reduce interest expense, and questioned the impact of not renewing leases in Germany.

    Answer

    Chairman and CEO Gary Friedman reiterated his view that using debt for the 'currency swap' to buy back stock at $295 was a superior value-creation strategy than paying down debt. Regarding Germany, he explained that taking those leases was a strategic necessity to secure the premier Paris and London locations, accelerating the European launch by a decade. Not renewing the German leases will be accretive to operating margin and EBIT next year.

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    Zachary Fadem's questions to Petco Health and Wellness Company Inc (WOOF) leadership

    Zachary Fadem's questions to Petco Health and Wellness Company Inc (WOOF) leadership • Q2 2024

    Question

    Zachary Fadem inquired about new CEO Joel Anderson's initial impressions, specifically the balance between investing in growth pillars like vet services and simplifying the business to remove costs. He also asked for clarity on the Q3 margin outlook, questioning the drivers between gross margin and SG&A.

    Answer

    CEO Joel Anderson emphasized that the immediate priority is improving profitability by strengthening retail fundamentals, including merchandise excellence, service execution, and operational efficiency, before pivoting to growth. CFO Brian LaRose clarified that the Q3 SG&A trend would be similar to Q1 and Q2, driven by planned store labor investments, and noted the focus remains on improving profitability and free cash flow in a dynamic environment.

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