HD Supply Holdings, Inc. (NASDAQ:HDS) Q3 2018 Earnings Conference Call Transcript
Dec 04, 2018 • 08:00 am ET
Good day, ladies and gentlemen. Welcome to the HD Supply Third Quarter Earnings Conference Call. As a reminder, this conference call may be recorded.
I'd now like to turn the conference over to Charlotte McLaughlin, Investor Relations. You may begin.
Thank you, Candice. Good morning, ladies and gentlemen, and welcome to the HD Supply Holdings 2018 third quarter earnings call.
(Forward-Looking Cautionary Statements)
The reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available at the end of our slide presentation and in our 2018 third quarter earnings release, both of which are available on our IR website at www.hdsupply.com.
Joe DeAngelo, our CEO, will lead today's call. He will be joined by Brad Paulsen, President of our Facilities Maintenance Business Unit; and Evan Levitt, our CFO, who will provide additional color on our financial performance. There will be an opportunity for Q&A. For those participating, please limit your remarks to one question and one follow-up if necessary. Thank you for your continued interest in HD Supply.
And with that, I will turn the call over to Joe DeAngelo.
Well, thank you, Charlotte. Good morning, everyone. Thank you for joining us today for our 2018 third quarter earnings call. As always, it is my privilege to share our Company's results with you on behalf of the over 11,000 HD Supply associates, who work hard every day as one team driving customer success and value creation.
I want to begin by turning to page three. The team has a lot to be proud of in the third quarter. We delivered exactly what we said we would, when we communicated to the market back in September. Sales and earnings performance were at the high end of our expectations. We delivered 18% sales growth for the third quarter of fiscal 2018 and 9% sales growth on an organic basis, well in excess our 300 basis points target for outgrowth. I was pleased with our earnings performance of 16% adjusted EBITDA growth while continued to generate strong free cash flow of $453 million on a trailing 12-month basis.
Early in the quarter, we promoted Brad Paulsen to run that Facilities Maintenance business unit. Brad joined the Company in late 2015 to lead our Facilities Maintenance merchandising team. He quickly assumed responsibility in other areas including pricing analytics and inventory management. We are excited about the experience and passion that Brad brings to Facilities Maintenance. He is a natural leader and he is off to a great start. You will hear from Brad shortly.
I want to take a moment to update you on our ongoing investments in Facilities Maintenance. We're seeing these investments positively impact our top line with third quarter sales growing approximately 500 basis points in excess of market. We believe we are in the early stages of realizing the full benefits of our investments.
Our enhancements to our sales associate coverage model were employed in early 2018 and the feedback has been positive from both our associates and our