Citing the "significant amount of speculation regarding increased infrastructure investment" in the first year of the Trump administration, HD Supply CEO Joe DeAngelo says the company is cautiously optimistic for the opportunities that might arise.
"HD Supply Waterworks and construction and industrial are very well positioned to benefit from incremental infrastructure spending," DeAngelo said on last week's third-quarter earnings call with analysts. "We believe benefit from the spending would likely occur late 2017 or beyond. Like most, we will continue to monitor this topic."
HD Supply reported sales for the third quarter of $2 billion, an increase of 3.4 percent compared to the same period a year ago, while profit decreased 76 percent to $60 million.
But as HD Supply looks toward 2017 and the new administration's possible policies – something DeAngelo said he'd need to see in detail before getting overly excited – the company has updated its guidance to reflect both the potential and the uncertainty surrounding possible infrastructure investment.
"We’re hopeful that this time around, the infrastructure spend is defined more quickly and is put into place more quickly than it was in 2009," CFO Evan Levitt said. "So hopefully, as a nation we’ve learned from 2009 and the new administration takes that into account, but at this point we’re just speculating."
In spite of the uncertainty, HD Supply remains upbeat about the outlook. DeAngelo told analysts that in "all the discussions I’ve had with customers, suppliers and everybody out there (including 'fellow CEOs'), there is a high degree of optimism."
"We’ve got a little bit of wait-and-see," DeAngelo said. "We’ve got the position right, based on our full inventory, of what we see happening out there."
