9:10am- have narrowed gap between companies performance and the industry improvement, but still have a way to go to get to where they want to be.

9:11am- International business performed well during the quarter. Canada comps above US, Mexican stores continue to outperform the market, and China is performing consistent with target.

9:12am- Supplies results were impacted by the housing slow down in the quarter. Working as hard as possible to review the supplies business and make improvements

9:13am- Expect the home building market to remain troubled through the rest of the year. Mortgages have been declining and inventories are continuing to build. Are not planning of any near term improvement.

moving now to Craig Menear, Exec. VP - Merchandising

9:15am- Poor weather in February weighed on the results. March saw improved weather which helped the quarter, but then the first two weeks in April once again turned against the company and provided a tough challenge for the company. Increased lumber costs were also a main factor in the quarter. Housing and weather negatively impacted customer transactions and the average ticket was down 2.9% during the quarter year over year.

9:17am- Bath and flooring have given the company problems. They are working hard on their bath category, and flooring has improved, but still have more improvements that need to be made to get back on track.

9:18am- Appliances saw a share gain for the fourth straight quarter and remains one of the strongest categories for the company.

9:20am- Looking to second quarter, they believe performance relative to the market will continue to improve. Well positioned in seasonal categories and have key programs in place for the upcoming key holidays.

now moving to Paul Reines, Executive VP - US Stores

9:22am- Reduced the number of metrics store managers are held accountable for from 35 to 8. Changed associates compensation structure. Now stores do not have to achieve 100% of store targets, but only 95%. Over 65% of the stores are on target to hit their store incentives. Working at returning to the core policy of quick adaptation to regional changes and needs. The "own the pro" program is improving and they feel confident that they are making progress in bringing the pros back to the business.

9:24am- Year over year spending on store maintenance has doubled and they are getting positive feedback from customers on their store experience. ALthough the progress is not evident in the current earnings, they are confident that the store experience is increasing and customers are seeing better improvements on the floor of the stores. They are working "one customer at a time"

moving to Diane Dayhoff - Senior VP Investors Relations

9:25am- The April weather accounted for 2/3 of the comp miss. The Western division beat the goals for the quarter, but the areas of the country hit by the poor weather pulled overall comp plan down (which missed by over 200 basis points) but the overall market missed by 300 basis points, so they feel they outperformed their market in the quarter.

9:27am- Organic sales fell by over 6% in the quarter led by the weak housing market.

9:29am- In relation to total sales, operating expenses rose 217 basis points during the quarter.

9:31am- Operating margin in retail and supply declined from last year. Operating margin was 8.5%, down over 200 basis points year over year. Long term debt to equity ratio at the end of the quarter was 45% compared with 24% last year. Shares outstanding at end of the quarter was 2 billion shares verse 2.1 billion shares same period last year. During the quarter the company repurchased 3.4 million shares.

9:33am- New stores were 64% as productive as the comp stores, this was down from 66% last year. Reason-- About 28% over the new stores over the last year were international which are typically less productive than US stores.

9:35am- Inventory is higher than planned, mainly as a result of the April poor weather, and now that the weather has turned they are seeing the inventories start to fall once again. Believe the home improvement market will remain soft through the end of the year, but will continue to reinvest in their stores. Earnings guidance is now going to be at low end of the guidance for the year.

moving to the question / answer portion:

9:37am- Matt: share purchase was slower than we had been used to seeing.... how can we view the rest of the year? Company will continue to make the decisions based on market conditions.

9:40am- Gary @ Credit Suisse: Visiting stores Gary sees a big difference in the employees. Can the company see the supply chain business get back to where they want it to be by 2010? Company remains very confident in this plan.

9:43am- Colin @ Bernstein: Looking at the gross margins: Given the activity in the first quarter, do they still see gross margins up over the course of the year? Company did some promotional events during the first quarter that did not pay out as well as they had hoped. Looking ahead, they are working harder at making sure that the promotion events work more effectively and drive gross margin dollars.

9:48am- Steve @ JP Morgan: Looking at payroll... can they speak to the payroll de-leverage? Are they seeing improved service and sales in relation to this? Yes, they are seeing improved results, seeing a significant improvement from customers, as well as employee morale. Will continue to fund the activities in the stores based on what the requirements are in the stores, and are on track for their 200 million de-leverage for the year. Whatever they need to put on the floor of the stores to take care of the customers is what they are going to be doing. next question - Process of Home Depot supply.... A little surprised they haven't decided on the review of the supply business review they have been doing? They do not see the process as being delayed. They are about 90 days into the process, and they feel that the process could be closer to 180 days, that 90 days would have been pretty unheard of to finish the review. Are they encouraged by the process? A lot of things that they are thinking about at this time, and the interest from other people in the assets is strong, and the internal evaluation is going good. Will we hear something by end of next quarter? No comment

9:53am- Eric @ Cleveland Research: Can they talk a little about getting customers back into the store? The compelling values will drive footsteps into the stores and that is what they are trying to remain focussed on. Promotional items will be looked at, but it is by adding compelling values that they think are going to be the secret to getting the customers in the stores, and have them return back to the store after their positive experience.

Well that brings us to an end for this call... all in all the company paints a relatively mixed picture. They see the remainder of the year being weak for the housing market, but continue to believe that in the homebuilding industry they will continue to lead the market.

A lot of talk today about the customer experience and bringing the level of customer satisfaction back up.... what do you see? Have you noticed any material changes in your Home Depot experience over the last year?

Now that the call is over, shares of HD have actually picked up pretty drastically from the 4% loss they were showing earlier this morning. Thirty minutes into the trading day shares are now trading down only 0.6% to 38.76. Looks like the market liked what they hear from the company this morning.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor'sObserver.