Advance Auto Parts

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RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installers and do-it-yourself customers, today announced that it has appointed Shweta Bhatia as executive vice president and chief technology officer, effective immediately. “Shweta’s history of successfully executing transformational programs that focus on speed, efficiency, and providing quality solutions to customers will greatly contribute to the execution of our three-year financial plan,” Shane O’Kelly, president and chief executive officer. “We welcome Shweta to our leadership team that is passionate about carrying out our decisive actions which will set up Advance for future growth and value creation.” Ms. Bhatia brings more than 20 years of retail, technology, and operational experience to Advance. Most recently, Ms. Bhatia served as senior vice president of technology at Dollar General where she led a multi-year, end-to-end technology transformation and modernization to enhance the company’s operational efficiency. Ms. Bhatia also served as the vice president of technology at both Walmart International, where she led the company’s core retail technology portfolio, and Kohl’s Corporation, where she managed the strategy and implementation of solutions across multiple channels. Her passion for modern technology transformation began as an entrepreneur, creating the tech startup, Wisdom Info Tech, an award-winning technology firm. Ms. Bhatia received her MBA at the Amity Business School and a bachelor's degree at IT College, both located in India. View the full article

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Announces Asset Optimization Program Targeting Reduction of 500 Corporate Stores, 200 Independently Owned Locations and Four Distribution Centers by Mid-2025 Introduces New Fiscal 2027 Financial Objectives Targeting Approximately 7% Adjusted Operating Income Margin (1) and Approximately 2.5x Debt Leverage Ratio; Provides Preliminary 2025 Guidance Identifies Over 500-basis points of Operating Margin Expansion Opportunity Through Fiscal 2027 With Focus on Core Retail Fundamental Excellence RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, announced its financial results for the third quarter ended October 5, 2024. "We are pleased to have made progress on our strategic actions, including the completion of the sale of Worldpac and a comprehensive operational productivity review of our business,” said Shane O’Kelly, president and chief executive officer. “We are charting a clear path forward and introducing a new three-year financial plan, with a focus on executing core retail fundamentals to improve the productivity of all our assets and to create shareholder value." On November 1, 2024, the company completed its previously announced sale of Worldpac for aggregate cash consideration of approximately $1.5 billion, as adjusted for working capital and other items. Unless otherwise specified, results are presented on a continuing operations basis. Third Quarter 2024 Results (1,2,3,4) Third quarter 2024 net sales from continuing operations totaled $2.1 billion, compared with $2.2 billion in the third quarter of the prior year. Comparable store sales decreased 2.3%. The company's gross profit increased 11.0% to $907.9 million, or 42.3% of net sales compared with 36.9% in the third quarter of the prior year. The leverage improvement was primarily due to lapping the one-time impact in the change for inventory reserves in the prior year as well as stabilizing product costs offset by strategic pricing investments. The company's SG&A expenses were $907.5 million, or 42.2% of net sales. Adjusted SG&A expenses were $891.2 million, or 41.5% of net sales compared with 40.2% in the third quarter of 2023, primarily due to lower sales. The company also incurred high labor-related expenses due to wage investments in frontline team members that were partially offset by a reduction in marketing expenses. The company's operating income was $403.0 thousand, or zero percent of net sales. Adjusted operating income was $16.7 million, or 0.8% of net sales compared with (3.3)% in the third quarter of 2023. In addition, our operating income margin was negatively impacted by approximately 125 basis points of atypical items and headwinds in the period (such as lost revenue from Hurricane Helene and downtime from the CrowdStrike outage) that are not included in non-GAAP adjustments. The company's effective tax rate was (58.4)%, compared with 24.5% in the third quarter of 2023. The company's diluted loss per share for the quarter was $0.42. The company's adjusted diluted loss per share was $0.04 compared with a loss per share of $1.19 in the third quarter of 2023. The types of unusual headwinds in the quarter noted above, which are not included in the non-GAAP adjustments, negatively impacted the company's earnings per share by 34 cents. Net cash provided by operating activities was $81.0 million through the third quarter of 2024 versus $28.3 million of cash used in operating activities in the same period of the prior year. Free cash flow through the third quarter of 2024 was an outflow of $48.7 million compared with an outflow of $202.5 million in the same period of the prior year. (1) Adjusted Operating Income Margin is a non-GAAP measure. For a better understanding of the company’s non-GAAP adjustments, refer to the reconciliation of non-GAAP financial measures in the accompanying financial tables. (2) All comparisons are based on continuing operations for the same time period in the prior year, unless otherwise specified. The company calculates comparable store sales based on the change in store or branch sales starting once a location has been open for approximately one year and by including e-commerce sales and excluding sales fulfilled by distribution centers to independently owned Carquest locations. Acquired stores are included in the company's comparable store sales one year after acquisition. The company includes sales from relocated stores in comparable store sales from the original date of opening. (3) As reported in the company’s fourth quarter and full year 2023 earnings release, the company corrected non-material errors in certain previously reported financials. All comparisons are based on the corrected historical results as presented in the company’s prior earnings release dated February 28, 2024. (4) On August 22, 2024, the company entered into a definitive purchase agreement to sell its Worldpac Inc. business (“Worldpac”), which reflects a strategic shift in its business. The sale was completed on November 1, 2024. As a result, the company has classified the results of operations and cash flows of Worldpac as discontinued operations in its condensed consolidated statements of operations and condensed consolidated statements of cash flows for all periods presented. The related assets and liabilities associated with the discontinued operations are classified as held for sale in the condensed consolidated balance sheets. Capital Allocation On October 29, 2024, the company declared a regular cash dividend of $0.25 per share to be paid on January 24, 2025, to all common stockholders of record as of January 10, 2025. Full Year 2024 Guidance For the balance of 2024, the company is providing guidance that includes expectations for continuing operations as well as adjusted metrics that take into account non-GAAP adjustments. As of November 14, 2024 ($ in millions, except per share data) Low High Net sales from continuing operations Approx. $9,000 Comparable store sales (1) Approx. (1.0%) Adjusted operating income margin from continuing operations 0.25 % 0.75 % Adjusted diluted EPS from continuing operations $ (0.60 ) $ 0.00 Capital expenditures $ 175 $ 225 Free cash flow (2) Approx. flat (including strategic costs) (1) The company calculates comparable store sales based on the change in store or branch sales starting once a location has been open for approximately one year and by including e-commerce sales and excluding sales fulfilled by distribution centers to independently owned Carquest locations. Acquired stores are included in the company's comparable store sales one year after acquisition. The company includes sales from relocated stores in comparable store sales from the original date of opening. (2) Adjusted operating income margin from continuing operations, Adjusted diluted EPS from continuing operations and Free cash flow are non-GAAP measures. For a better understanding of the company's non-GAAP adjustments, refer to the reconciliation of non-GAAP financial measures in the accompanying financial tables. The company is not able to provide a reconciliation of these forward-looking non-GAAP measures because it is unable to predict with reasonable accuracy the value of certain adjustments and as a result, the comparable GAAP measures are unavailable without unreasonable efforts. Strategic Priorities and Financial Objectives Strategic Priorities The company is executing a strategic plan to improve business performance with a focus on core retail improvements. The company has identified opportunities that it believes can improve adjusted operating income margin by more than 500-basis points through fiscal 2027. This strategic plan is anchored on three pillars outlined below to put the company on the path to deliver consistent profitable growth. Store operations Reduction in U.S. asset footprint - closing 523 Advance corporate stores, exiting 204 independent locations, and closing four distribution centers. Standardization of store operating model and improving labor productivity. Acceleration in pace of new store openings. Merchandising excellence Strategic sourcing to improve first costs and bring parts to market faster. Assortment management to enhance availability of parts. Pricing and promotions management to improve gross margin. Supply chain Consolidation of distribution centers to operate 13 large facilities by 2026. Opening of 60 market hub locations by mid-2027. Optimization of transportation routes and freight to lower costs and improve productivity. Financial Objectives (Advance Auto Parts continuing operations) The company is introducing new fiscal 2027 financial objectives and providing preliminary fiscal 2025 guidance. Preliminary FY 2025 Guidance (53 weeks) FY 2027 Objectives Net sales ($ in millions) $8,400 - $8,600 Approx. $9,000 Comparable sales growth 0.50% - 1.50% Positive low-single-digit % New store growth 30 new stores 50 to 70 new stores Adjusted operating income margin (1) 2.00% - 3.00% Approx. 7.00% Leverage Ratio (Adj. debt/ Adj. EBITDAR) (1) 3.0x – 4.0x Approx. 2.5x (1) Adjusted operating income margin is based on performance of Advance continuing operations and excludes intercompany margins related to Worldpac. Adjusted operating income margin from continuing operations and Adjusted Debt to Adjusted EBITDAR ratio (“leverage ratio”) are non-GAAP measures. For a better understanding of the company’s non-GAAP adjustments, refer to the reconciliation of non-GAAP financial measures in the accompanying financial tables. The company is not able to provide a reconciliation of these forward-looking non-GAAP measures because it is unable to predict with reasonable accuracy the value of certain adjustments and as a result, the comparable GAAP measures are unavailable without unreasonable efforts. Investor Conference Call The company will detail its results for the third quarter ended October 5, 2024, via a webcast scheduled to begin at 8 a.m. Eastern Time on Thursday, November 14, 2024. The webcast will be accessible via the Investor Relations page of the company's website (ir.AdvanceAutoParts.com). To join by phone, please pre-register online for dial-in and passcode information. Upon registering, participants will receive a confirmation with call details and a registrant ID. While registration is open through the live call, the company suggests registering a day in advance or at minimum 10 minutes before the start of the call. A replay of the conference call will be available on the company's Investor Relations website for one year. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installers and do-it-yourself customers. As of October 5, 2024, Advance operated 4,781 stores primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,125 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com. Forward-Looking Statements Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast, “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “target,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about the company’s strategic initiatives, restructuring and asset optimization plans, financial objectives, operational plans and objectives, statements about the sale of the company’s Worldpac business, including statements regarding the benefits of the sale and use of proceeds therefrom, statements regarding expectations for economic conditions, future business and financial performance, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect the company’s views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, the company’s ability to hire, train and retain qualified employees, the timing and implementation of strategic initiatives, risks associated with the company’s restructuring and asset optimization plans, deterioration of general macroeconomic conditions, geopolitical factors, the highly competitive nature of the industry, demand for the company’s products and services, ongoing risks associated with the disposition of Worldpac, the company’s ability to maintain credit ratings, risks relating to the impairment of assets, including intangible assets such as goodwill, access to financing on favorable terms, complexities in the company’s inventory and supply chain and challenges with transforming and growing its business. Please refer to “Item 1A. Risk Factors” of the company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by the company’s subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) (unaudited) October 5, 2024 December 30, 2023 Assets Current assets: Cash and cash equivalents $ 464,492 $ 488,049 Receivables, net 668,937 609,528 Inventories, net 4,042,200 3,893,569 Other current assets 180,448 180,402 Current assets held for sale 2,137,690 1,205,473 Total current assets 7,493,767 6,377,021 Property and equipment, net 1,479,738 1,555,985 Operating lease right-of-use assets 2,399,630 2,347,073 Goodwill 600,182 601,159 Other intangible assets, net 409,501 419,161 Other noncurrent assets 85,366 85,988 Noncurrent assets held for sale — 889,939 Total assets $ 12,468,184 $ 12,276,326 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,498,460 $ 3,526,079 Accrued expenses 641,914 616,067 Other current liabilities 458,343 396,408 Current liabilities held for sale 994,824 768,851 Total current liabilities 5,593,541 5,307,405 Long-term debt 1,788,513 1,786,361 Noncurrent operating lease liabilities 2,018,383 2,039,908 Deferred income taxes 380,118 355,635 Other long-term liabilities 89,949 83,538 Noncurrent liabilities held for sale — 183,751 Total stockholders' equity 2,597,680 2,519,728 Total liabilities and stockholders’ equity $ 12,468,184 $ 12,276,326 Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share data) (unaudited) Twelve Weeks Ended Forty Weeks Ended October 5, 2024 October 7, 2023 (1) October 5, 2024 October 7, 2023 (1) Net sales $ 2,147,991 $ 2,218,205 $ 7,098,302 $ 7,194,670 Cost of sales, including purchasing and warehousing costs 1,240,093 1,400,638 4,036,898 4,154,190 Gross profit 907,898 817,567 3,061,404 3,040,480 Selling, general and administrative expenses 907,495 896,145 2,954,707 2,959,238 Operating income (loss) 403 (78,578 ) 106,697 81,242 Other, net: Interest expense (18,805 ) (19,375 ) (62,127 ) (69,948 ) Other income (expense), net 2,393 (305 ) 12,769 232 Total other, net (16,412 ) (19,680 ) (49,358 ) (69,716 ) (Loss) income before provision for income taxes (16,009 ) (98,258 ) 57,339 11,526 Provision for income taxes 9,354 (24,072 ) 34,763 6,360 Net (loss) income from continuing operations (25,363 ) (74,186 ) 22,576 5,166 Net income from discontinued operations 19,349 12,149 56,413 59,696 Net (loss) income $ (6,014 ) $ (62,037 ) $ 78,989 $ 64,862 Basic (loss) earnings per common share from continuing operations $ (0.42 ) $ (1.25 ) $ 0.38 $ 0.09 Basic earnings per common share from discontinued operations 0.32 0.20 0.95 1.00 Basic (loss) earnings per common share $ (0.10 ) $ (1.05 ) $ 1.33 $ 1.09 Basic weighted-average common shares outstanding 59,684 59,474 59,618 59,411 Diluted (loss) earnings per common share from continuing operations $ (0.42 ) $ (1.24 ) $ 0.38 $ 0.09 Diluted earnings per common share from discontinued operations 0.32 0.20 0.94 1.00 Diluted (loss) earnings per common share $ (0.10 ) $ (1.04 ) $ 1.32 $ 1.09 Diluted weighted-average common shares outstanding 59,902 59,630 59,878 59,588 (1) The condensed consolidated statement of operations for the twelve and forty weeks ended October 7, 2023, reflects the correction of non-material errors the company discovered in previously reported results. Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (In thousands) (unaudited) Forty Weeks Ended October 5, 2024 October 7, 2023 Cash flows from operating activities: Net income $ 78,989 $ 64,862 Net income from discontinued operations 56,413 59,696 Net income from continuing operations 22,576 5,166 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 217,197 206,658 Share-based compensation 33,810 33,777 (Gain) Loss on sale and impairment of long-lived assets (14,273 ) 1,886 Provision for deferred income taxes 24,289 (27,811 ) Other, net 2,986 2,436 Net change in: Receivables, net (60,383 ) (161,629 ) Inventories, net (152,229 ) (110,871 ) Accounts payable (25,225 ) (77,336 ) Accrued expenses 30,794 171,117 Other assets and liabilities, net 1,477 (71,707 ) Net cash provided by (used in) operating activities from continuing operations 81,019 (28,314 ) Net cash provided by operating activities from discontinued operations 76,917 57,148 Net cash provided by operating activities 157,936 28,834 Cash flows from investing activities: Purchases of property and equipment (129,714 ) (174,186 ) Proceeds from sales of property and equipment 13,232 2,001 Net cash used in investing activities of continuing operations (116,482 ) (172,185 ) Net cash used in investing activities of discontinued operations (7,988 ) (13,015 ) Net cash used in investing activities (124,470 ) (185,200 ) Cash flows from financing activities: Borrowings under credit facilities — 4,805,000 Payments on credit facilities — (4,990,000 ) Borrowings on senior unsecured notes — 599,571 Dividends paid (44,882 ) (194,322 ) Purchases of noncontrolling interests (9,101 ) — Proceeds from the issuance of common stock 2,995 3,045 Repurchases of common stock (5,601 ) (14,237 ) Other, net (1,143 ) (5,010 ) Net cash (used in) provided by financing activities (57,732 ) 204,047 Forty Weeks Ended October 5, 2024 October 7, 2023 Effect of exchange rate changes on cash 11,766 (1,932 ) Net (decrease) increase in cash and cash equivalents (12,500 ) 45,749 Cash and cash equivalents, beginning of period 503,471 270,805 Cash and cash equivalents, end of period $ 490,971 $ 316,554 Summary of cash and cash equivalents: Cash and cash equivalents of continuing operations, end of period $ 464,492 $ 308,804 Cash and cash equivalents of discontinued operations, end of period 26,479 7,750 Cash and cash equivalents , end of period $ 490,971 $ 316,554 (1) The condensed consolidated statement of cash flows for the forty weeks ended October 7, 2023, reflects the correction of non-material errors the company discovered in previously reported results. Restatement of Previously Issued Financial Statements During the fiscal year ended December 30, 2023, the company identified errors primarily impacting cost of sales, selling, general and administrative costs and other income/expenses, net, incurred in prior years but not previously recognized. The company evaluated the errors and determined that the related impacts were not material to the previously issued consolidated financial statements for any prior period. A summary of the corrections to the impacted financial statement line items in the company's Condensed Consolidated Statement of Operations for the twelve and forty weeks ended October 7, 2023, and the company's Condensed Consolidated Statement of Cash Flows for the forty weeks ended October 7, 2023, included in the company's previously filed Annual Report on Form 10-K are presented below: Condensed Consolidated Statement of Operations October 7, 2023 Twelve Weeks Ended (in thousands) As Previously Reported Adjustments As Corrected Discontinued Operations As Corrected, after Discontinued Operations Cost of sales $ 1,732,420 $ 16,379 $ 1,748,799 $ 348,161 $ 1,400,638 Gross profit 986,659 (16,379 ) 970,280 152,713 817,567 Selling, general and administrative expenses 1,030,355 878 1,031,233 135,088 896,145 Operating (loss) income (43,696 ) (17,257 ) (60,953 ) 17,625 (78,578 ) (Loss) Income before provision for income taxes (64,319 ) (17,257 ) (81,576 ) 16,682 (98,258 ) Provision for income taxes (15,686 ) (3,853 ) (19,539 ) 4,533 (24,072 ) Net (loss) income $ (48,633 ) $ (13,404 ) $ (62,037 ) $ 12,149 $ (74,186 ) Basic (loss) earnings per share $ (0.82 ) $ (0.23 ) $ (1.05 ) $ 0.20 $ (1.25 ) Diluted (loss) earnings per common share $ (0.82 ) $ (0.22 ) $ (1.04 ) $ 0.20 $ (1.24 ) Condensed Consolidated Statement of Operations October 7, 2023 Forty Weeks Ended (in thousands) As Previously Reported Adjustments As Corrected Discontinued Operations As Corrected, after Discontinued Operations Cost of sales $ 5,220,200 $ 29,877 $ 5,250,077 $ 1,095,887 $ 4,154,190 Gross profit 3,602,538 (29,877 ) 3,572,661 532,181 3,040,480 Selling, general and administrative expenses 3,407,445 2,272 3,409,717 450,479 2,959,238 Operating income (loss) 195,093 (32,149 ) 162,944 81,702 81,242 Income (loss) before provision for income taxes 124,894 (32,149 ) 92,745 81,219 11,526 Provision for income taxes 34,649 (6,766 ) 27,883 21,523 6,360 Net income (loss) $ 90,245 $ (25,383 ) $ 64,862 $ 59,696 $ 5,166 Basic earnings (loss) per share $ 1.52 $ (0.43 ) $ 1.09 $ 1.00 $ 0.09 Diluted earnings (loss) per common share $ 1.51 $ (0.42 ) $ 1.09 $ 1.00 $ 0.09 Condensed Consolidated Statement of Cash Flows Forty Weeks Ended October 7, 2023 (in thousands) As Previously Reported Adjustments As Corrected Discontinued Operations As Corrected, after Discontinued Operations Net income $ 90,245 $ (25,383 ) $ 64,862 $ 59,696 $ 5,166 Provision for deferred income taxes (33,059 ) 5,248 (27,811 ) — (27,811 ) Other, net 1,499 937 2,436 — 2,436 Net change in: Receivables, net (170,371 ) (9,519 ) (179,890 ) (18,261 ) (161,629 ) Inventories, net (41,025 ) 15,442 (25,583 ) 85,288 (110,871 ) Accounts payable (191,871 ) 28,500 (163,371 ) (86,035 ) (77,336 ) Accrued expenses 145,704 21,521 167,225 (3,892 ) 171,117 Other assets and liabilities, net (45,015 ) (38,316 ) (83,331 ) (11,624 ) (71,707 ) Net cash provided by (used in) operating activities 30,404 (1,570 ) 28,834 57,148 (28,314 ) Other, net (1) (4,073 ) (937 ) (5,010 ) — (5,010 ) Net cash provided by financing activities 204,984 (937 ) 204,047 Effect of exchange rate changes on cash (1,942 ) 10 (1,932 ) Net increase (decrease) in cash and cash equivalents 48,246 (2,497 ) 45,749 Cash and cash equivalents, beginning of period 269,282 1,523 270,805 50,670 220,135 Cash and cash equivalents, end of period $ 317,528 $ (974 ) $ 316,554 $ 7,750 $ 308,804 (1) The summary of corrections table above inadvertently omitted disclosure for proceeds from the issuance of common stock as follows: $3.0 million as previously reported, $0 adjustments and $3.0 million as corrected. Reconciliation of Non-GAAP Financial Measures The company's financial results include certain financial measures not derived in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Non-GAAP financial measures, including Adjusted Net income, Adjusted EPS, Adjusted SG&A Margin, and Adjusted Operating Income, should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows. The company has presented these non-GAAP financial measures as the company believes that the presentation of the financial results that exclude (1) transformation expenses under the company’s turnaround plan, (2) other significant costs and (3) nonrecurring tax expense are useful and indicative of the company's base operations because the expenses vary from period to period in terms of size, nature and significance. These measures assist in comparing the company’s current operating results with past periods and with the operational performance of other companies in the industry. The disclosure of these measures allows investors to evaluate the company’s performance using the same measures management uses in developing internal budgets and forecasts and in evaluating management’s compensation. Included below is a description of the expenses the company has determined are not normal, recurring cash operating expenses necessary to operate the company’s business and the rationale for why providing these measures is useful to investors as a supplement to the GAAP measures. Transformation Expenses — Costs incurred in connection with the company's turnaround plan and specific transformative activities related to asset optimization that the company does not view to be normal cash operating expenses. These expenses primarily include: Distribution network optimization — Costs primarily relating to the conversion of the stores and DCs to market hubs, including temporary labor, team member severance, long-lived asset write off charges and incremental depreciation, as a result of accelerating depreciation of long-lived assets over a shorter useful life as a result of the optimization plans. Third-party professional services — Costs relating to non-recurring services rendered by third-party vendors assisting with the turnaround initiatives. Other Expenses — Costs incurred by the company that are not viewed as normal cash operating expenses and vary from period to period in terms of size, nature, and significance, including but not limited to executive turnover and incremental costs associated with remediating the company's previously-disclosed material weaknesses in internal control over financial reporting. Nonrecurring Tax Expense — Income tax incurred by the company from the book to tax basis difference in the Worldpac Canada stock directly resulting from the sale of Worldpac. The following tables include reconciliations of this information to the most comparable GAAP measures: Reconciliation of Adjusted Net Income and Adjusted EPS: Twelve Weeks Ended Forty Weeks Ended (in thousands, except per share data) October 5, 2024 October 7, 2023 October 5, 2024 October 7, 2023 Net (loss) income from continuing operations (GAAP) $ (25,363 ) $ (74,186 ) $ 22,576 $ 5,166 Selling, general and administrative adjustments: Transformation expenses: Distribution network optimization 8,909 — 13,943 — Third-party professional services 3,582 50 5,301 320 Other charges: Executive turnover 87 3,799 1,561 5,360 Material weakness remediation 1,293 429 3,649 429 Other significant costs (1) 2,394 — 3,491 — Provision for income taxes on adjustments (2) (4,066 ) (1,070 ) (6,986 ) (1,527 ) Nonrecurring tax expense 10,000 — 10,000 — Adjusted net (loss) income (Non-GAAP) $ (3,164 ) $ (70,978 ) $ 53,535 $ 9,748 Diluted (loss) earnings per share from continuing operations (GAAP) $ (0.42 ) $ (1.24 ) $ 0.38 $ 0.09 Adjustments, net of tax 0.38 0.05 0.52 0.08 Adjusted EPS (Non-GAAP) $ (0.04 ) $ (1.19 ) $ 0.90 $ 0.17 (1) During the twelve and forty weeks ended October 5, 2024, the Company recorded expense of $2.4 million and $3.5 million for costs incurred following a cybersecurity incident that occurred over these periods. (2) The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustments. Reconciliation of Adjusted Selling, General and Administrative Expenses Twelve Weeks Ended Forty Weeks Ended (in thousands) October 5, 2024 October 7, 2023 October 5, 2024 October 7, 2023 SG&A (GAAP) $ 907,495 $ 896,145 $ 2,954,707 $ 2,959,238 SG&A adjustments 16,265 4,278 27,945 6,109 Adjusted SG&A (Non-GAAP) $ 891,230 $ 891,867 $ 2,926,762 $ 2,953,129 Reconciliation of Adjusted Operating Income: Twelve Weeks Ended Forty Weeks Ended (in thousands) October 5, 2024 October 7, 2023 October 5, 2024 October 7, 2023 Operating income (GAAP) $ 403 $ (78,578 ) $ 106,697 $ 81,242 SG&A adjustments 16,265 4,278 27,945 6,109 Adjusted operating income (Non-GAAP) $ 16,668 $ (74,300 ) $ 134,642 $ 87,351 NOTE: Adjusted SG&A, Adjusted SG&A as a percentage of Net sales, Adjusted operating income and Adjusted operating income margin (calculated by dividing Adjusted operating income by Net sales) are non-GAAP measures. Management believes these non-GAAP measures are important metrics in assessing the overall performance of the business and utilizes these metrics in its ongoing reporting. On that basis, management believes it is useful to provide these metrics to investors and prospective investors to evaluate the company’s operating performance across periods adjusting for these items (refer to the reconciliations of non-GAAP adjustments above). These non-GAAP measures might not be calculated in the same manner as, and thus might not be comparable to, similarly titled measures reported by other companies. Non-GAAP measures should not be used by investors or third parties as the sole basis for formulating investment decisions, as they may exclude a number of important cash and non-cash recurring items. Reconciliation of Free Cash Flow: (1) Forty Weeks Ended (in thousands) October 5, 2024 October 7, 2023 Cash flows provided by operating activities of continuing operations $ 81,019 $ (28,314 ) Purchases of property and equipment (129,714 ) (174,186 ) Free cash flow $ (48,695 ) $ (202,500 ) Adjusted Debt to Adjusted EBITDAR: (1) Four Quarters Ended (In thousands, except adjusted debt to adjusted EBITDAR ratio) October 5, 2024 December 30, 2023 Total GAAP debt $ 1,788,513 $ 1,786,361 Add: Operating lease liabilities 2,711,578 2,660,827 Adjusted debt $ 4,500,091 $ 4,447,188 GAAP Net income $ 50,819 $ 29,735 Depreciation and amortization 309,566 306,454 Interest expense 80,559 88,055 Other expense, net (16,174 ) (5,525 ) Provision for income taxes 23,843 2,112 Rent expense 638,232 613,859 Share-based compensation 46,557 45,647 Other charges (2) 40,091 12,419 Transformation related charges 27,131 29,719 Adjusted EBITDAR $ 1,200,624 $ 1,122,475 Adjusted Debt to Adjusted EBITDAR 3.7 4.0 (1) The four quarters ended October 5, 2024, includes the correction of non-material errors the company discovered in previously reported results. (2) The adjustments to the four quarters ended October 5, 2024, and December 30, 2023, include expenses associated with the company's material weakness remediation efforts and executive turnover. NOTE: Management believes its Adjusted Debt to Adjusted EBITDAR ratio (“leverage ratio”) is a key financial metric for debt securities, as reviewed by rating agencies, and believes its debt levels are best analyzed using this measure. The company’s goal is to maintain an investment grade rating. The company's credit rating directly impacts the interest rates on borrowings under its existing credit facility and could impact the company's ability to obtain additional funding. If the company was unable to maintain its investment grade rating, this could negatively impact future performance and limit growth opportunities. Similar measures are utilized in the calculation of the financial covenants and ratios contained in the company's financing arrangements. The leverage ratio calculated by the company is a non-GAAP measure and should not be considered a substitute for debt to net earnings, as determined in accordance with GAAP. The company adjusts the calculation to remove rent expense and to add back the company’s existing operating lease liabilities related to their right-of-use assets to provide a more meaningful comparison with the company’s peers and to account for differences in debt structures and leasing arrangements. The company’s calculation of its leverage ratio may not be calculated in the same manner as other companies, and thus may not be comparable to similarly titled measures used by other companies. Store Information During the forty weeks ended October 5, 2024, 23 stores were opened and 29 were closed, resulting in a total of 4,781 stores as of October 5, 2024, compared with a total of 4,786 stores as of December 30, 2023. The below table summarizes the changes in the number of company-operated stores during the twelve and forty weeks ended October 5, 2024: Twelve Weeks Ended AAP CARQUEST Total July 15, 2024 4,484 292 4,776 New 9 — 9 Closed (2 ) (2 ) (4 ) Converted 1 (1 ) — October 5, 2024 4,492 289 4,781 Forty Weeks Ended AAP CARQUEST Total December 30, 2023 4,484 302 4,786 New 23 — 23 Closed (17 ) (12 ) (29 ) Converted 2 (1 ) 1 October 5, 2024 4,492 289 4,781 View the full article

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RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, announced its financial results for the second quarter ended July 13, 2024. “Our team delivered positive comparable sales growth while navigating a challenging demand environment during the second quarter. I would like to thank the team for their hard work and dedication to serving our customers,” said Shane O’Kelly, president and chief executive officer. “We continue to make progress on our decisive actions with an increased focus on the Advance blended box. This morning, we announced the sale of Worldpac for $1.5 billion. This transaction is a critical milestone in our turnaround as it enables us to strengthen our balance sheet and streamline our focus. The next chapter of our strategic and operational review will now focus on the remaining Advance business, with the goal of improving our sales trajectory and the productivity of all our assets to deliver stronger returns for our shareholders.” Second Quarter 2024 Results (1,2) Second quarter 2024 net sales totaled $2.7 billion, which was flat compared with the second quarter of the prior year. Comparable store sales increased 0.4%. The company's gross profit decreased 2.3% to $1.1 billion. Gross profit margin was 41.5% compared with 42.5% in the second quarter of the prior year. This was primarily due to the company's strategic pricing investments and higher product costs. SG&A expenses were $1.0 billion, or 38.9% of net sales compared with 37.8% in the second quarter of 2023. This increase was primarily due to wage investments in frontline team members and an increase in professional fees, including costs associated with the implementation of the company's strategic plan and the remediation of the company’s previously-disclosed material weaknesses. This was partially offset by a reduction in marketing expenses. The company's operating income was $71.8 million, or 2.7% of net sales compared with 4.7% in the second quarter of 2023. The company's effective tax rate was 27.5%, compared with 26.4% in the second quarter of 2023. The company's diluted EPS was $0.75, compared with $1.32 in the second quarter of 2023. Net cash provided by operating activities was $87.8 million through the second quarter of 2024 versus $167.1 million of cash used in operating activities in the same period of the prior year. Free cash flow through the second quarter of 2024 was an outflow of $4.6 million compared with an outflow of $312.0 million in the same period of the prior year. View the full article

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RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installers and do-it-yourself customers, will report its second quarter 2024 results before the market opens on Thursday, August 22, 2024. Interested parties can listen to the event via a webcast scheduled to begin at 8:00 a.m. Eastern Time on Thursday, August 22, 2024. The webcast will be accessible via the company’s Investor Relations website ( ir.AdvanceAutoParts.com ). To join by phone, please pre-register online for dial-in and passcode information. Upon registering, participants will receive a confirmation with call details and a registrant ID. While registration is open through the live call, the company suggests registering a day in advance or at minimum 10 minutes before the start of the call. A replay of the conference call will be available on the company’s Investor Relations website for one year. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of April 20, 2024, Advance operated 4,777 stores and 320 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,152 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com . View the full article

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RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, today announced that Ken Bush, senior vice president, chief merchant, will retire from the company after nearly 20 years and be succeeded by Bruce Starnes, who has been named executive vice president, chief merchant, effective June 24, 2024. Mr. Starnes, 48, who will lead all aspects of merchandising strategy, joins Advance from the Target Corporation where he spent nearly 20 years in a variety of product management roles of increasing responsibility. Most recently, he served as senior vice president, merchandising capabilities and operations, where he was responsible for the strategy, capability and execution of Target’s merchandising operations, including price and promotions, in-store presentation, sales plans, negotiations, partnerships and vendor experience. Previously, he served as president of Target India and vice president, digital solutions and partnerships. “We are very grateful for the many contributions Ken has made to our industry over the past 37 years. He has helped strengthen our merchandising operations and built a talented team within the merchandising organization, making it an optimum time to make a leadership transition. We wish him all the best in his upcoming, well-deserved retirement,” said Shane O’Kelly, Advance’s president and CEO. “I’m excited to welcome Bruce to the Advance family. As a seasoned and accomplished merchandising executive with more than 25 years of experience, Bruce brings a deep understanding of successful merchandising operations and vendor partnerships as well as a proven track record of results at one of the world’s leading retail organizations. I look forward to working closely with him to take our merchandising operations to the next level.” View the full article

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RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, announced its financial results for the first quarter ended April 20, 2024. “Our team continues to execute against our decisive actions, including commencing our supply chain consolidation and making meaningful progress toward the potential sale of Worldpac,” said Shane O’Kelly, president and chief executive officer. “While the industry experienced a slower start to 2024 compared with our expectations, the actions we began in the back half of last year will help us streamline our operations for the long term. Our leadership team and I continue to focus on improving the core fundamentals of our business while reducing costs, which is reflected in our year-over-year SG&A reduction. As previously announced, we are reinvesting a portion of the savings back into the foundation of our business, including frontline compensation and training. We also made progress on our other decisive actions, including beginning three of our DC to market hub conversions. “We continue to work on improving our overall performance by removing complexities and distractions to increase our value proposition and deliver shareholder value. We recognize we still have significant work ahead of us, however the actions we're taking will put us on the path to delivering improved results. I want to thank all our team members for their continued commitment to serving our customers as we navigate through this pivotal year for Advance.” First Quarter 2024 Results (1,2) First quarter 2024 net sales totaled $3.4 billion, a 0.3% decrease compared with the first quarter of the prior year. Comparable store sales decreased 0.2%. The company's gross profit decreased 2.2% to $1.4 billion. Gross profit margin of 42.0% decreased 82 basis points compared with the first quarter of the prior year. This was primarily driven by increased costs that were not fully covered by pricing actions. These were partially offset by supply chain productivity. SG&A expenses were $1.3 billion, which improved to 39.4% of net sales compared with 39.9% in the first quarter of 2023. This was primarily driven by the cost control efforts initiated at the end of 2023, including reduced corporate expenditures from the decrease in headcount and significant reduction of marketing expenses as well as a net gain on asset sales. These were partially offset by the reinvestment in field wages and training as well as typical expense inflationary pressure. The company's operating income was $86.0 million, or 2.5% of net sales, compared with 2.9% in the first quarter of 2023. The company's effective tax rate was 33.2%, compared with 28.5% in the first quarter of 2023. The higher effective income tax rate was due to a discrete charge for share-based compensation. The company's diluted EPS was $0.67 compared with $0.81 in the first quarter of 2023. Net cash provided by operating activities was $2.7 million through the first quarter of 2024 versus $382.5 million of cash used in operating activities in the same period of the prior year. Free cash flow through the first quarter of 2024 was an outflow of $46.3 million compared with an outflow of $472.5 million in the same period of the prior year. Capital Allocation On May 21, 2024, the company declared a regular cash dividend of $0.25 per share to be paid on July 26, 2024 to all common stockholders of record as of July 12, 2024. __________________________________ (1) All comparisons are based on the same time period in the prior year. Comparable store sales include locations open for 13 complete accounting periods and exclude sales fulfilled by distribution centers to independently owned Carquest locations. (2) As reported in the company’s fourth quarter and full year 2023 earnings release, the company corrected non-material errors in certain previously reported financials. All comparisons are based on the corrected historical results as presented in the company’s prior earnings release dated February 29, 2024. View the full article

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Advance’s “Check Your Battery, Not Your Bag” campaign offers free gift cards for road trip essentials and curbside services beginning National Road Trip Day – Friday, May 24 RALEIGH, N.C.--(BUSINESS WIRE)-- Americans seem to be hitting a breaking point with air travel, with 67 percent saying they’ve had a trip negatively impacted or ruined because of problems with air travel during the last 12 months,* according to new data from Atomik Research, released today by Advance Auto Parts (NYSE: AAP), a leading automotive aftermarket parts provider. Advance Auto Parts offers free curbside services including battery testing and installation, wiper blade installation and check engine light scanning, to ensure motorists are ready to roll for their summer road trips. (Photo: Business Wire) From losing precious time – 44 percent citing that delays and other problems traveling by air has cost them vacation time – to safety concerns – 32 percent feeling less safe flying compared to a year ago, Americans are saying “enough!” This summer they’re trading wings for wheels: An astounding 70 percent say they are more likely compared to a year ago to choose traveling by automobile over flying due to the current state of air travel. The “baggage” that comes with air travel continues to stack up and now outweighs the benefit of faster travel time for many Americans, according to the survey. Sixty-six percent say the number of hours they’re willing to drive before choosing to fly has increased in the past 12 months and 24 percent say they would drive 10 or more hours for summer vacation before choosing to fly. Heeding consumers’ preference for summer vacation by automobile, Advance is encouraging travelers to “Check Your Battery, Not Your Bag” so they can achieve what matters most – enjoying their well-deserved summer vacation. Beginning National Road Trip Day this Friday, May 24 through Monday, May 27, participating Advance stores nationwide will surprise randomly selected customers with free Advance gift cards to purchase DieHard® batteries, wiper blades or other road trip essentials, no previous purchase necessary. Complimentary curbside services are available every day throughout the year to customers at all participating Advance stores, including battery checks and installation, wiper blade installation and check engine light scanning. “With all the concern about air travel and more people planning to travel by automobile – including willing to drive longer for their summer vacations – it’s critical they prepare their vehicles, and we want to make that as easy as possible,” said Junior Word, Advance’s executive vice president, U.S. stores. “Safety and reliability are at the center of ease, so our team of automotive experts are offering travelers a one-stop preparation shop – from car care essentials to curbside battery checks and installs on us.” The great majority (85 percent) of survey respondents indicate they will prepare a pre-road trip checklist for their vacation. To further support motorists, Advance is providing “Rules of the Road (Trip)” – a free checklist outlining car preparation basics designed to help both light DIYers and gearheads alike – available on advanceautoparts.com. Check out advanceautoparts.com or visit an Advance Auto Parts retail location to shop for all of the auto parts and products needed to get vehicles road trip ready. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of December 30, 2023, Advance operated 4,786 stores and 321 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,245 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com. * Atomik Research conducted an online survey of 1,002 adult drivers who are considering traveling to their summer-travel destination via air travel or automobile. The margin of error for the overall sample of respondents is +/- 3 percentage points with a confidence level of 95 percent. Fieldwork took place between April 18 and April 19, 2024. View the full article

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RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, will report its first quarter results before the market opens on Wednesday, May 29, 2024. Interested parties can listen to the event via a webcast scheduled to begin at 8:00 a.m. Eastern Time on Wednesday, May 29, 2024. The webcast will be accessible via the company’s Investor Relations website (ir.AdvanceAutoParts.com). To join by phone, please pre-register online for dial-in and passcode information. Upon registering, participants will receive a confirmation with call details and a registrant ID. While registration is open through the live call, the company suggests registering a day in advance or at minimum 10 minutes before the start of the call. A replay of the conference call will be available on the company’s Investor Relations website for one year. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of December 30, 2023, Advance operated 4,786 stores and 321 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,245 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com. View the full article

RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts (NYSE: AAP), a leading automotive aftermarket parts provider, the official auto parts retailer of NASCAR, and official partners of the NTT INDYCAR SERIES and Indianapolis Motor Speedway, is kicking off the summer travel season by offering its Speed Perks loyalty rewards members the chance to win a bucket-list motorsports experience to “Do the Double.” This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240501521239/en/ On May 26, Advance will send one winner and their guest on a free VIP experience to attend the 108th running of the famed Indianapolis 500 before traveling to North Carolina to watch the Coca-Cola 600, one of NASCAR’s crown jewel events, held at Charlotte Motor Speedway. Fans can enter for their chance to Do the Double from May 1-12 at AAPDoTheDouble.com. Race fans can enter up to three times per day during the program. To be eligible to win, entrants must be members of Advance’s Speed Perks loyalty rewards program. Speed Perks is free to join, and upon signing up, new members will receive $5 off their first in-store or online purchase of $20 or more. Race fans can sign up for Speed Perks at AdvanceAutoParts.com. For race car drivers, doing the double involves competing in both the Indianapolis 500 and Coca-Cola 600 in the same day. It is one of the most challenging feats for any race car driver to attempt, given the significant differences between open-wheeled INDYCAR SERIES cars and NASCAR stock cars. In fact, only four drivers have completed the double since 1994. This includes three-time NASCAR Cup Series™ champion Tony Stewart, who won the 1997 INDYCAR SERIES title prior to beginning his hall-of-fame NASCAR career. Stewart is partnering with Advance on AAPDoTheDouble.com and is the perfect ambassador for the program. Stewart has done the double twice. His first attempt came in 1999 when he became the first driver to complete both races in the same day, finishing ninth and fourth, respectively, in the Indianapolis 500 and Coca-Cola 600, driving a total of 1,090 miles. Stewart repeated this feat in 2001 and bettered his mark from 1999. He finished on the lead lap in sixth at the Indianapolis 500 before jetting off to Charlotte for the Coca-Cola 600. He improved that finish as well, coming home third in the 600-miler. Stewart completed all 1,100 miles – breaking his own record for most racing miles driven in a single day. “This is the chance of a lifetime for a fan to also complete the double by having a front-row seat at the Indianapolis 500 and Coca-Cola 600,” Stewart said. “Advance Auto Parts has put together a fantastic program that is truly unique. Doing the double is history in the making and thanks to Advance, a fan and their guest will get to experience it all in real time. They’ll both be able to say, ‘I was there.’” “Historically, doing the double has been a journey reserved for only the world’s most talented and dedicated race car drivers, like Advance brand partner Tony Stewart,” said Junior Word, Advance’s executive vice president, U.S. stores. “Now, one lucky Speed Perks member will have the unique opportunity to ‘get in the driver’s seat’ to experience their own version of the double. Advance is thrilled to work alongside our partners at NASCAR, INDYCAR and Indianapolis Motor Speedway to give two race fans the memory of a lifetime.” About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of December 30, 2023, Advance operated 4,786 stores and 321 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,245 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20240501521239/en/ Investor Relations: Elisabeth Eisleben T: (919) 227-5466 E: [email protected] Media Relations: Darryl Carr T: (984) 389-7207 E: [email protected] View the full article

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Advance Auto Parts Appoints Three New Independent Directors 03/11/2024 Enters into Cooperation Agreement with Third Point LLC and Saddle Point Management L.P. RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, today announced that it has appointed A. Brent Windom, Gregory L. Smith and Thomas W. Seboldt as independent directors to the Advance Auto Parts board, effective immediately. In connection with these appointments, the company has entered into a cooperation agreement with Third Point LLC (together with its affiliates, “Third Point”) and Saddle Point Management, L.P. (together with its affiliates, “Saddle Point”). “We are pleased to welcome Brent, Greg and Tom to the Advance Auto Parts board,” said Gene Lee, independent chair of the board of directors. “These directors’ automotive industry and supply chain experience will help us progress in our plan to return the company to profitable growth. With new management in place, important strategic actions underway, and an enhanced board, we are confident that Advance is on the right path to create significant long-term value for shareholders.” “At Advance, our board prioritizes ongoing refreshment to help ensure we have the right expertise and experience to oversee our strategy while profitably growing our business,” said Shane O'Kelly, president and chief executive officer. “As we continue our operational initiatives focusing on the fundamentals, improving our competitive position, and serving our customers better than anyone else, including through the consolidation of our supply chain to a single unified network, we look forward to benefiting from our new directors’ extensive industry relationships and experience.” “These three directors bring essential operational experience and industry expertise to support Shane as he executes on an ambitious agenda,” said Daniel S. Loeb, chief executive officer of Third Point. “With fresh perspectives in the C-suite and board room and a long runway for growth, we believe Advance is well positioned to create meaningful value for shareholders.” “Advance has enormous potential to deliver better results for customers, suppliers, team members, and shareholders. The company's collaborative and focused approach is a key enabling factor for success," said Roy J. Katzovicz, chief executive officer of Saddle Point Management, L.P. The full cooperation agreement, which contains customary standstill, voting and other provisions, will be filed by the company with the U.S. Securities and Exchange Commission as an exhibit to a Current Report on Form 8-K. Additionally, Legion Partners Holdings, LLC (together with its affiliates, “Legion”), another Advance Auto Parts shareholder, has indicated its support for the additions of Mr. Windom, Mr. Smith and Mr. Seboldt to the company’s board of directors. With the appointments announced today, the company’s board will temporarily expand to 12 directors. At the 2024 annual meeting scheduled for May 22, 2024, 11 director nominees are expected to stand for election to the Advance Auto Parts board, including the three newly appointed directors. Advisors Centerview Partners LLC is acting as financial advisor to Advance Auto Parts and Hogan Lovells US LLP is acting as legal counsel. Willkie Farr & Gallagher LLP is acting as legal counsel to Third Point and Saddle Point, and Proskauer Rose LLP is acting as legal counsel to Saddle Point. About A. Brent Windom Brent Windom, 63, is an experienced automotive industry executive, having spent nearly four decades working in roles across the sector. Most recently, Mr. Windom served as President and Chief Executive Officer of Uni-Select Inc., a leading automotive refinish, industrial coatings and automotive aftermarket parts distributor. Previously, Mr. Windom was President and COO of Canadian Automotive Group from July 2017 to May 2019, as well as president and Chief Executive Officer of Auto Plus ǀ Pep Boys, which was formed following Icahn Enterprises L.P.’s acquisition of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. Prior to joining IEH Auto Parts, Mr. Windom spent 10 years with Uni-Select, where he held positions of increasing responsibility including President and Chief Operating Officer, Uni-Select USA. About Gregory L. Smith Gregory L. Smith, 60, is a proven supply chain expert with nearly 30 years of experience across a variety of industries. Mr. Smith currently serves as Executive Vice President, Global Operation and Supply Chain of Medtronic plc. Prior to joining Medtronic in 2021, Mr. Smith was Executive Vice President, Supply Chain of Walmart Inc. from 2017 to 2021 and Senior Vice President, Global Operations of The Goodyear Tire and Rubber Company from 2011 to 2016. Earlier in his career, Mr. Smith spent a decade with Conagra Foods, Inc., where he served in several leadership positions, including Executive Vice President, Supply Chain. He previously held roles with United Signature Foods LLC and Aurora Foods Inc. About Thomas W. Seboldt Thomas W. Seboldt, 57, is a seasoned automotive executive with over three decades of industry experience. Mr. Seboldt spent the vast majority of his career with O’Reilly Automotive, Inc., where he held several titles of increasing responsibility, including Vice President, Merchandising. Mr. Seboldt has also served on the Board of prominent industry associations including the California Automotive Wholesalers' Association (“CAWA”) and the Auto Care Association. During his tenure on the CAWA Board, Mr. Seboldt has served in a variety of positions, including as President, Vice President, Executive Committee member and Treasurer. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of December 30, 2023, Advance operated 4,786 stores and 321 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,245 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com. Forward-Looking Statements Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about our strategic initiatives, operational plans and objectives, corporate governance, board performance, director nominees at the 2024 annual meeting of stockholders, expectations for economic conditions, future business results and future financial performance, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect our views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, factors related to the company’s leadership transition, the timing and implementation of our initiatives, our potential divestiture of Worldpac and the company's Canada business, our ability to hire, train and retain qualified employees, deterioration of general macroeconomic conditions, the highly competitive nature of our industry, demand for our products and services, complexities in our inventory and supply chain and challenges with transforming and growing our business. Please refer to “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by our subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. View the full article

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Advance Auto Parts Reports Fourth Quarter and Full Year 2023 Results 02/28/2024 RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourself customers, announced its financial results for the fourth quarter and full year ended December 30, 2023. “As we closed out 2023, we continued to act with a sense of urgency to stabilize the business and position the company to return to profitable growth,” said Shane O'Kelly, president and chief executive officer. “Our full year results are well below our expectations, and we are focused on instilling greater discipline and accountability both in the fundamental business and in how the organization executes across the board. In addition to the operational improvements we are implementing, we are strengthening internal controls and enhancing the quality of our accounting information to help better inform how we drive the business forward. “We continue to advance our ongoing operational and strategic review of the business, including the separate sales processes for Worldpac and our Canadian business. We have streamlined and reorganized the company’s leadership structure and have made several important new hires, including the appointments of Ryan Grimsland as Chief Financial Officer and Elizabeth Dreyer as Chief Accounting Officer. Building on the $150 million in annualized SG&A reductions our team executed in the fourth quarter, we recently launched an initiative to eliminate costs related to our indirect spend by an additional $50 million on an annualized basis. We are also moving forward with the consolidation of our supply chain to a single, unified network to create efficiencies and better serve customers. Looking ahead, we are committed to driving enhanced value for shareholders by executing on the fundamentals of our business – focusing on the customer, investing in our frontline and strengthening our competitive position.” Fourth Quarter and Full Year 2023 Results (1) Fourth quarter 2023 Net sales totaled $2.5 billion, a 0.4% decrease compared with the prior year. Comparable store sales for the fourth quarter 2023 decreased 1.4%. For full year 2023, Net sales of $11.3 billion increased 1.2% from 2022. Comparable store sales for the full year decreased 0.3%. The company's Gross profit decreased 11.9% from the fourth quarter of the prior year to $950.8 million or 38.6% of Net sales compared with 43.6% in the prior year quarter. This result reflects both business performance and atypical drivers, primarily attributable to a change in inventory related items and elevated supply chain costs. The company's full year Gross profit was $4.5 billion, or 40.1% of Net sales, representing a 414 basis points decrease from the prior year primarily driven by inventory related items and costs not fully covered by pricing actions. The company's SG&A was $999.4 million in the fourth quarter, or 40.6% of Net sales compared with 38.8% for the prior year quarter. This was primarily driven by a year over year increase in occupancy costs and store labor. The company's full year SG&A was $4.4 billion, or 39.1% of Net sales compared with 38.2% in the prior year. The company's fourth quarter Operating loss was $48.6 million, or (2.0)% of Net sales compared with the fourth quarter of the prior year Operating income of $119.3 million or 4.8% of Net sales. The company's full year Operating income was $114.4 million, or 1.0% of Net sales, compared with $670.3 million, or 6.0% of Net sales, in the prior year. The company's effective tax rate in the fourth quarter of 2023 was 42.3%. The company's Diluted loss per share was $0.59 compared with Diluted earnings per share of $1.39 in the fourth quarter of the prior year. The company's effective tax rate for full year 2023 was 6.6%. The company's 2023 Diluted earnings per share was $0.50 compared with $7.65 in the prior year. Net cash provided by operating activities was $0.3 billion for the full year 2023 versus $0.7 billion for the prior year. The decrease was primarily driven by lower Net income and working capital. Free cash flow for the full year 2023 was $43.7 million, compared with $312.5 million for the prior year. During management’s review, the company identified issues with certain previously reported financials. All comparisons are based on the corrected historical results as depicted in the financial tables herein, which include the correction of non-material errors in previously reported results. The company filed a Form 12b-25 with the Securities and Exchange Commission and disclosed that it expects to file its Form 10-K prior to the expiration of the extension period. (1) All comparisons are based on the same time period in the prior year. Comparable store sales include locations open for 13 complete accounting periods and excludes sales to independently owned Carquest locations. Capital Allocation On February 13, 2024, the company declared a regular cash dividend of $0.25 per share to be paid on April 26, 2024 to all common stockholders of record as of April 12, 2024. Subsequent Events On February 26, 2024, the company entered into an amendment to its revolving credit facility to enable certain addbacks to financial covenants for specific write-downs of inventory and vendor receivables. As of December 30, 2023, considering the amendment, the company was in compliance with the credit facility’s financial covenants. Full Year 2024 Guidance (1) "In 2024, we are refining our operational improvement plans and building on the decisive actions we have taken to turn around the company’s performance. We are committed to improving overall productivity and taking a disciplined approach to reducing expenses, which will support our focus on investing in our team members. Our 2024 full year guidance is reflective of the steps we must take to reset the business and solidify our foundation for the long term," said Ryan Grimsland, executive vice president and chief financial officer. View the full article

Advance Auto Parts Announces Date for Its Fourth Quarter and Full Year 2023 Earnings Release and Conference Call 02/14/2024 RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, will report its fourth quarter and full year 2023 results before the market opens on Wednesday, February 28, 2024. Interested parties can listen to the event via a webcast scheduled to begin at 8:00 a.m. Eastern Time on Wednesday, February 28, 2024. The webcast will be accessible via the company’s Investor Relations website (ir.AdvanceAutoParts.com). To join by phone, please pre-register online for dial-in and passcode information. Upon registering, participants will receive a confirmation with call details and a registrant ID. While registration is open through the live call, the company suggests registering a day in advance or at minimum 10 minutes before the start of the call. A replay of the conference call will be available on the company’s Investor Relations website for one year. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of October 7, 2023 Advance operated 4,785 stores and 320 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,307 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20240214110163/en/ Investor Relations Contact: Elisabeth Eisleben T: (919) 227-5466 E: [email protected] Media Contact: Darryl Carr T: (984) 389-7207 E: [email protected] Source: Advance Auto Parts, Inc. View the full article