Advance Auto Parts Reports Fourth Quarter and Full Year 2024 Results
Advance Auto Parts (NYSE: AAP) reported Q4 and full year 2024 results, showing challenging performance metrics. Q4 net sales decreased 0.9% to $2.0 billion, with comparable store sales declining 1.0%. The company reported a Q4 operating loss of $820.0 million and adjusted loss per share of $1.18.
Full year 2024 results included net sales of $9.1 billion (down 1.2% YoY), with comparable store sales decreasing 0.7%. The company reported a full-year operating loss of $713.3 million and adjusted loss per share of $0.29.
The company announced a strategic restructuring plan including: closure of over 500 corporate locations, consolidation to 12 large distribution centers by end-2026, opening of 60 market hub locations by mid-2027, and focus on merchandising excellence. AAP declared a quarterly dividend of $0.25 per share, payable April 25, 2025.
Advance Auto Parts (NYSE: AAP) ha riportato i risultati del quarto trimestre e dell'intero anno 2024, evidenziando metriche di performance sfidanti. Le vendite nette del quarto trimestre sono diminuite dello 0,9% a 2,0 miliardi di dollari, con vendite comparabili nei negozi in calo dell'1,0%. L'azienda ha registrato una perdita operativa nel quarto trimestre di 820,0 milioni di dollari e una perdita rettificata per azione di 1,18 dollari.
I risultati per l'anno intero 2024 hanno incluso vendite nette di 9,1 miliardi di dollari (in calo dell'1,2% rispetto all'anno precedente), con vendite comparabili nei negozi in diminuzione dello 0,7%. L'azienda ha riportato una perdita operativa annuale di 713,3 milioni di dollari e una perdita rettificata per azione di 0,29 dollari.
L'azienda ha annunciato un piano di ristrutturazione strategica che include: la chiusura di oltre 500 sedi aziendali, la consolidazione in 12 grandi centri di distribuzione entro la fine del 2026, l'apertura di 60 sedi di hub di mercato entro metà 2027 e un focus sull'eccellenza nel merchandising. AAP ha dichiarato un dividendo trimestrale di 0,25 dollari per azione, pagabile il 25 aprile 2025.
Advance Auto Parts (NYSE: AAP) reportó los resultados del cuarto trimestre y del año completo 2024, mostrando métricas de rendimiento desafiantes. Las ventas netas del cuarto trimestre disminuyeron un 0.9% a 2.0 mil millones de dólares, con las ventas comparables en tiendas cayendo un 1.0%. La empresa reportó una pérdida operativa en el cuarto trimestre de 820.0 millones de dólares y una pérdida ajustada por acción de 1.18 dólares.
Los resultados del año completo 2024 incluyeron ventas netas de 9.1 mil millones de dólares (una disminución del 1.2% interanual), con ventas comparables en tiendas disminuyendo un 0.7%. La empresa reportó una pérdida operativa anual de 713.3 millones de dólares y una pérdida ajustada por acción de 0.29 dólares.
La empresa anunció un plan de reestructuración estratégica que incluye: el cierre de más de 500 ubicaciones corporativas, la consolidación en 12 grandes centros de distribución para finales de 2026, la apertura de 60 ubicaciones de hubs de mercado para mediados de 2027, y un enfoque en la excelencia en merchandising. AAP declaró un dividendo trimestral de 0.25 dólares por acción, pagadero el 25 de abril de 2025.
Advance Auto Parts (NYSE: AAP)는 2024년 4분기 및 연간 실적을 발표하며 도전적인 성과 지표를 보여주었습니다. 4분기 순매출은 20억 달러로 0.9% 감소했으며, 비교 가능한 매장 매출은 1.0% 감소했습니다. 회사는 4분기 운영 손실이 8억 2천만 달러이며, 조정 주당 손실이 1.18달러라고 보고했습니다.
2024년 전체 연간 실적은 순매출 91억 달러(전년 대비 1.2% 감소)를 포함하고 있으며, 비교 가능한 매장 매출은 0.7% 감소했습니다. 회사는 연간 운영 손실이 7억 1천3백만 달러이며, 조정 주당 손실이 0.29달러라고 보고했습니다.
회사는 2026년 말까지 500개 이상의 법인 위치를 폐쇄하고, 2027년 중반까지 60개의 시장 허브 위치를 열며, 12개의 대형 유통 센터로 통합하는 전략적 재구성 계획을 발표했습니다. AAP는 주당 0.25달러의 분기 배당금을 선언했으며, 이는 2025년 4월 25일에 지급될 예정입니다.
Advance Auto Parts (NYSE: AAP) a annoncé les résultats du quatrième trimestre et de l'année entière 2024, montrant des indicateurs de performance difficiles. Les ventes nettes du quatrième trimestre ont diminué de 0,9 % pour atteindre 2,0 milliards de dollars, avec des ventes comparables en magasin en baisse de 1,0 %. L'entreprise a déclaré une perte opérationnelle de 820,0 millions de dollars pour le quatrième trimestre et une perte ajustée par action de 1,18 dollar.
Les résultats de l'année entière 2024 incluaient des ventes nettes de 9,1 milliards de dollars (en baisse de 1,2 % par rapport à l'année précédente), avec des ventes comparables en magasin diminuant de 0,7 %. L'entreprise a déclaré une perte opérationnelle annuelle de 713,3 millions de dollars et une perte ajustée par action de 0,29 dollar.
L'entreprise a annoncé un plan de restructuration stratégique comprenant : la fermeture de plus de 500 sites d'entreprise, la consolidation en 12 grands centres de distribution d'ici fin 2026, l'ouverture de 60 sites de hubs de marché d'ici mi-2027, et un accent sur l'excellence en merchandising. AAP a déclaré un dividende trimestriel de 0,25 dollar par action, payable le 25 avril 2025.
Advance Auto Parts (NYSE: AAP) hat die Ergebnisse für das vierte Quartal und das gesamte Jahr 2024 veröffentlicht, die herausfordernde Leistungskennzahlen zeigen. Der Nettoumsatz im vierten Quartal sank um 0,9 % auf 2,0 Milliarden Dollar, während die vergleichbaren Filialumsätze um 1,0 % zurückgingen. Das Unternehmen berichtete von einem operativen Verlust im vierten Quartal in Höhe von 820,0 Millionen Dollar und einem bereinigten Verlust pro Aktie von 1,18 Dollar.
Die Ergebnisse für das gesamte Jahr 2024 umfassten Nettoumsätze von 9,1 Milliarden Dollar (ein Rückgang um 1,2 % im Vergleich zum Vorjahr), wobei die vergleichbaren Filialumsätze um 0,7 % zurückgingen. Das Unternehmen meldete einen operativen Verlust von 713,3 Millionen Dollar für das gesamte Jahr und einen bereinigten Verlust pro Aktie von 0,29 Dollar.
Das Unternehmen kündigte einen strategischen Restrukturierungsplan an, der Folgendes umfasst: die Schließung von über 500 Unternehmensstandorten, die Konsolidierung in 12 große Vertriebszentren bis Ende 2026, die Eröffnung von 60 Markt-Hub-Standorten bis Mitte 2027 und den Fokus auf Merchandising-Exzellenz. AAP erklärte eine vierteljährliche Dividende von 0,25 Dollar pro Aktie, die am 25. April 2025 zahlbar ist.
- Strong liquidity position maintained
- Strategic restructuring plan in place for efficiency
- Gross margin improvement in full-year results
- Dividend maintained at $0.25 per share
- Q4 net sales declined 0.9% to $2.0B
- Q4 operating loss of $820.0M
- Full-year operating loss of $713.3M
- Comparable store sales decreased 1.0% in Q4
- Adjusted Q4 loss per share widened to $1.18 from $0.45 YoY
- Free cash flow negative at -$40.3M for 2024
Insights
Advance Auto Parts (AAP) reported concerning Q4 and full-year 2024 results that reveal significant challenges in its turnaround efforts. Q4 comparable store sales declined 1.0% while the adjusted operating loss more than tripled to
Full-year performance shows AAP falling further behind industry peers, with adjusted operating income plummeting to just
Management's radical restructuring plan—closing over 500 corporate locations while maintaining the
The maintained FY2027 target of
Advance Auto Parts' Q4 and full-year 2024 results reveal a company undertaking radical surgery to address persistent operational deficiencies. The decision to close over 500 corporate locations—representing approximately 10-15% of AAP's network—acknowledges that the current footprint cannot generate acceptable returns, particularly given the
The
The supply chain consolidation to just 12 distribution centers represents one of the most ambitious network redesigns in specialty retail. While this could eventually improve parts availability and reduce costs, the transition period creates significant execution risk. The planned 60 market hubs by mid-2027 suggests a hub-and-spoke model that requires precise coordination to prevent further disruption to an already struggling operation.
Most concerning is that despite
The
"During 2024, we initiated transformative actions to reposition Advance for long-term success and value creation,” said Shane O'Kelly, president and chief executive officer. "We strengthened our focus on the blended-box by divesting non-core assets, closing non-strategic stores and right-sizing our organization. Our supply chain and merchandising teams are accelerating efforts to provide faster access to thousands of parts across our network. From a team perspective, we deployed additional resources to support our frontline team members and our customers. Additionally, we augmented our leadership team with talented executives that bring knowledge of core retail fundamentals."
"We ended 2024 with a healthy balance sheet and strong liquidity to navigate our turnaround. The team is acutely focused on execution and driving stronger accountability. We remain committed to delivering an improved operating performance in 2025 and making progress toward our FY27 goal of achieving an adjusted operating margin of approximately
Fourth Quarter 2024 Results (1,2,3)
Fourth quarter 2024 net sales totaled
The company's fourth quarter 2024 gross profit was
The company's fourth quarter 2024 SG&A was
The company's fourth quarter operating loss was
The company's effective tax rate in the fourth quarter of 2024 was
_____________________________ (1) All comparisons are based on the same time period in the prior year. 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. Closed stores and stores in process of closing under the restructuring plan are not included in the comparable store sales calculation. |
Full Year 2024 Results (1,2,3)
Full year 2024, net sales totaled
The company's full year 2024 gross profit was
The company's full year 2024 SG&A was
The company's full year 2024 operating loss was
The company's effective tax rate for full year 2024 was
Net cash provided by operating activities was
Capital Allocation
On February 11, 2025, the company declared a regular cash dividend of
__________________________ |
(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. Closed stores and stores in process of closing under the restructuring plan are not included in the comparable store sales calculation. |
(3) 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. |
Strategic Priorities and Financial Objectives (FY25 through FY27)
The company is executing a strategic plan to improve business performance with a focus on core retail improvements. This plan is anchored on three pillars outlined below to put the company on the path to deliver consistent profitable growth.
-
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 12 large facilities by end-2026.
- Opening of 60 market hub locations by mid-2027.
- Optimization of transportation routes and freight to lower costs and improve productivity.
-
Store operations
- Standardization of store operating model.
- Improving labor productivity.
- Accelerate pace of new store openings.
Full Year 2025 Guidance (53 weeks)
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As of February 26, 2025 |
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($ in millions, except per share data) |
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Low |
|
High |
Net sales from continuing operations (1) |
|
|
|
|
Comparable store sales (52 weeks) (2) |
|
|
|
|
New store growth |
|
30 new stores |
||
Adjusted operating income margin from continuing operations (4) |
|
|
|
|
Adjusted diluted EPS from continuing operations (3,4) |
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|
|
|
Capital expenditures |
|
Approx. |
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Free cash flow (4) |
|
|
|
|
(1) Includes approximately |
(2) 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. Closed stores and stores in process of closing under the restructuring plan are not included in the comparable store sales calculation. |
(3) Includes approximately |
(4) 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. |
First Quarter 2025 Expectations
We are providing select first quarter 2025 expectations, which include the impact of transitory costs associated with closure of stores and DC locations.
($ in millions) |
|
As of February 26, 2025 |
Net sales from continuing operations |
|
Approx. |
Comparable store sales |
|
Decline approx. |
Adjusted operating income margin from continuing operations |
|
Approx. (2.00)% |
Full Year 2027 Objectives (1)
Our full year 2027 financial objectives are unchanged
|
|
|
Net sales ($ in millions) |
|
Approx. |
Comparable store sales |
|
Positive low-single-digit % |
New store growth |
|
50 to 70 new stores |
Adjusted operating income margin (1) |
|
Approx. |
Leverage ratio (Adj. debt/ Adj. EBITDAR) (1) |
|
Approx. 2.5x |
(1) Adjusted operating income margin is based on performance of Advance continuing operations. 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 fourth quarter and full year 2024 via a webcast scheduled to begin at 8 a.m. Eastern Time on Wednesday, February 26, 2025. 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 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 28, 2024, Advance operated 4,788 stores primarily within
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 including increased tariffs and trade restrictions, the highly competitive nature of the industry, demand for the Company’s products and services, 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 |
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Condensed Consolidated Balance Sheets |
||||||
(in thousands), (unaudited) |
||||||
Assets |
|
December 28, 2024 (1) |
|
December 30, 2023 (1) |
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,869,417 |
|
$ |
488,049 |
Receivables, net |
|
|
544,040 |
|
|
609,528 |
Inventories |
|
|
3,612,081 |
|
|
3,893,569 |
Other current assets |
|
|
118,002 |
|
|
180,402 |
Current assets held for sale |
|
|
— |
|
|
1,205,473 |
Total current assets |
|
|
6,143,540 |
|
|
6,377,021 |
Property and equipment, net |
|
|
1,334,338 |
|
|
1,555,985 |
Operating lease right-of-use assets |
|
|
2,242,602 |
|
|
2,347,073 |
Goodwill |
|
|
598,217 |
|
|
601,159 |
Other intangible assets, net |
|
|
405,751 |
|
|
419,161 |
Other noncurrent assets |
|
|
73,661 |
|
|
85,988 |
Noncurrent assets held for sale |
|
|
— |
|
|
889,939 |
Total assets |
|
$ |
10,798,109 |
|
$ |
12,276,326 |
|
|
|
|
|
||
Liabilities and Stockholders’ Equity |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
$ |
3,407,889 |
|
$ |
3,526,079 |
Accrued expenses |
|
|
784,635 |
|
|
616,067 |
Other current liabilities |
|
|
472,833 |
|
|
396,408 |
Current liabilities held for sale |
|
|
— |
|
|
768,851 |
Total current liabilities |
|
|
4,665,357 |
|
|
5,307,405 |
Long-term debt |
|
|
1,789,161 |
|
|
1,786,361 |
Non-current operating lease liabilities |
|
|
1,897,165 |
|
|
2,039,908 |
Deferred income taxes |
|
|
192,671 |
|
|
355,635 |
Other long-term liabilities |
|
|
83,813 |
|
|
83,538 |
Noncurrent liabilities held for sale |
|
|
— |
|
|
183,751 |
Total liabilities |
|
|
8,628,167 |
|
|
9,756,598 |
Total stockholders’ equity |
|
|
2,169,942 |
|
|
2,519,728 |
Total liabilities and stockholders’ equity |
|
$ |
10,798,109 |
|
$ |
12,276,326 |
(1) |
This condensed consolidated balance sheet has been prepared on a basis consistent with the company's previously prepared balance sheets filed with the Securities and Exchange Commission ("SEC"), but does not include the footnotes required by accounting principles generally accepted in |
Advance Auto Parts, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Operations |
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(in thousands, except per share data), (unaudited) |
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|
|
Twelve Weeks
|
|
Twelve Weeks
|
|
Fifty-Two Weeks
|
|
Fifty-Two Weeks
|
||||||||
|
|
December 28,
|
|
December 30,
|
|
December 28,
|
|
December 30,
|
||||||||
Net sales |
|
$ |
1,996,025 |
|
|
$ |
2,014,405 |
|
|
$ |
9,094,327 |
|
|
$ |
9,209,075 |
|
Cost of sales |
|
|
1,648,908 |
|
|
|
1,194,776 |
|
|
|
5,685,807 |
|
|
|
5,348,966 |
|
Gross profit |
|
|
347,117 |
|
|
|
819,629 |
|
|
|
3,408,520 |
|
|
|
3,860,109 |
|
Selling, general and administrative expenses, exclusive of restructuring and related expenses |
|
|
879,021 |
|
|
|
851,676 |
|
|
|
3,812,924 |
|
|
|
3,805,235 |
|
Restructuring and related expenses |
|
|
288,098 |
|
|
|
10,308 |
|
|
|
308,902 |
|
|
|
15,987 |
|
Selling, general and administrative expenses |
|
|
1,167,119 |
|
|
|
861,984 |
|
|
|
4,121,826 |
|
|
|
3,821,222 |
|
Operating (loss) income |
|
|
(820,002 |
) |
|
|
(42,355 |
) |
|
|
(713,306 |
) |
|
|
38,887 |
|
Other, net: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
(18,906 |
) |
|
|
(18,041 |
) |
|
|
(81,033 |
) |
|
|
(87,989 |
) |
Other income, net |
|
|
13,471 |
|
|
|
1,692 |
|
|
|
26,241 |
|
|
|
1,924 |
|
Total other, net |
|
|
(5,435 |
) |
|
|
(16,349 |
) |
|
|
(54,792 |
) |
|
|
(86,065 |
) |
Loss before provision for income taxes |
|
|
(825,437 |
) |
|
|
(58,704 |
) |
|
|
(768,098 |
) |
|
|
(47,178 |
) |
Provision for income taxes |
|
|
(215,906 |
) |
|
|
(23,514 |
) |
|
|
(181,143 |
) |
|
|
(17,154 |
) |
Net loss from continuing operations |
|
|
(609,531 |
) |
|
|
(35,190 |
) |
|
|
(586,955 |
) |
|
|
(30,024 |
) |
Net income from discontinued operations |
|
|
194,754 |
|
|
|
62 |
|
|
|
251,167 |
|
|
|
59,759 |
|
Net (loss) income |
|
$ |
(414,777 |
) |
|
$ |
(35,128 |
) |
|
$ |
(335,788 |
) |
|
$ |
29,735 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic loss per common share from continuing operations |
|
$ |
(10.20 |
) |
|
$ |
(0.59 |
) |
|
$ |
(9.84 |
) |
|
$ |
(0.51 |
) |
Basic earnings per common share from discontinued operations |
|
|
3.26 |
|
|
|
— |
|
|
|
4.21 |
|
|
|
1.01 |
|
Basic (loss) earnings per common share |
|
$ |
(6.94 |
) |
|
$ |
(0.59 |
) |
|
$ |
(5.63 |
) |
|
$ |
0.50 |
|
Basic weighted-average common shares outstanding |
|
|
59,743 |
|
|
|
59,504 |
|
|
|
59,647 |
|
|
|
59,432 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted loss per common share from continuing operations |
|
$ |
(10.16 |
) |
|
$ |
(0.59 |
) |
|
$ |
(9.80 |
) |
|
$ |
(0.50 |
) |
Diluted earnings per common share from discontinued operations |
|
|
3.24 |
|
|
|
— |
|
|
|
4.19 |
|
|
|
1.00 |
|
Diluted (loss) earnings per common share |
|
$ |
(6.92 |
) |
|
$ |
(0.59 |
) |
|
$ |
(5.61 |
) |
|
$ |
0.50 |
|
Diluted weighted-average common shares outstanding |
|
|
59,978 |
|
|
|
59,675 |
|
|
|
59,902 |
|
|
|
59,608 |
|
(1) |
These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with the company's previously prepared statements of operations filed with the SEC, but do not include the footnotes required by GAAP. |
Advance Auto Parts, Inc. and Subsidiaries |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(in thousands), (unaudited) |
||||||||
|
|
Fifty-Two Weeks Ended |
||||||
|
|
December 28,
|
|
December 30,
|
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net (loss) income |
|
$ |
(335,788 |
) |
|
$ |
29,735 |
|
Net income from discontinued operations |
|
|
251,167 |
|
|
|
59,759 |
|
Net (loss) income from continuing operations |
|
|
(586,955 |
) |
|
|
(30,024 |
) |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
291,980 |
|
|
|
269,430 |
|
Share-based compensation |
|
|
42,193 |
|
|
|
40,905 |
|
Write-down on receivables |
|
|
34,176 |
|
|
|
— |
|
Loss on sale and impairment of long-lived assets |
|
|
157,957 |
|
|
|
857 |
|
Provision for deferred income taxes |
|
|
(203,276 |
) |
|
|
(37,175 |
) |
Other, net |
|
|
3,968 |
|
|
|
3,267 |
|
Net change in: |
|
|
|
|
||||
Receivables, net |
|
|
28,952 |
|
|
|
(114,745 |
) |
Inventories |
|
|
270,403 |
|
|
|
(64,146 |
) |
Accounts payable |
|
|
(110,112 |
) |
|
|
57,518 |
|
Accrued expenses |
|
|
126,588 |
|
|
|
94,698 |
|
Other assets and liabilities, net |
|
|
84,630 |
|
|
|
(78,797 |
) |
Net cash provided by operating activities from continuing operations |
|
|
140,504 |
|
|
|
141,788 |
|
Net cash (used in) provided by operating activities from discontinued operations |
|
|
(55,871 |
) |
|
|
145,587 |
|
Net cash provided by operating activities |
|
|
84,633 |
|
|
|
287,375 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(180,800 |
) |
|
|
(225,672 |
) |
Proceeds from sales of property and equipment |
|
|
13,394 |
|
|
|
6,922 |
|
Net cash used in investing activities from continuing operations |
|
|
(167,406 |
) |
|
|
(218,750 |
) |
Net cash provided by (used in) investing activities from discontinued operations |
|
|
1,522,160 |
|
|
|
(16,739 |
) |
Net cash provided by (used in) investing activities |
|
|
1,354,754 |
|
|
|
(235,489 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings under credit facilities |
|
|
— |
|
|
|
4,805,000 |
|
Payments on credit facilities |
|
|
— |
|
|
|
(4,990,000 |
) |
Proceeds from issuance of senior unsecured notes, net |
|
|
— |
|
|
|
599,571 |
|
Dividends paid |
|
|
(59,855 |
) |
|
|
(209,293 |
) |
Purchase of noncontrolling interests |
|
|
(9,101 |
) |
|
|
— |
|
Repurchases of common stock |
|
|
(6,501 |
) |
|
|
(14,518 |
) |
Other, net |
|
|
447 |
|
|
|
(1,493 |
) |
Net cash (used in) provided by financing activities |
|
|
(75,010 |
) |
|
|
189,267 |
|
Effect of exchange rate changes on cash |
|
|
1,569 |
|
|
|
(8,487 |
) |
Net increase in cash and cash equivalents |
|
|
1,365,946 |
|
|
|
232,666 |
|
Cash and cash equivalents, beginning of period |
|
|
503,471 |
|
|
|
270,805 |
|
Cash and cash equivalents, end of period |
|
$ |
1,869,417 |
|
|
$ |
503,471 |
|
|
|
|
|
|
||||
Summary of cash and cash equivalents: |
|
|
|
|
||||
Cash and cash equivalents of continuing operations, end of period |
|
$ |
1,869,417 |
|
|
$ |
488,049 |
|
Cash and cash equivalents of discontinued operations, end of period |
|
|
— |
|
|
|
15,422 |
|
Cash and cash equivalents, end of period |
|
$ |
1,869,417 |
|
|
$ |
503,471 |
|
|
|
|
|
|
||||
Advance Auto Parts, Inc. and Subsidiaries |
||||||||
Condensed Consolidated Statements of Cash Flows (continued) |
||||||||
(in thousands), (unaudited) |
||||||||
|
|
Fifty-Two Weeks Ended |
||||||
|
|
December 28,
|
|
December 30,
|
||||
Supplemental cash flow information: |
|
|
|
|
||||
Interest paid |
|
$ |
75,740 |
|
|
$ |
73,844 |
|
Income tax payments |
|
$ |
37,037 |
|
|
$ |
98,792 |
|
|
|
|
|
|
||||
Non-cash transactions: |
|
|
|
|
||||
Accrued purchases of property and equipment |
|
$ |
14,841 |
|
|
$ |
5,287 |
|
Transfer of property and equipment from (to) assets related to discontinued operations to (from) continuing operations |
|
$ |
7,262 |
|
|
$ |
(1,666 |
) |
(1) |
This condensed consolidated statement of cash flows has been prepared on a basis consistent with the company's previously prepared statements of operations filed with the SEC, but does not include the footnotes required by GAAP. |
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
2024 Restructuring Plan
On November 13, 2024, the company’s Board of Directors approved a restructuring and asset optimization plan (“2024 Restructuring Plan”) designed to improve the Company’s profitability and growth potential and streamline its operations. This plan anticipates closure of approximately 500 stores, approximately 200 independent locations and four distribution centers by mid-2025, as well as headcount reductions.
Other Restructuring Initiatives
In November 2023, the company announced a strategic and operational plan which would result in
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 expenses 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 — Expenses incurred in connection with the Company's turnaround plans and specific transformative activities related to asset optimization that the Company does not view to be normal cash operating expenses. These expenses primarily include:
- Restructuring and other related expenses — Expenses relating to strategic initiatives, including severance expense, retention bonuses offered to store-level employees to help facilitate the closing of stores, incremental reserves related to the collectibility of receivables resulting from contract terminations with certain independents associated with the 2024 Restructuring Plan and third-party professionals assisting in the development and execution of the strategic initiatives.
- Inventory write-down — Expenses relating to the incremental write-down of inventory to net realizable value due to liquidation sales and streamlining inventory assortment due to store and distribution center closures associated with the 2024 Restructuring Plan.
- Impairment and write-down of long-lived assets - Expenses relating to the impairment of operating lease ROU assets and property and equipment, incremental depreciation as a result of accelerating long-lived assets over a shorter useful life, and incremental lease abandonment expenses as a result of accelerating ROU asset amortization for leases the Company expects to exit before the end of the contractual term, net of gains on lease terminations, in connection with the 2024 Restructuring Plan and Other Restructuring Plan.
- Distribution network optimization — Expenses primarily relating to the conversion of the stores and distribution centers to market hubs, including temporary labor, incremental depreciation as a result of accelerating long-lived assets over a shorter useful life, nonrecurring professional service fees and team member severance.
Other Expenses — Expenses 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. These expenses primarily include:
- Other professional service fees — Expenses relating to nonrecurring services rendered by third-party vendors engaged to perform a strategic business review, including the Company’s transformation initiatives.
- Worldpac post transaction-related expenses — Expenses primarily relating to non-recurring separation activities provided by third-party professionals subsequent to the sale of Worldpac.
- Executive turnover — Expenses associated with the hiring search for leadership positions and compensation.
- Material weakness remediation — Incremental expenses associated with the remediation of the Company’s previously-disclosed material weaknesses in internal control over financial reporting.
- Cybersecurity incident— Expenses related to the response and remediation of a cybersecurity incident.
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 |
Fifty-Two Weeks Ended |
||||||||||
(in thousands, except per share data) |
December 28,
|
December 30,
|
December 28,
|
December 30,
|
||||||||
Net loss from continuing operations (GAAP) |
$ |
(609,531 |
) |
$ |
(35,190 |
) |
$ |
(586,955 |
) |
$ |
(30,024 |
) |
Cost of sales adjustments: |
|
|
|
|
||||||||
Transformation expenses: |
|
|
|
|
||||||||
Inventory write-down |
|
431,529 |
|
|
— |
|
|
431,529 |
|
|
— |
|
Selling, general and administrative adjustments: |
|
|
|
|
||||||||
Transformation expenses: |
|
|
|
|
||||||||
Restructuring and other related expenses (1) |
|
60,682 |
|
|
7,516 |
|
|
60,682 |
|
|
7,835 |
|
Impairment and write-down of long-lived assets (2) |
|
204,156 |
|
|
— |
|
|
204,156 |
|
|
— |
|
Distribution network optimization (3) |
|
5,769 |
|
|
— |
|
|
19,713 |
|
|
— |
|
Other expenses: |
|
|
|
|
||||||||
Other professional service fees |
|
10,233 |
|
|
— |
|
|
15,533 |
|
|
— |
|
Worldpac post transaction-related expenses |
|
7,258 |
|
|
— |
|
|
7,258 |
|
|
— |
|
Executive turnover |
|
— |
|
|
2,792 |
|
|
1,561 |
|
|
8,152 |
|
Material weakness remediation |
|
930 |
|
|
1,009 |
|
|
4,579 |
|
|
1,438 |
|
Cybersecurity incident |
|
— |
|
|
— |
|
|
3,491 |
|
|
— |
|
Other income adjustments: |
|
|
|
|
||||||||
TSA services |
|
(2,537 |
) |
|
— |
|
|
(2,537 |
) |
|
— |
|
Provision for income taxes on adjustments (4) |
|
(179,505 |
) |
|
(2,829 |
) |
|
(186,491 |
) |
|
(4,356 |
) |
Nonrecurring tax expense (5) |
|
— |
|
|
— |
|
|
10,000 |
|
|
— |
|
Adjusted net loss (Non-GAAP) |
$ |
(71,016 |
) |
$ |
(26,702 |
) |
$ |
(17,481 |
) |
$ |
(16,955 |
) |
|
|
|
|
|
||||||||
Diluted loss per share from continuing operations (GAAP) |
$ |
(10.16 |
) |
$ |
(0.59 |
) |
$ |
(9.80 |
) |
$ |
(0.50 |
) |
Adjustments, net of tax |
|
8.98 |
|
|
0.14 |
|
|
9.51 |
|
|
0.22 |
|
Adjusted loss per share from continuing operations (Non-GAAP) |
$ |
(1.18 |
) |
$ |
(0.45 |
) |
$ |
(0.29 |
) |
$ |
(0.28 |
) |
(1) Restructuring and other related expenses included transactional expenses due to incremental receivable reserves resulting from contract terminations with certain independents as part of the 2024 Restructuring Plan of
(2) During the fifty-two weeks ended December 28, 2024, the Company recorded impairment charges for ROU assets and property and equipment of
(3) Distribution network optimization includes incremental depreciation as a result of accelerating long-lived assets over a shorter useful life of (4) The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustments. (5) 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. |
||||||||||||
Reconciliation of Gross Profit
|
Twelve Weeks Ended |
Fifty-Two Weeks Ended |
||||||
(in thousands) |
December 28,
|
December 30,
|
December 28,
|
December 30,
|
||||
Gross Profit (GAAP) |
$ |
347,117 |
$ |
819,629 |
$ |
3,408,520 |
$ |
3,860,109 |
Gross Profit adjustments |
|
431,529 |
|
— |
|
431,529 |
|
— |
Adjusted Gross Profit (Non-GAAP) |
$ |
778,646 |
$ |
819,629 |
$ |
3,840,049 |
$ |
3,860,109 |
Reconciliation of Adjusted Selling, General and Administrative Expenses
|
Twelve Weeks Ended |
Fifty-Two Weeks Ended |
||||||
(in thousands) |
December 28,
|
December 30,
|
December 28,
|
December 30,
|
||||
SG&A (GAAP) |
$ |
1,167,119 |
$ |
861,984 |
$ |
4,121,826 |
$ |
3,821,222 |
SG&A adjustments |
|
289,028 |
|
11,317 |
|
316,973 |
|
17,425 |
Adjusted SG&A (Non-GAAP) |
$ |
878,091 |
$ |
850,667 |
$ |
3,804,853 |
$ |
3,803,797 |
Reconciliation of Adjusted Operating Income:
|
Twelve Weeks Ended |
Fifty-Two Weeks Ended |
|||||||||
(in thousands) |
December 28,
|
December 30,
|
December 28,
|
December 30,
|
|||||||
Operating (loss) income (GAAP) |
$ |
(820,002 |
) |
$ |
(42,355 |
) |
$ |
(713,306 |
) |
$ |
38,887 |
COGS adjustments |
|
431,529 |
|
|
— |
|
|
431,529 |
|
|
— |
SG&A adjustments |
|
289,028 |
|
|
11,317 |
|
|
316,973 |
|
|
17,425 |
Adjusted operating (loss) income (Non-GAAP) |
$ |
(99,445 |
) |
$ |
(31,038 |
) |
$ |
35,196 |
|
$ |
56,312 |
NOTE: Adjusted gross profit, Adjusted gross margin (calculated by dividing Adjusted gross profit by Net sales), 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: |
|
|
|
|
||||
|
|
Fifty-Two Weeks Ended |
||||||
(in thousands) |
|
December 28,
|
|
December 30,
|
||||
Cash flows from operating activities |
|
$ |
140,504 |
|
|
$ |
141,788 |
|
Purchases of property and equipment |
|
|
(180,800 |
) |
|
|
(225,672 |
) |
Free cash flow |
|
$ |
(40,296 |
) |
|
$ |
(83,884 |
) |
Adjusted Debt to Adjusted EBITDAR Ratio: (1) |
|
|
|
|
||||
|
|
Four Quarters Ended |
||||||
(in thousands, except adjusted debt to adjusted EBITDAR ratio) |
|
December 28,
|
|
December 30,
|
||||
Total GAAP debt |
|
$ |
1,789,161 |
|
|
$ |
1,786,361 |
|
Add: Operating lease liabilities |
|
|
2,358,693 |
|
|
|
2,423,183 |
|
Adjusted debt |
|
$ |
4,147,854 |
|
|
$ |
4,209,544 |
|
|
|
|
|
|
||||
GAAP Net income |
|
$ |
(586,955 |
) |
|
$ |
(30,024 |
) |
Depreciation and amortization |
|
|
291,980 |
|
|
|
269,430 |
|
Interest expense |
|
|
81,033 |
|
|
|
87,989 |
|
Other income, net |
|
|
(26,242 |
) |
|
|
(1,924 |
) |
Provision for income taxes |
|
|
(181,143 |
) |
|
|
(17,154 |
) |
Rent expense |
|
|
587,845 |
|
|
|
533,693 |
|
Share-based compensation |
|
|
44,596 |
|
|
|
45,647 |
|
Other nonrecurring charges (2) |
|
|
27,179 |
|
|
|
12,419 |
|
Transformation related charges (3) |
|
|
742,458 |
|
|
|
29,719 |
|
Adjusted EBITDAR |
|
$ |
980,751 |
|
|
$ |
929,795 |
|
|
|
|
|
|
||||
Adjusted debt to adjusted EBITDAR ratio |
|
|
4.2 |
|
|
|
4.5 |
|
| (1) | The four quarters ended December 30, 2023 reflect the corrected results, which include the correction of non-material errors the company discovered in previously reported results. |
|
| (2) | The adjustments to the four quarters ended December 28, 2024 include expenses associated with the company's material weakness remediation efforts and executive search charges and the adjustments to the four quarters ended December 30, 2023 represent charges incurred resulting from the early redemption of the company's 2023 senior unsecured notes. |
|
| (3) | Transformation related charges include transformation plans designed to improve the company’s profitability and growth potential and streamline its operations. These charges primarily relate to inventory write-down charges and impairments on long-lived assets. |
|
| 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, net earnings or debt 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 might not be calculated in the same manner as, and thus might not be comparable to similarly titled measures by other companies. | ||
Store Information:
During the fifty-two weeks ended December 28, 2024, 42 stores were opened and 40 were closed, resulting in a total of 4,788 stores as of December 28, 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 fifty-two weeks ended December 28, 2024:
|
|
Twelve Weeks Ended |
|||||||
|
|
AAP |
|
CARQUEST |
|
Total |
|||
October 5, 2024 |
|
4,492 |
|
|
289 |
|
|
4,781 |
|
New |
|
18 |
|
|
— |
|
|
18 |
|
Closed |
|
(5 |
) |
|
(6 |
) |
|
(11 |
) |
Converted |
|
2 |
|
|
(2 |
) |
|
— |
|
December 28, 2024 |
|
4,507 |
|
|
281 |
|
|
4,788 |
|
|
|
Fifty-Two Weeks Ended |
|||||||
|
|
AAP |
|
CARQUEST |
|
Total |
|||
December 30, 2023 |
|
4,484 |
|
|
302 |
|
|
4,786 |
|
New |
|
41 |
|
|
1 |
|
|
42 |
|
Closed |
|
(22 |
) |
|
(18 |
) |
|
(40 |
) |
Converted |
|
4 |
|
|
(4 |
) |
|
— |
|
December 28, 2024 |
|
4,507 |
|
|
281 |
|
|
4,788 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250225874494/en/
Investor Relations Contact:
Lavesh Hemnani
T: (919) 227-5466
E: invrelations@advance-auto.com
Media Contact:
Nicole Ducouer
T: (984) 389-7207
E: AAPcommunications@advance-auto.com
Source: Advance Auto Parts, Inc.
FAQ
What caused Advance Auto Parts' Q4 2024 operating loss of $820 million?
How many stores is AAP closing in its restructuring plan?
What is AAP's dividend payment for Q1 2025?
What are Advance Auto Parts' strategic goals through 2027?
How did AAP's comparable store sales perform in 2024?
