Advance Auto Parts (AAP) 15 Nov 232023 Q3 Earnings call transcript

Hello, and welcome to the Advance Auto Parts Third Quarter 2023 Conference Call.

Before we begin, Elisabeth Eisleben, Senior Vice President, Communications and Investor Relations, will make a brief statement concerning forward-looking statements that will be discussed on this call.

Good morning, and thank you for joining us to discuss our Q3 2023 results. I'm joined by Gene Lee, our Interim Executive Chair; Shane O'Kelly, President and Chief Executive Officer; and Tony Iskander, Interim Chief Financial Officer.

Following Shane and Tony's prepared remarks, we will turn our attention to answering your questions.

be remarks please forward-looking will begin, statements. we advised today that contain Before than fact ongoing of including, statements and statements All other historical review, plans, limited statements future performance. operational but to, are regarding and our strategic initiative projections not statements, forward-looking differ statements. results the could or by from materially Actual projected those implied forward-looking

and under with our that Statements and Forward-looking commission. factors about results most information captions, Form cause actual made to Factors the in subsequent differ Additional could can the recent XX-K be filings found Risk

Now over let to Shane. turn the me call

Good I'm morning, the for earnings joining everyone, and thank as you my pleased for us. CEO call here to Advance. of be first

who We XX I have like of company. to with with you topics members know discuss all the begin, come my during this I've morning. days to first I'd to But thank before team several Advance's

the attended During markets, multiple Carquest our centers, stores many got that to our members time came where and of chance major I met with all and annual our this, the of with optimistic impressed company. I our away of in time, customers, meet of remain about I spent our I had distribution our the frontline dedication across to and know suppliers. team Through the vendor with future passion summit visited numerous independents

and to addition review. to team management make Board partnered spending and progress the operational In time our with in have the I closely on strategic field,

in placed to a while around military. those goals I the on fewer CEO, the company accountability This my achieve discipline new the the in and process ensuring goals. learned aligning As premium capabilities during includes time measurable

of achieve value. we simplify will growth. to we strategy help the profitable these that identified my execution, also and with actions moving a we overall company stabilize During our initiated are create announcing that, both sense have decisive to with while of forward we to of the return need Today, urgency improving are Advance, to which objectives. Consistent review

of sales Those Worldpac; one, for number as organizational separate number significant as Canadian a a in and CFO updates. our a initiation process the field; reductions; the the number three, are: well of the sale of process new other appointment cost for reinvestment four, number actions initiation number two, five, business;

and These further commitment selling our with renewed from and our and a come service of aspects eliminating decisive fundamental business. actions numerous business. we auto on focus of execution success initiatives blended disciplined a distracting across both are most were professional This That our reinforced DIY vigorous from that installers the where from core includes is believe customers clear our will box model, Advance parts. locations. We us Carquest the

beginning Worldpac a know, high-performing actions Let's you model. blended describe moment a box sale the very is process decision the is and take initiate our as to for with further Worldpac. than and, business different decisive X core our

that get we still the from believe the The and will our a back sale to we time As model. right the operates servicing to our Worldpac of Advance and now create as DIY professional business independently not simplify view relatively process customers, distraction. we fundamentals

will our not business our serves business. that about predominantly process professional the believe in and are largely separate sales this a we independently talk which We our goes let's for a U.S. sales Like cause banner. process Carquest Next, to Today, market distraction business. under announcing Worldpac, customers. runs business do Canada, for also Canadian

frontline simplifying efforts primarily expect not that team reduction of minimizing million our organizational of launched a will to supporting are investments part driven our customers. our in will and savings that basis. These structure, on new $XXX minimum as generate a we have duplicative savings program we Third, core an members review, be operational and by cost eliminating annualized

cost these teams of benefits that the see ensure to have line retention into wages and we to our must of next the action we reductions expect of serve In and year, improve business, of we we training experienced frontline inclusive to recognize beginning we take while the team million enhancements. our savings with reinvest customers. members our this, back approximately expect $XX to Fourth,

thrilled we changes fact, following I And businesses structure leading entire high-performing years' practices XX leadership has our He later joining from be record targeted to change to needed and Lowe's and frontline best improvements retail Gremlin organization. are implementing track to Ryan resolve team forward while joining strong for with the Pro have a him and more Advance. our that In compensation and family I issues. am that began teams appointed omnichannel organizational both robust Ryan already we in of frontline to announce reduction us in will roles. the in to experience CFO. search, to serving in look seeing complex than partnering a new pleased has Advance month making finance this the fifth, a QX DIY turnover We're customers. drive Ryan driving a lead

taken our CFO addition management In streamline our we've action announcement, to structure. to

and accountability. parts and marketing, our functions have collaboration enhanced in merchandising leaders responsibilities We reorganized drive e-commerce organization of my will transition leadership to and the who our team for appropriate

operate areas additional us We other organizational adjustments have made effectively. to help more in several

approach unprofitable to locations of including part assets, all strategic I the all a taking include review, core network, independently of rationalization focused evaluation our stores, are to enhance allocate and better disciplined corporate productivity. This would of the dystrophin may owned also to assets on our note, resources we as Carquest fundamentals.

as entire the expect We to in of business. more are progress we our this in thorough evaluation and early process share

the earlier, sharpening emphasized on are fundamentals. our we focus I As

we partner This valuable strategy. our an collaborate few and month, updates to days key Growth spent Summit hundreds how representatives serve team example, to critical who is better a our we opportunity from event for share our our last As customers. held annual annual with a are and of on us suppliers

be as we are for to venue return to we partnership. turning customers, partners. serve which to the us crucial members' is great would with ability growth articulate the that an vendor to a right having the and to how vendors support was We summit year's their inventory possible organization our our not for strong excited recognize without of This page are team availability our

to role capture Tony us. instrumental leadership partner to in Advance I'd past Finally, call hand His for thank as organization. the our serving incredible like to the as ahead across with been I servant forward Treasurer. as of to his the months we look Tony, off CFO I few over him and build before finance opportunity dedication his our continuing and interim addition to immense work has

like call on to provide Tony? over discuss our to the our now the QX results that, to for Tony turn year. and outlook I'd full With an update

also of thank increased QX all compared would dedication their members net $X.X to like and our Thanks, X.X% Shane, good and our continued our focus with on XXXX the billion for across QX, morning. sales to team strength business. continued customer. I due In professional

store Comparable X.X%. sales increased

were oil positive the regions Northeast a our and and growth. quarter the Florida regions management, From filters, saw mid-single-digit of West, batteries. with category engine motor posting during strength we All in perspective,

year-over-year. significantly and meaningful in delivered we've in-stock heating Importantly, cooling improved as we levels our growth

and DIY omnichannel X In weeks the of X the periods softened of Pro saw strength the both cadence of the quarter. in last quarter, terms and the first

top improvement digits as was continued QX. transactions Pro the from were up business year mid-single on previous Our DIY to throughout improve outperformed of the positive omnichannel QX and in and

Pro expected, competitive our As slightly ongoing as average ticket efforts part maintain targets. down was in to of price

in single digits However, digits transactions up was units QX. increased omnichannel mid-single year-over-year. have down with DIY slightly low average ticket

will results. financial The and turning financial as for Before P&L, in results of corrected remediation the made to towards the this prior of of our material weakness a part reported QX our actual diligence top the our results progress previously balance uncovered process, issues strong our to The balance of we the our material results weakness priority. nonmaterial our remains we've remediating with compare year.

Despite with improving line by our deleveraged XXXX. top and QX compared impacted negatively gross several profit margin was basis trends, XXX points factors

the change in regarding of and inventory million. in Shane decisive we onetime with actions excess estimate of business, review our and part incurred implemented highlighted $XXX First, approximately of earlier, the a our operational impact line a as reserves

costs $XX as sustain fully we not quarters, product Further, like were previous higher in targets. we by actions million pricing experienced CPI our covered approximately that

chain as we expenses inflation million volume this wage in increased addition, were LIFO-related of same resulted benefit a $XX quarter million and headwinds These partially in supply $XX expenses. the expense elevated period In recognized year. a reduction by with last in compared offset

leveraged a of percent the SG&A SG&A sales, XX net dollars While basis nearly points. year-over-year quarter as in

points income QX deleveraged Our approximately with prior compared margin XXX quarter. operating basis year the

past the the saw years. in sales significantly we discussed, and have reduce increased than over faster morning you our Shane release are to action taking in this as that business costs As few

with We our million per see of QX in $X.XX diluted expect approximately reinvested earnings $XX share a compared loss prior $X.XX frontline in in million the Diluted full of the of XXXX year with to minimum $XXX team share was savings per annualized quarter. members. in

million was an flow outflow of year-to-date inflow $XXX $XXX cash and the Free nearly in million. quarter was of an

continue our from our metrics, XX.X%. on focus ratio AP we to points to XXXX As capital QX expanded working basis XXX

guidance, let me to on supply finance. chain touch Before turning

a our maintained that to partners thanks level vendors. in to and program similar strong chain support finance have the capacity us We of bank supply continue our

our full this are in As updating release saw you our morning, we year guidance.

net our store sales the adjusting top are and We ranges. of comparable end

in onetime factors several margins flow costs EPS operating the year. to of in This income impacting ranges. inventory change and incur to QX guidance back as the organizational reducing estimate related restructuring in there in However, we are expect free margin our excess includes diluted our are mentioned, half and the our cash Accordingly, QX. we

our additional evaluate and decisive operational further to review. taking as improve are opportunities continue we our on now We cost make we'll structure and to progress strategic actions

comparable margin positive of diluted XX%; As X.X% million; GAAP net earnings branch flow expenditures flat; $XXX new result, ranges per million we updating and X%; $XX to X.X% sales to of to income are $XX.XX openings. to guidance rate cash include: $XXX XXXX $X.XX; billion; of of to million operating capital $XX.X to income $X.XX sales free of XX store store billion tax our a to of XX million; of share $XXX and minus to

like that, to the call to With Shane. I'd turn back

members our additional while we team and executing operations. done to focused be recognized our a and there I our simplify work earlier, look substantial As is on opportunities are continuing mentioned at strategy to to frontline centered customers on

stabilize position taking Advance take success. are decisive and will and business sustainable continue long-term action to We to for the

Board committed call. open and I it us next the look would further up updates of profitable value I shareholders. to our growth earnings on with forward creating management for Advance to you team to questions. Operator? are address to like All providing the at entire returning now and to your

Our [Operator question to Michael first Lasser UBS. Instructions] goes today of

Parts, Auto moving Advance there's at tenure your business the in so in early right very many but now. been it's know I Shane, pieces

the about we sell? the correct long you're think long should it term, that some excluding the businesses of core run looking gross settle is term? business, a about operating what's And that you to seems to like As rate implied the realistic around margin for that Is for margin think going range. XX% the the the

for margins, long-term the looking early OI all then as we thanks than I'm 'XX. are these the there. to days, where on they'll know for absolutely looks like where where for focused to about And for the we too that implement It's can be actions what margin. do question. can that help but decisive and Michael, that in if optimistic we other set go. me them, do And sit we in say company increase to it we Early that X we'll this boosting same

managing a with one to to where other is they view org And way a Just retail a is one company. think happen be there, dimension structure, help in that our component having direct critical for report making merchandising comment as about of small a that me. that margin

that could process? business? And is, are follow-up if any the needs of And you impact as the from help are downgrade? of will you credit question my you Worldpac around or comment go through anything, business Okay. And the you Canadian that how the rating the size thinking negative seeing capital about

about I'm going We've can Centerview lot reach to to Tony and then I'm manage financing? can Worldpac you that to size them. parties And us So there. interested Tony, going or a process on the have not chain liquidity issues of to Canada. or on liquidity out and comment, to but we ask But engaged comment issues don't supply tell financing. the

which for to to really finance remarks, supports you Yes. our Michael, or as continue good again. maintain chain program, supply you my similar program. and the We levels heard we our -- talk very prepared same our have finance level to in vendors

in to And So saw earnings we're cash not seeing we any release, you flow. grow continue our impact. as

that we have balance the any grew, during revolver balance we on the quarter as well. outstanding did and the on Our sheet cash down paid have not as

And that last question...

There's really that around the is going sale there's focus domestic urgency Michael, model. we or requirements is a pack businesses. and which to no or of This on -- what box as They're both forward, want Canada. no our blended around World company good strategy

question to our Horvers JPMorgan. goes Chris And of next

Carquest like line also cost it? out be the on It's chain? or fix Christian in to you'll some And but the path DCs. for maybe back, what the smaller would forward laid line wrong the with the Carlino on terms now I time time the you stepping cost back of You it Chris. to paring guess the characterize any supply seems saves, of how color went

you will process? modern front add is on more operational management more it to Or better fixing then or inventory the need facilities? So the located

So the a lot question. there. Thanks for

be know say our The Carquest I'll focus X our the forward. validating entities comfortable be first thing do we chain. may will I'll That and develop we as future of is around chain from that the And some plan supply design there'll putting areas some that rationalization. that, be from we're the as where Advance. stems go that you really but be next we'll facility is from of additions, supply There X

merchandise of supply work on be of design there, been number comes of engine just cooling which there's lot that inventory can across terms of And teams. areas. the on heating availability, In the a and car and under a management, pick that actual improved Think brakes. what shovel work as the efforts about going those on and discrete and from going occurs we've chain with

the supply constant? the somewhat How some one the managing puts XQ? guide. quick implication back chain And just for and terms takes the are on we you how maybe holding you're margin then about onetime the for you're What in costs of suppliers finance that giving it. reorganization days program, Got in That's I also exchange there? then is should helpful. including in the payable And one guess, think

questions. good Two Yes.

So first, let's address supply the chain financing.

that seeing kind in impact We our are not of programs.

very of and have vendors. we have We from a bank amount key strong tremendous support partners our

seeing not that of this any So at we time. are

feel we that, of terms in So good.

from kick laid It back to guide. the commenting restructuring. our not in really is of included half, due guide around off. have terms In team the not We're as in we on out impact just we our the this the that the sensitivity members

dimensions Yes. be to a through. associates, we Those place process taking difficult this week, any reorganization and that's are go company to sensitive our want for to

to of goes Suzuki The next Merrill Lynch. question of Elizabeth America Bank

cash I question a in new the to piece. the particularly of context the Just on the decision and store simplifying increase preserving business opening mean, flow.

profitability Just and exceeding new curious store terms seeing what of whether expectations? your been you're in that's

Yes.

a couple store of that you in of opening So opening based stores some openings. on terms to of or increased those we have again. had to accelerating new opportunities good We talk Liz, that

So to on business. to in new our we continue approach be X and the asset our talked about an believe that will stores, to part we've we and will very prudent last continue productivity we quarters, focus that's important of that

And sell that back just acquired to businesses you're the planning and was what in a XXXX. question on

the assets those but and that have acquisition. part part how GPI -- the Carquest you're the evolved? about because -- keeping how the thinking Canadian Worldpac whether -- so of the Just business, part selling selling U.S. And of

much analysis. or our frame just as those possible So just trying as to size businesses for

prepared that process those sales now. we're that out -- both they're starting We reporting, good just not just segment and But break now. is businesses. reiterating don't to do so

business price what suitors. to with So we'll in requirement we do not potential the see sell with No discovery the we're if satisfied market.

that now. And so just starting we're

The of Citigroup. next question to goes Zaccone Steven

margin the To think that could reported cash least how that follow for cash? than the about you at up would the rank the operating much today? using is then us prior business you about higher question, And it these from have sales, help priorities on you proceeds Worldpac talk the

Yes.

segment to box to business. our that which Unfortunately, us business good forward, a on approach reporting, blended about to it's say going have not great a model. sell it. selling is So back the question. than other requirement lets simplify it I'm don't talk the going to We

Your We're do it deploy on going question the our that a the is clear want good And proceeds one. always this. business initiatives dollars business. to a have event like first if in what you and an we economic to internal with from rates for to the

excited the So about of there's that. remaining We're investment growth business, our business. the an for

Secondly, strengthen sheet. always prudent balance funds to to deploy the

an at major be excess capital think proceeds. And efforts then shareholders the that the how be about of X to might and returned that. that. look for So can would option third, becomes we we Those where

Okay. Understood. DIFM My follow-up side. question the is just on

So you with do been do of to core business, be long why bit drag been side share. And ticket a there, the has has your you Pro business of fresh a drag. perspective to on average guess, think the specifically business? the that the I losing advanced a expect How

Yes.

you level on we that's do store So then take And But provide actions just focus flavor those DIFM But versus I'm that, organization what to now? both break Tony seeing right characterize of that is a business and on DIFM going decisive success. us DIY customer. that simplify the to coming bit ask gain we into DIFM out the can focus think my help performance. the the know I to for where you're at that DIY as and Tony, our

Yes, correct.

focus number. as part our to bring as result, targeted continue to heard down our will you've transactions continue ticket. to quarters, a And increase. a CPI about of X though, the that, as us And that average on talk we X So last very

goes The Bret next Jefferies. of question to Jordan

I into systems. stores a a ex-Worldpac. across with We How chain being this this being of coming you the -- this chain had progress close at sort -- a guess common of supply do this standpoint. perception the always supply has into been sort fresh sort eyes. to of the coming been see consolidated system business various obviously, all of And from of looking real mash-up to made

Yes.

immediate back is my looks for that. It's focus calls future covered, about that. the So the on you for we'll chain to on we on supply sense after my done that's you what to pivot we're confident it. tasked that but think diligently on will decisive is come something to chain chain But the And supply And me, is a company. time where line shortly a for the be X supply team unified overnight. working like, can that get we that not actions

then that Or I what that business Pac guess, on And result sale? customers you sales in I a advance do were Okay. dis-synergy common might there World see, you is separate? your the relatively having guess it of the Were a or to Worldpac, lose?

a separate different a it as and business, So business. runs it is

success. dissynergies is in sell we business, that, we're a as going I see a simplification that model. sell for back box we do fundamentals parts of that's fit going good to what recipe for We that So auto think focus. blended And to model. a doesn't see Pac World future but us the out as really of don't there, I of And our

which we're kicking sales the So today. we'll process, off explore

comp? was quick traffic? versus What a for And contribution price inflation Tom, what the Okay. to housekeeping was

YYes.

I think Tony. for that's

terms price of to cost. enough priced portion inflation, In of just we cover

was it quarter. third comp the minimal to So in very our

goes Truist. question of The Scot next to Ciccarelli

your pretty confidence smoke, what was the it like guys What fire issues where ask the the to stint there's seems new Scot -- Ciccarelli. team. wanted uncovered you I aren't restatements a about historical financials today after for concept. short there bigger finance disclosed because in there's you gives under

in So a up could more reveals digging where we more end situation issues?

weakness not Scott, to as quick and is this continue priority the it we this possible, in It in to committed is Tony material weakness finance, either. is behind dig getting and as possible here. remediated material and are top We're to meeting possible. we but our

we So weakness we to as material find share well. we'll but will of that keep as abreast more continue you information, remediation

a you And on made benefit Got quarter you it. from sizable then . Is include I Life? can numbers the year-over-year this Did that repeat comments what heard? actually LIFO? your

correct, That's Scott.

to Simeon Morgan The next Gutman goes question of Stanley.

on is Simeon. ] Jackie This Susan [ for

some are you well. advanced You improve that retention. the to of guys towards enough prepared areas kind or executing retain and reinvesting view, some improvement cost go feel areas mentioned conversely of you're like in will has you savings In where your best its remarks your employee see to of pretty that done people

What the perspective from in the to field, been engaging to I've key company best I'm of frontline where team our is as be. below we in level doing members impressed certain got So care customers. we a take their day, positions associates with found was wage every where energized wanted in we were

of those see we So we've started investments correspondingly to reduced. some investment, the and make the make is turnover where we

well. reduce we from team that some will here career come turnover can the over team, think extend as But their then positions. showing for And they beyond our with they that's our teams pathing energized further in, it develop wage. frontline can initiative we career of time together, think is they the all into to our also work taking go. key will And as where advance, part of so monies that be that can HR training, field idea company can putting feel the see for and they're they that have they reduction the And help and folks they and cost how that our with associates the wage and

doing it's part from it what all the investments early is to program So and that that's do. putting we're read want the we Xexactly early together that of

on mentioned. mostly can growth of That's well? or will mean, P&L? helpful. housekeeping more that. most color question that that as you fit kind side kind Where regarding across that just you if cost in savings give of you. some And X Is super I the Got on the the SG&A

Yes. predominantly SG&A. It's in

of that come most savings there. through see You'll

more Bottiglieri counting this question next Paribas. are was could up. goes on guys Like I of appreciate Chris elaborate to you cleaning write-down. I hoping you inventory BNP The

a periods it's like have it's think and I of Was years growing been chain beyond supply while really the at want the like to of But what this for for great is onetime now. forward. like costs kind this some someone all that concerns is related just to because see to prior of I kind adjustment. there write-down. in the overearning going impact understand capitalized

Chris, inventory. a that it's it's Tony. chain $XXX talk inventory to changed million. much we the the change as excess to of It's onetime relevant out sell. way and a are And We plating Those costs. of you. costs estimate supply say capitalized Good or of how result to or to we our as part a The capitalized took P&L result, we to buy in not charge continue.

a So change of this pure just estimate. is result in our

Got you.

really moving their It what right up per business this That's the are helpful. terms SG&A Okay. And in peers ramping is like rate kind then do forward? growth of store. just investment seems think second, SG&A of like of an you

I great if and reinvesting your million, cutting that think reinvestment? it's are you're It accelerating $XXX but how million? do $XXX all $XX think the seems like peers of not million you're costs you about investments. Like

years. one it's last think business the of been the the faced I X challenges has

going we at in reinvest business to where around really spending This for or good investing money a current not the it's the of growth I'll -- was business future. but we're getting going we'll cutting we're in to where suggesting we're we and So the looking the not invest be where weren't absolutely I'll or and state in the heavy ask were cost start forward. yes, business start productivity, not through going Tony comment and that to we're this question.

I be SG&A, leverage think I you have we any want it. But think great. that's retail we general, go think of we about And businesses forward. be as then creating in on Tony, if on a key to would that, how just about that part character the way

Chris. Yes,

over or few structure about outpaced top the last cost think outgrown has to is years, way the SG&A line. So has our it our our

we doing announcing our today to actions what's stop fundamental or certain the the projects of really in in stop on to This business. not business. -- we we're So and or the took stores investing is the are focus

we So approach program. -- reduction and cost that's how this

question, those Steven Forbes Guggenheim next The you of Partners.

to the early Really, on why message decision XXX-day is sell stemming and the just review to into urgency process, asset? a wanted revisit the back, such could to really I take urgency Shane, the the Shane, so step sell Worldpac in we decision Worldpac. from? What if the

Yes.

So to our Gene from decisions of knee-jerk company in stature I assessing don't the of direction benefit you Executive is. talking first, think that what counsel continuity the in at also terms and these Chair, want with are leaders the right

a a the bias perspective I I action. And that's important. that and business validation So think doesn't perspective days. come just is being me really in in then for that from for eyes XX What do bring terms of fresh of

But did have the this of of these wasn't you forward. do Doesn't activities that some we we decisions that company status set and going as will it. to for time, in, we in with working. mistakes success over the readily performance clearly, to that I course. things will doesn't on before that us were the do make answers, at is admit trajectory where it's where quo won't our to correct mean the all clear that the and of which needed looked I the reset One company initiatives came make mean

box And our a is that we going blended strategically for forward, comes And tenant from. that so that's think success. model where

And help the the maybe we that, is reframe million sale, I'm free full think for this on follow-up. can the then quick Shannon, cash to appreciate as the assets color would what but not assets financial asset a sure I flowing sort I -- just year? if year. is be realize you're flow providing guidance not positive What you of the $XXX year, million core this cash for the free through right, remaining $XX

so segment don't sale you. million $XX the this for of Since operations. any we $XXX of the that year, anticipate out report, we to financial consolidated our can't Yes. inclusive We is to break don't million happen

The Basham next to Seth Wedbush. go of question

is around gross question My margin.

some the margin. what is could charge, this you down more even your margin. quarter, us inventory trying step give gross understand If please the excluding to just we from on last step the a right gross I'm down. quarter, color saw

take that. I'll Yes,

in of look called not the when price biggest at predominantly but additional exclude is really I'd cost add structure mix. continue we And chunk, inventory, channel -- excluding look other out. coming couple One then cover that's when the costs. our we with at is the So factors. is costs, there's the cost supply chain inventory. And you to to is what that not you We've that predominant also the -- deleverage the you seen a cost the really from key some covering

to we does our continue margins lower have than business. Pro rebound, our DIY that As see

on unit So costs you per And program? partly continue vendors under to your due chain to for a supply is higher basis, that are rise? your costs financing seeing the financing

are building price -- we are we're that No, but an cost. not costs that to not in, cover built inflationary not there's additional it's already that

goes question Wells Fadem Fargo. Zack to of next The

the So earnings first first of all, Shane, call. congrats on

should remove do-it-for-me the you for line there? profitability, to and there profitability? for? today? a plan a plan growth talk over then profitable think your business Any you could the And of balancing about mix Is do-it-for-me the top expect to business growing XX-XX-ish culling prioritize a think you DIY we color customers the And less is game bit current optimal. as question, the whether So about

great. It's

So each those turn. about in talk let's

store-based representatives. in prominent we starts you to Also Pro, Those CAMs. stores. of in have It with the growing representatives do CPPs the be a certainly are our the on the are the want growth. is part And our that pro field-based engagement the First, way market. Pro

pro of And some business moves so in Junior terms part we've that we're organizing our how award. done under of

and And made so streamlined get we've some as moves, in to Worldpac. ready divest particular, we

it and that So have Pros. the get we it. and call there. and on efforts the you Pro that on we'll first parts that our got Obviously, the aligning for right and business, product, the ahead side will means that's as this us house, we're our call. In us help to pro also need be of to focus where so they we hand customers have want go

customers, decisions how operate and to we at just just less grow utilization an income. operating and to just do operate this put grow we top I'm it And broadly effort rational relates can contributing we make around across the without about company. need want assessment we asset profitably. going I around the to and expense of think how and As look profitable don't under where where to just line We

important. that's think I

And as look those merchandise. at we what who of getting back how then make of that's each think to all on And to, chain, to supply about inclusive to -- with looking profitable looking our advanced to We're So appropriate about we sell our profitable get our growth. of we a we're of logical trajectory decisions I consistent stores, it's assets, growth. that do.

that Got operating expected color it. think is the suggested I appreciate And you grow there. XXXX. then margin I your to in

more versus detail in growth like costs the bit recovery business. about and line you just talk to change there So the if of top out a taking with other Worldpac respect makeup structural versus margin curious little could

Yes.

additional will about today, rate too run what full lot you and that the in talking think back in start you benefit soon it's February terms to we to we so program We'll color have have cost said far XXXX reduction XXXX. provide of a come of that is I margin. in announced

more So of business. come February as to -- operational our and the we continue down review but in strategic

Ori The of to next question Priya Gupte goes Barclays.

for This is Pia. in Argus

you of terms ratings. in the moment? Fitch soliciting this question credit rating Are at considering a have We a

Yes.

our time, the are the we quarter. for -- announce public, rating that we working we most that the we business. have in As makes maintaining on what are future. Fitch if you've sense to cash to we continue always capital decide our structure, for we what capital improve our will and consider us metrics to business At announce will overall solicit we we this focused seen today, flow turning continue this assess and

ISI. Evercore question next of The Michael to goes Montani

discuss on the Mike that positive just off, year. side, inflect Mellick. you Greg the for cash full for plans the ask, to is on if wanted first I This Montani to could flow

running I first X negative think through million about the you're quarters. $XXX

in . fourth something you probably positive the get simple, but is that quarter? So inflected do how

Yes.

those capital last our on as we working to over quarters to continue in seen and of you've quarters, focus we improve. the positive each cash metrics As generate flow continue business, X sales the focus to continue on

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up follow I And if just line. sales it. then could the on Got

also there's some that's mention period. slowed discuss fourth if could deterioration you slowdown? the in Was Pro? Or driven final into DIY have terms was in the continued And would quarter? color if it did the any if curious versus what of You that

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you is Andrew Casino Oppenheimer. [indiscernible] Our final question

It's opener Brian from here. We it. appreciate Nagel

So a couple of questions.

side. competitively to competitive your now either anything respect transition particularly seeing transformation, competitors, an your environment, Are if will, with just smaller the larger professional from off, well First you pretty this documented. of the change or or some on whether you advance given competitors is

some Shane, be And expecting point of the longer-term ultimately distant and watching here for of Should at your out this we second the in and should plan you've kind some question or then team future off, can not you've of operating out company, transformation investors kind steps you too be a expecting business first a my Advance. and we laid indicating where head. initial as maybe analysts laid welcome

-- thanks, let's So Brian.

think with see team players I smaller larger with environment, be successful helps And to our what actions that's competent a in players around going and with we excitement great our frontline I who think We're waiting competitive do frontline which internal our environment. as these got occur. our days we've decisive market I And team. number is members the to in of a that the obviously customers, simplifying for we On competitive what's compete we're notably focus. enabling in early unlock my

So early an days going us. to be talk from economically. and having field certainly, about is to philosophy engagement for mentality, might I where perspective, But think, progress create a first momentum that perspective there

and then taking my longer-term we're first certainly plan, trajectory is, long-term currently days in be areas in. future inclusive initiatives undertaking where and business the the mapping still at the out we be the we're of XX looking will On I'll what the future, for that the

have very That for sharing next you Thank a your support. We're grateful Have happy is all all to we February. week continued us. for in Wish all questions look the today. day. forward Thanksgiving more and joining nice you a

you. This call. you all Thank concludes Thank now joining. today's for

now may your disconnect You lines.