Q1 2024 Advance Auto Parts Inc Earnings Call Transcript
Key Points
- Professional business saw low single-digit improvements in both comp and transactions.
- Decisive actions to simplify the business, including the sale process for Worldpac and cost reductions, are underway.
- Achieved $150 million in annualized savings and reduced SG&A by $21 million year-over-year.
- Successful implementation of a new merchandising system, adding 130,000 SKUs in Q1.
- Progress in consolidating the supply chain with a unified network plan involving 14 large DCs and market hubs.
- Q1 performance was lower than expected, with comps down 20 basis points year-over-year.
- Gross profit margin declined by 82 basis points due to cost pressures not fully offset by price.
- Continued pressure on DIY segment, resulting in low single-digit negative comparable store sales.
- Weather and macroeconomic conditions negatively impacted sales, particularly in the Mid-Atlantic, Southeast, Texas, and Florida regions.
- Q2 is expected to be the toughest margin quarter of the year due to pricing actions taken last year and ongoing consumer uncertainty.
Welcome to the Advanced Auto Parts First Quarter 2024 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 Q1 2024 results. I'm joined today by Shane O'Kelly, President and Chief Executive Officer; and Ryan Grimsland, Executive Vice President and Chief Financial Officer. Following Shane and Ryan's prepared remarks, we will turn our attention to answering your questions.
Before we begin, please be advised that remarks today will contain forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding our strategic and operational review, initiatives, plans, projections and future performance. Actual results could differ materially
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