Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jul. 16, 2022 | |
Cover [Abstract] | |||
Entity Central Index Key | 0001158449 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-16797 | ||
Entity Registrant Name | ADVANCE AUTO PARTS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 54-2049910 | ||
Entity Address, Address Line One | 4200 Six Forks Road | ||
Entity Address, City or Town | Raleigh | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27609 | ||
City Area Code | 540 | ||
Local Phone Number | 362-4911 | ||
Title of 12(b) Security | Common Stock, $0.0001 par value | ||
Trading Symbol | AAP | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 11,302,276,702 | ||
Entity Common Stock, Shares Outstanding | 59,273,781 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2023 Annual Meeting of Stockholders, to be held on May 24, 2023, are incorporated by reference into Part III of this Form 10-K. | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor [Line Items] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Charlotte, North Carolina |
Auditor Firm ID | 34 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 269,282 | $ 601,428 |
Receivables, net | 698,613 | 782,785 |
Inventories | 4,915,262 | 4,659,018 |
Other current assets | 163,695 | 232,245 |
Total current assets | 6,046,852 | 6,275,476 |
Property and equipment, net of accumulated depreciation of $2,590,382 and $2,403,567 | 1,690,139 | 1,528,311 |
Operating lease right-of-use assets | 2,607,690 | 2,671,810 |
Goodwill | 990,471 | 993,744 |
Intangible assets, net | 620,901 | 651,217 |
Other assets | 62,429 | 73,651 |
Total assets | 12,018,482 | 12,194,209 |
Current liabilities: | ||
Accounts payable | 4,123,462 | 3,922,007 |
Accrued expenses | 634,447 | 777,051 |
Long-term Debt, Current Maturities | 185,000 | 0 |
Other current liabilities | 427,480 | 481,249 |
Total current liabilities | 5,370,389 | 5,180,307 |
Long-term debt | 1,188,283 | 1,034,320 |
Non-current operating lease liabilities | 2,278,318 | 2,337,651 |
Deferred income taxes | 415,997 | 410,606 |
Other long-term liabilities | 87,214 | 103,034 |
Commitments and Contingencies | ||
Total liabilities | 9,340,201 | 9,065,918 |
Stockholders' equity: | ||
Preferred stock, nonvoting, $0.0001 par value, 10,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, voting, $0.0001 par value, 200,000 shares authorized; 0 shares issued and 0 outstanding at January 1, 2022 and 76,305 shares issued and 66,361 outstanding at January 2, 2021 | 8 | 8 |
Additional paid-in capital | 897,560 | 845,407 |
Treasury stock, at cost, 17,724 and 14,654 shares | (2,918,768) | (2,300,288) |
Accumulated other comprehensive loss | (45,143) | (22,627) |
Retained earnings | 4,744,624 | 4,605,791 |
Total stockholders' equity | 2,678,281 | 3,128,291 |
Liabilities and Stockholders' Equity, Total | $ 12,018,482 | $ 12,194,209 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 2,590,382 | $ 2,403,567 |
Preferred stock, non-voting, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common stock, voting, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (shares) | 200,000,000 | 200,000,000 |
Common stock issued (shares) | 76,989,000 | 76,663,000 |
Common stock outstanding (shares) | 59,264,000 | 62,009,000 |
Treasury stock (shares) | 17,724,000 | 14,654,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Net sales | $ 11,154,722 | $ 10,997,989 | $ 10,106,321 |
Cost of sales | 6,192,622 | 6,069,241 | 5,624,707 |
Gross profit | 4,962,100 | 4,928,748 | 4,481,614 |
Selling, general and administrative expenses | 4,247,949 | 4,090,031 | 3,731,707 |
Operating income | 714,151 | 838,717 | 749,907 |
Other, net: | |||
Interest expense | (51,060) | (37,791) | (46,886) |
Loss on early redemptions of senior unsecured notes | (7,408) | 0 | (48,022) |
Other (expense) income, net | (6,996) | 4,999 | (3,984) |
Total other, net | (65,464) | (32,792) | (98,892) |
Income before provision for income taxes | 648,687 | 805,925 | 651,015 |
Provision for income taxes | (146,815) | (189,817) | (157,994) |
Net Income | $ 501,872 | $ 616,108 | $ 493,021 |
Basic earnings per common share (in usd per share) | $ 8.32 | $ 9.62 | $ 7.17 |
Weighted average common shares outstanding | 60,351 | 64,028 | 68,748 |
Diluted earnings per common share (in usd per share) | $ 8.27 | $ 9.55 | $ 7.14 |
Weighted average common shares outstanding | 60,717 | 64,509 | 69,003 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Net income | $ 501,872 | $ 616,108 | $ 493,021 |
Other comprehensive income (loss): | |||
Changes in net unrecognized other postretirement benefit costs, net of tax of $66, $93 and $54 | (186) | (264) | (152) |
Currency translation adjustments | (22,330) | 4,396 | 7,962 |
Total other comprehensive income (loss) | (22,516) | 4,132 | 7,810 |
Comprehensive income | $ 479,356 | $ 620,240 | $ 500,831 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Tax | $ 66 | $ 93 | $ 54 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock, at cost | Accumulated Other Comprehensive (Loss) Income | Retained Earnings |
Balance (in shares) at Dec. 28, 2019 | 69,232 | |||||
Balance at Dec. 28, 2019 | $ 3,549,081 | $ 8 | $ 735,183 | $ (924,389) | $ (34,569) | $ 3,772,848 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 493,021 | 493,021 | ||||
Total other comprehensive income (loss) | 7,810 | 7,810 | ||||
Restricted stock, restricted stock units and deferred stock units vested (in shares) | 234 | |||||
Share-based compensation | 45,271 | 45,271 | ||||
Stock issued under employee stock purchase plan | 3,270 | 3,270 | ||||
Stock issued under employee stock purchase plan (in shares) | 20 | |||||
Repurchase of common stock (in shares) | (3,125) | |||||
Repurchase of common stock | (469,691) | (469,691) | ||||
Cash dividends declared | (69,235) | (69,235) | ||||
Other (in shares) | 0 | |||||
Other | (15) | (15) | ||||
Balance (in shares) at Jan. 02, 2021 | 66,361 | |||||
Balance at Jan. 02, 2021 | 3,559,512 | $ 8 | 783,709 | (1,394,080) | (26,759) | 4,196,634 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 616,108 | 616,108 | ||||
Total other comprehensive income (loss) | 4,132 | 4,132 | ||||
Restricted stock, restricted stock units and deferred stock units vested (in shares) | 331 | |||||
Share-based compensation | 63,067 | 63,067 | ||||
Stock issued under employee stock purchase plan | 3,074 | 3,074 | ||||
Stock issued under employee stock purchase plan (in shares) | 23 | |||||
Repurchase of common stock (in shares) | (4,710) | |||||
Repurchase of common stock | (906,208) | (906,208) | ||||
Cash dividends declared | (206,951) | (206,951) | ||||
Other (in shares) | (4) | |||||
Other | $ (4,443) | (4,443) | ||||
Balance (in shares) at Jan. 01, 2022 | 62,009 | 62,009 | ||||
Balance at Jan. 01, 2022 | $ 3,128,291 | $ 8 | 845,407 | (2,300,288) | (22,627) | 4,605,791 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 501,872 | 501,872 | ||||
Total other comprehensive income (loss) | $ (22,516) | (22,516) | ||||
Issuance of shares upon the exercise of stock appreciation rights (in shares) | 3 | 3 | ||||
Restricted stock, restricted stock units and deferred stock units vested (in shares) | 297 | |||||
Issuance of shares upon the exercise of stock appreciation rights | $ 535 | 535 | ||||
Share-based compensation | 50,978 | 50,978 | ||||
Stock issued under employee stock purchase plan | 4,140 | 4,140 | ||||
Stock issued under employee stock purchase plan (in shares) | 25 | |||||
Repurchase of common stock (in shares) | (3,070) | |||||
Repurchase of common stock | (618,480) | (618,480) | ||||
Cash dividends declared | (363,039) | (363,039) | ||||
Other (in shares) | 0 | |||||
Other | $ (3,500) | (3,500) | ||||
Balance (in shares) at Dec. 31, 2022 | 59,264 | 59,264 | ||||
Balance at Dec. 31, 2022 | $ 2,678,281 | $ 8 | $ 897,560 | $ (2,918,768) | $ (45,143) | $ 4,744,624 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per common share | $ 6 | $ 3.25 | $ 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 501,872 | $ 616,108 | $ 493,021 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 283,800 | 259,933 | 250,081 |
Share-based compensation | 50,978 | 63,067 | 45,271 |
Loss and impairment of long-lived assets | 3,581 | 8,949 | 4,727 |
Loss on early redemption of senior unsecured notes | 7,408 | 0 | 48,022 |
Provision for deferred income taxes | (6,338) | (68,202) | (8,136) |
Other, net | 2,587 | (7,985) | 1,467 |
Net change in: | |||
Receivables, net | 81,254 | (32,652) | (59,014) |
Inventories | (272,253) | (120,272) | (101,449) |
Accounts payable | 212,568 | 281,064 | 216,488 |
Accrued expenses | (165,643) | 109,983 | 78,507 |
Other assets and liabilities, net | 9,732 | (134,135) | (15,569) |
Net cash provided by operating activities | 722,222 | 1,112,262 | 969,688 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (424,061) | (289,639) | (267,576) |
Purchase of intangible asset | (1,900) | 0 | (230) |
Proceeds from sales of property and equipment | 1,513 | 2,325 | 909 |
Net cash used in investing activities | (424,448) | (287,314) | (266,897) |
Cash flows from financing activities: | |||
Payments on senior unsecured notes | (201,081) | 0 | (602,568) |
Borrowings under credit facilities | 2,035,000 | 0 | 500,000 |
Payments on credit facilities | (1,850,000) | 0 | (500,000) |
Proceeds from issuance of senior unsecured notes, net | 348,618 | 0 | 847,092 |
Dividends paid | (336,230) | (160,925) | (56,347) |
Repurchases of common stock | (618,480) | (906,208) | (469,691) |
Other, net | 1,469 | 3,021 | (4,483) |
Net cash used in financing activities | (620,704) | (1,064,112) | (285,997) |
Effect of exchange rate changes on cash | (9,216) | 5,600 | (467) |
Net (decrease) increase in cash and cash equivalents | (332,146) | (233,564) | 416,327 |
Cash and cash equivalents, beginning of period | 601,428 | 834,992 | 418,665 |
Cash and cash equivalents, end of period | 269,282 | 601,428 | 834,992 |
Supplemental cash flow information: | |||
Interest paid | 46,159 | 36,372 | 34,011 |
Income tax payments | 94,605 | 177,317 | 146,073 |
Non-cash transactions: | |||
Accrued purchases of property and equipment | $ 8,927 | $ 14,369 | $ 4,963 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation: Description of Business Advance Auto Parts, Inc. and subsidiaries is a leading automotive aftermarket parts provider in North America, serving both professional installers (“professional”) and “do-it-yourself” (“DIY”) customers. The accompanying consolidated financial statements have been prepared by us and include the accounts of Advance Auto Parts, Inc., its wholly-owned subsidiaries, Advance Stores Company, Incorporated (“Advance Stores”) and Neuse River Insurance Company, Inc., and their subsidiaries (collectively referred to as “Advance,” “we,” “us” or “our”). As of December 31, 2022, we operated a total of 4,770 stores and 316 branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. In addition, as of December 31, 2022, we served 1,311 independently owned Carquest branded stores across the same geographic locations served by our stores and branches in addition to Mexico and various Caribbean islands. Our stores operate primarily under the trade names “Advance Auto Parts” and “Carquest,” and our branches operate under the “Worldpac” trade names. Accounting Period Our fiscal year ends on the Saturday closest to December 31 st . All references herein for the years “2022,” “2021” and “2020” represent the fiscal years ended December 31, 2022 and January 1, 2022, which consisted of fifty-two weeks, and fiscal year ended January 2, 2021, which consisted of fifty-three weeks. Basis of Presentation The consolidated financial statements include the accounts of Advance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies: Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and highly-liquid instruments with original maturities of three months or less. Additionally, credit card and debit card receivables from banks, which generally settle in less than four business days, are included in cash equivalents. Inventory Our inventory consists primarily of parts, batteries, accessories and other products used on vehicles that have reasonably long shelf lives and is stated at the lower of cost or market. The cost of our merchandise inventory is primarily determined using the last-in, first-out (“LIFO”) method. Under the LIFO method, our cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs relating to prices paid in 2022 and prior years. We regularly review inventory quantities on-hand, consider whether we may have excess inventory based on our current approach for managing slower moving inventory and adjust the carrying value as necessary. Vendor Incentives We receive incentives in the form of reductions to amounts owed to and/or payments from vendors related to volume rebates and other promotional considerations. Many of these incentives are under long-term agreements in excess of one year, while others are negotiated on an annual or more frequent basis. Advertising allowances provided as a reimbursement of specific, incremental and identifiable costs incurred to promote a vendor’s products are included as an offset to Selling, general and administrative expenses (“SG&A”) when the cost is incurred. Volume rebates and allowances that do not meet the requirements for offsetting in SG&A are recorded as a reduction to inventory as they are earned based on inventory purchases. Total deferred vendor incentives recorded as a reduction of Inventories were $77.5 million and $82.4 million as of December 31, 2022 and January 1, 2022. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged directly to expense when incurred; major improvements are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the account balances, with any gain or loss reflected in the Consolidated Statements of Operations. Depreciation of land improvements, buildings, furniture, fixtures and equipment and vehicles is provided over the estimated useful lives of the respective assets using the straight-line method. Depreciation of building and leasehold improvements is provided over the shorter of the original useful lives of the respective assets or the term of the lease using the straight-line method. Goodwill and Other Indefinite-Lived Intangible Assets We perform our evaluation for the impairment of goodwill and other indefinite-lived intangible assets for our reporting units annually as of the first day of the fourth quarter, or when indications of potential impairment exist. These indicators would include a significant change in operating performance, the business climate, legal factors, competition, or a planned sale or disposition of a significant portion of the business, among other factors. Our evaluation of goodwill and other indefinite-lived intangibles may be a Step-0 analysis, which consists of a qualitative assessment, or a Step-1 analysis, which includes a quantitative assessment. In a Step-0 analysis, we assess qualitative factors such as current company performance and overall economic factors to determine if it is more-likely-than-not that the goodwill might be impaired and whether it is necessary to perform a quantitative goodwill impairment test. In the quantitative goodwill impairment test, we compare the carrying value of a reporting unit to its fair value. In performing a Step-1 analysis, we have historically used an income approach which requires many assumptions including forecast, discount rate, long-term growth rate, among other items. We have also utilized the market approach which derives metrics from comparable publicly-traded companies. We have generally engaged a third-party valuation firm to assist in the fair value assessment of goodwill. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the reporting unit's fair value. Our other indefinite-lived intangible assets are tested for impairment at the asset group level. Other indefinite-lived intangible assets are evaluated by comparing the carrying amount of the asset to the future discounted cash flows that the asset is expected to generate. If the fair value based on the future discounted cash flows exceeds the carrying value, we conclude that no intangible asset impairment has occurred. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, we recognize an impairment loss. We have four operating segments, defined as “Advance Auto Parts/Carquest U.S.,” “Carquest Canada,” “Worldpac” and “Independents.” As each operating segment represents a reporting unit, goodwill is assigned to each reporting unit. Valuation of Long-Lived Assets We evaluate the recoverability of our long-lived assets, including finite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable and exceeds its fair value. When such an event occurs, we estimate the undiscounted future cash flows expected to result from the use of the long-lived asset or asset group and its eventual disposition. These impairment evaluations involve estimates of asset useful lives and future cash flows. If the undiscounted expected future cash flows are less than the carrying amount of the asset and the carrying amount of the asset exceeds its fair value, an impairment loss is recognized. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis). Self-Insurance We are self-insured for general and automobile liability, workers’ compensation and health care claims of our team members, while maintaining stop-loss coverage with third-party insurers to limit our total liability exposure. Expenses associated with these liabilities are calculated for (i) claims filed, (ii) claims incurred but not yet reported and (iii) projected future claims using actuarial methods followed in the insurance industry as well as our historical claims experience. We include the current and long-term portions of self-insurance reserves in Accrued expenses and Other long-term liabilities in the accompanying Consolidated Balance Sheets. Leases We lease certain store locations, distribution centers, office spaces, equipment and vehicles. We recognize lease expense on a straight-line basis over the initial term of the lease unless external economic factors exist such that renewals are reasonably certain. In those instances, the renewal period would be included in the lease term to determine the period in which to recognize the lease expense. Most leases require us to pay non-lease components, such as taxes, maintenance, insurance and other certain costs applicable to the leased asset. For leases related to our store locations, distribution centers, office spaces and vehicles, we account for lease and non-lease components as a single amount. Fair Value Measurements A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. These two types of inputs create the following fair value hierarchy: Level 1 - Quoted prices for identical instruments in active markets; Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose significant inputs are observable; and Level 3 - Instruments whose significant inputs are unobservable. Financial instruments are transferred in and/or out of Level 1, 2 or 3 at the beginning of the accounting period in which there is a change in valuation inputs. Share-Based Payments We provide share-based compensation to our eligible team members and Board of Directors. We are required to exercise judgment and make estimates when determining the (i) fair value of each award granted and (ii) projected number of awards expected to vest. We calculate the fair value of all share-based awards at the date of grant and use the straight-line method to amortize this fair value as compensation cost over the requisite service period. Revenues Accounting Standards Codification 606, Revenue From Contracts With Customers (Topic 606) (“ASC 606”) defines a performance obligation as a promise in a contract to transfer a distinct good or service to the customer and is considered the unit of account. The majority of our contracts have one single performance obligation as the promise to transfer the individual goods is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Discounts and incentives are treated as separate performance obligations. We allocate the contract’s transaction price to each of these performance obligations separately using explicitly stated amounts or our best estimate using historical data. In accordance with ASC 606, revenue is recognized at the time the sale is made at which time our walk-in customers take immediate possession of the merchandise or same-day delivery is made to our professional delivery customers, which include certain independently owned store locations. Payment terms are established for our professional delivery customers based on pre-established credit requirements. Payment terms vary depending on the customer and generally range from one to 30 days. Based on the nature of receivables, no significant financing components exist. For e-commerce sales, revenue is recognized either at the time of pick-up at one of our store locations or at the time of shipment depending on the customer's order designation. Sales are recorded net of discounts, sales incentives and rebates, sales taxes, and estimated returns and allowances. We estimate the reduction to Net sales and Cost of sales for returns based on current sales levels and our historical return experience. We provide assurance-type warranty coverage primarily on batteries, brakes and struts whereby we are required to provide replacement product at no cost or a reduced cost for a set period of time. We estimate our warranty obligation at the time of sale based on the historical return experience, sales level and cost of the respective product sold. To the extent vendors provide upfront allowances in lieu of accepting the obligation for warranty claims and the allowance is in excess of the related warranty expense, the excess is recorded as a reduction to cost of sales. Some of our products include a core component, which represents a recyclable piece of the auto part. If a customer purchases an auto part that includes a core component, the customer is charged for the core unless a used core is returned at the time of sale. Customers that return a core subsequent to the sale date will be refunded. The following table summarizes financial information for each of our product groups: Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Percentage of Sales, by Product Group Parts and Batteries 66 % 67 % 66 % Accessories and Chemicals 20 20 21 Engine Maintenance 13 12 12 Other 1 1 1 Total 100 % 100 % 100 % Receivables, net, consists primarily of receivables from professional customers and is stated at net realizable value. We grant credit to certain professional customers who meet our pre-established credit requirements. We regularly review accounts receivable balances and maintain allowances for credit losses estimated whenever events or circumstances indicate the carrying value may not be recoverable. We consider the following factors when determining if collection is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic and industry trends and changes in customer payment terms. We control credit risk through credit approvals, credit limits and accounts receivable and credit monitoring procedures. Cost of Sales Cost of sales includes actual product cost, warranty costs, vendor incentives, cash discounts on payments to vendors, costs associated with operating our distribution network, including payroll and benefits costs, occupancy costs and depreciation, in-bound freight-related costs from our vendors, impairment of inventory resulting from store closures and inventory-related reserves and costs associated with moving merchandise inventories from our distribution centers to stores, branch locations and customers. Selling, General and Administrative Expenses SG&A includes payroll and benefits costs for store and corporate team members; occupancy costs of store and corporate facilities; depreciation and amortization related to store and corporate assets; share-based compensation expense; advertising; self-insurance; costs of consolidating, converting or closing facilities, including early termination of lease obligations; severance and impairment charges; professional services and costs associated with our professional delivery program, including payroll and benefits costs; and transportation expenses associated with moving merchandise inventories from stores and branches to customer locations. Preopening Expenses Preopening expenses, which consist primarily of payroll and occupancy costs related to the opening of new stores, are expensed as incurred. Advertising Costs We expense advertising costs as incurred. Advertising expense, net of qualifying vendor promotional funds, was $164.0 million, $178.0 million and $132.3 million in 2022, 2021 and 2020. Foreign Currency Translation The assets and liabilities of our foreign operations are translated into U.S. dollars at current exchange rates. Revenues, expenses, and cash flows are translated at average exchange rates for the year. Resulting translation adjustments are reflected as a separate component in the Consolidated Statements of Comprehensive Income. Foreign currency transactions, which are included in Other (expense) income, net, was a loss of $4.4 million in 2022, income of $1.7 million in 2021 and a loss of $6.9 million in 2020. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under the asset and liability method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income taxes reflect the net income tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and for income tax reporting purposes. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We recognize tax benefits and/or tax liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more-likely-than-not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts as we must determine the probability of various possible outcomes. We reevaluate these uncertain tax positions on a quarterly basis or when new information becomes available to management. The reevaluations are based on many factors, including but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit, expirations due to statutes of limitations and new federal or state audit activity. Any change in either our recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual. Earnings per Share Basic earnings per share of common stock has been computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by including the effect of dilutive securities. Diluted earnings per share of common stock reflects the weighted average number of shares of common stock outstanding, outstanding deferred stock units and the impact of outstanding stock awards (collectively “share-based awards”) if the conversion of these awards are dilutive. Share-based awards containing performance conditions are included in the dilution impact as those conditions are met. Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. Our CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by information about our four operating segments, for the purpose of allocating resources and evaluating financial performance. We have one reportable segment as the four operating segments are aggregated primarily due to the economic and operational similarities of each operating segment as the stores and branches have similar characteristics, including the nature of the products and services offered, customer base and the methods used to distribute products and provide services to its customers. Recently Issued Accounting Pronouncements - Not Yet Adopted Reference Rate Reform In March 2021, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which defers when companies will be required to find an alternative rate to LIBOR to December 31, 2024. ASU 2022-06 applies to all entities subject to meeting certain criteria that have contracts, hedging relationships or other transactions that include the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. We have modified current agreements to reference an alternative rate other than LIBOR, and do not believe it will have a material impact on our consolidated financial statements. Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”), which requires a company to disclose sufficient qualitative and quantitative information about any supplier finance program in which it participates as a buyer. In each annual reporting period, the company should disclose the key terms of the program, including a rollforward of those obligations outstanding at the beginning of the period. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the requirement on rollforward information, which is effective for fiscal years beginning after December 15, 2023. We are currently evaluating the impact of adopting ASU 2022-04 on our consolidated financial statements and related disclosures, and do not believe it will have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements - Adopted Credit Losses During the first quarter of 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which required us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaced the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements. Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes. ASU 2019-12 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. The adoption of this new standard did not have a material impact on our consolidated financial condition, results of operations or cash flows." |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, Net [Abstract] | |
Inventories | Inventories: We used the LIFO method of accounting for approximately 92.2% of Inventories at December 31, 2022 and 89.8% of Inventories at January 1, 2022. As a result of changes in the LIFO reserve, we recorded an increase to Cost of sales of $311.8 million and $122.3 million in 2022 and 2021 and a decrease to Cost of sales of $13.8 million in 2020. Purchasing and warehousing costs included in Inventories as of December 31, 2022 and January 1, 2022 were $637.1 million and $515.3 million. Inventory balances were as follows: December 31, 2022 January 1, 2022 Inventories at first-in, first-out (“FIFO”) $ 5,193,911 $ 4,625,900 Adjustments to state inventories at LIFO (278,649) 33,118 Inventories at LIFO $ 4,915,262 $ 4,659,018 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Other Intangible Assets, Net: Goodwill At December 31, 2022 and January 1, 2022, the carrying amount of Goodwill in the accompanying Consolidated Balance Sheets was $990.5 million and $993.7 million. The change in Goodwill during 2022 and 2021 was $3.3 million and $0.2 million, and related to foreign currency translation. Other Intangible Assets, Net Amortization expense was $31.0 million, $31.1 million and $31.6 million for 2022, 2021 and 2020. A summary of the composition of the gross carrying amounts and accumulated amortization of acquired other intangible assets are presented in the following table: December 31, 2022 January 1, 2022 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets: Customer relationships $ 349,428 $ (267,806) $ 81,622 $ 351,136 $ (239,302) $ 111,834 Non-compete and other 40,157 (38,051) 2,106 38,257 (37,844) 413 389,585 (305,857) 83,728 389,393 (277,146) 112,247 Indefinite-lived intangible assets: Brands, trademark and trade names 537,173 — 537,173 538,970 — 538,970 Total intangible assets $ 926,758 $ (305,857) $ 620,901 $ 928,363 $ (277,146) $ 651,217 Future Amortization Expense The expected amortization expense for the next five years and thereafter for acquired intangible assets recorded as of December 31, 2022 was as follows: Year Amount 2023 $ 28,357 2024 28,097 2025 26,602 2026 380 2027 292 Thereafter — $ 83,728 |
Receivables, net
Receivables, net | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Receivables, net | Receivables, net: Receivables, net, consisted of the following: December 31, 2022 January 1, 2022 Trade $ 576,548 $ 506,725 Vendor 126,640 201,933 Other 10,638 84,289 Total receivables 713,826 792,947 Less: allowance for credit losses (15,213) (10,162) Receivables, net $ 698,613 $ 782,785 |
Long-term Debt and Fair Value o
Long-term Debt and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Fair Value of Financial Instruments | Long-term Debt and Fair Value of Financial Instruments: Long-term debt consisted of the following: December 31, 2022 January 1, 2022 4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $453 at January 1, 2022) due December 1, 2023 $ — $ 193,220 1.75% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $3,053 and $3,618 at December 31, 2022 and January 1, 2022) due October 1, 2027 346,947 346,382 3.90% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $4,438 and $5,022 at December 31, 2022 and January 1, 2022) due April 15, 2030 495,562 494,718 3.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $4,226 at December 31, 2022 ) due March 15, 2032 345,774 — Revolver credit facility (interest rate of 7.5% as of December 31, 2022) 185,000 — 1,373,283 1,034,320 Less: Current portion of long-term debt (185,000) — Long-term debt, excluding the current portion $ 1,188,283 $ 1,034,320 Fair value of long-term debt $ 1,021,396 $ 1,092,000 Fair Value of Financial Assets and Liabilities The fair value of our senior unsecured notes was determined using Level 2 inputs based on quoted market prices. The carrying amounts of our Cash and cash equivalents, Receivables, net, Accounts payable and Accrued expenses approximate their fair values due to the relatively short-term nature of these instruments. Bank Debt On November 9, 2021, we entered into a credit agreement that provides a $1.2 billion unsecured revolving credit facility (the “2021 Credit Agreement”) with Advance Auto Parts, Inc., as Borrower, Advance Stores, as a Guarantor, the lenders party thereto, and Bank of America, N.A., as the Administrative Agent, and replaced the previous credit agreement. The revolver under the 2021 Credit Agreement replaced the revolver under the previous credit agreement. The revolver under the 2021 Credit Agreement provides for the issuance of letters of credit with a sublimit of $200.0 million. We may request that the total revolving commitment be increased by an amount not exceeding $500.0 million during the term of the 2021 Credit Agreement. As of December 31, 2022, we had $185.0 million outstanding borrowings under the 2021 Credit Agreement and borrowing availability was $1.0 billion. Under the 2021 Credit Agreement, we had no letters of credit outstanding as of December 31, 2022. As of January 1, 2022, we had no outstanding borrowings under the 2021 Credit Agreement and borrowing availability was $1.2 billion. Under the 2021 Credit Agreement, we had no letters of credit outstanding as of January 1, 2022. Interest on any borrowings on the 2021 Credit Agreement is based, at our option, on an adjusted LIBOR, plus a margin, or an alternate base rate, plus a margin. After an initial interest period, we may elect to convert a particular borrowing to a different type. The initial margins per annum for the revolving loan are 1.00% for the adjusted LIBOR and 0.00% for alternate base rate borrowings. A facility fee of 0.125% per annum is charged on the total revolving facility commitment, payable quarterly in arrears. Under the terms of the 2021 Credit Agreement, the interest rate spread and facility fee are based on our credit rating. The interest rate spread ranges from 0.795% to 1.30% for adjusted LIBOR borrowings and 0.00% to 0.30% for alternate base rate borrowings. The facility fee ranges from 0.08% to 0.20%. On February 27, 2023, we entered into Amendment No. 1 (the “Amendment”) to the 2021 Credit Agreement. The Amendment extends the maturity date of the 2021 Credit Agreement by one year from November 9, 2026, to November 9, 2027. The Amendment also replaces an adjusted LIBOR benchmark rate with a term secured overnight financing rate benchmark rate, as adjusted by an increase of ten basis points, plus the applicable margin under 2021 Credit Agreement. The Amendment made no other material changes to the terms of the 2021 Credit Agreement. Subsequent to December 31, 2022 and through the date of this filing, we had additional net borrowings on our revolving credit facility of $469 million. The 2021 Credit Agreement contains customary covenants restricting the ability of: (a) Advance Auto Parts, Inc. and its subsidiaries to, among other things, (i) create, incur or assume additional debt (only with respect to subsidiaries of Advance Auto Parts, Inc.), (ii) incur liens, (iii) guarantee obligations, and (iv) change the nature of their business; (b) Advance Auto Parts, Inc., Advance Stores and their subsidiaries to, among other things (i) enter into certain hedging arrangements, (ii) enter into restrictive agreements limiting their ability to incur liens on any of their property or assets, pay distributions, repay loans, or guarantee indebtedness of their subsidiaries; and (c) Advance Auto Parts, Inc., among other things, to change its holding company status. Advance is also required to comply with financial covenants with respect to a maximum leverage ratio and a minimum coverage ratio. The 2021 Credit Agreement also provides for customary events of default, including non-payment defaults, covenant defaults and cross-defaults of Advance’s other material indebtedness. We were in compliance with our financial covenants with respect to the 2021 Credit Agreement as of December 31, 2022. As of December 31, 2022 and January 1, 2022, we had $90.2 million and $92.0 million of bilateral letters of credit issued separately from the 2021 Credit Agreement, none of which were drawn upon. These bilateral letters of credit generally have a term of one year or less and primarily serve as collateral for our self-insurance policies. Senior Unsecured Notes Our 4.50% senior unsecured notes due December 1, 2023 (the “2023 Notes”) were issued in December 2013 at 99.69% of the principal amount of $450.0 million. The 2023 Notes bear interest, payable semi-annually in arrears on June 1 and December 1, at a rate of 4.50% per year. Pursuant to a cash tender offer that was completed on September 29, 2020, we repurchased $256.3 million of our 2023 Notes with the net proceeds from the 2027 Notes. In connection with this tender offer, we incurred charges relating to tender premiums and debt issuance costs of $30.5 million and $1.4 million. On April 4, 2022, we redeemed the remaining $193.2 million principal amount of our outstanding 2023 Notes with the net proceeds from the issuance of the 3.50% senior unsecured notes due March 15, 2032 (the “2032 Notes”). In connection with this early redemption, we incurred charges related to the make-whole provision and debt issuance costs of $7.0 million and $0.4 million. On April 16, 2020, we issued $500.0 million aggregate principal amount of senior unsecured notes (the “Original Notes”). The Original Notes were issued at 99.65% of the principal amount and mature April 15, 2030. The Original Notes bear interest, payable semi-annually in arrears on April 15 and October 15, at a rate of 3.90% per year. On July 28, 2020, we completed an exchange offer whereby the Original Notes in the aggregate principal amount of $500.0 million, which were not registered under the Securities Act of 1933, as amended (the “Securities Act”), were exchanged for a like principal amount of 3.90% senior unsecured notes due 2030 (the “Exchange Notes” or “2030 Notes”), which have been registered under the Securities Act. The Original Notes were substantially identical to the Exchange Notes, except that the Exchange Notes are registered under the Securities Act and are not subject to the transfer restrictions and certain registration rights agreement provisions applicable to the Original Notes. On September 16, 2020, we redeemed all $300.0 million aggregate principal amount of our outstanding 2022 Notes. In connection with this early redemption, we incurred charges relating to a make-whole provision and debt issuance costs of $15.8 million and $0.3 million. On September 29, 2020, we issued $350.0 million aggregate principal amount of senior unsecured notes (the “2027 Notes”). The 2027 Notes were issued at 99.67% of the principal amount, and are due October 1, 2027 and bear interest at 1.75% per year, payable semi-annually in arrears on April 1 and October 1 of each year. In connection with the 2027 Notes offering, we incurred $2.9 million of debt issuance costs. On March 4, 2022, we issued $350.0 million aggregate principal amount of senior unsecured notes. The 2032 Notes were issued at 99.61% of the principal amount and are due on March 15, 2032. The 2032 Notes bear interest, payable semi-annually in arrears on March 15 and September 15, at a rate of 3.50% per year. In connection with the 2032 Notes offering, we incurred $3.2 million of debt issuance costs. Our 2023 Notes, 2027 Notes, 2030 Notes and 2032 Notes are collectively referred to herein as our “senior unsecured notes” or the “Notes.” The terms of the 2023 Notes, 2027 Notes and 2032 notes are governed by an indenture dated as of April 29, 2010 (as amended, supplemented, waived or otherwise modified, the “2010 Indenture”) among Advance Auto Parts, Inc., the subsidiary guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee. The terms of the 2030 Notes are governed by an indenture dated as of April 16, 2020 (as amended, supplemented, waived or otherwise modified, the “2020 Indenture” and together with the 2010 Indenture, the “Indentures”) among Advance Auto Parts, Inc., the subsidiary guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee. We may redeem some or all of the senior unsecured notes at any time or from time to time, at the redemption prices described in the Indentures. In addition, in the event of a Change of Control Triggering Event (as defined in the Indentures), we will be required to offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the repurchase date. Currently, the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated and unsecured basis by guarantor and subsidiary guarantees, as defined by the Indenture. The Indentures contain customary provisions for events of default including for: (i) failure to pay principal or interest when due and payable; (ii) failure to comply with covenants or agreements in the Indentures or the Notes and failure to cure or obtain a waiver of such default upon notice; (iii) a default under any debt for money borrowed by us or any of our subsidiaries that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25.0 million without such debt having been discharged or acceleration having been rescinded or annulled within ten days after receipt by us of notice of the default by the Trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding; and (iv) events of bankruptcy, insolvency or reorganization affecting us and certain of its subsidiaries. In the case of an event of default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated. The Indentures also contain covenants limiting our ability to incur debt secured by liens and to enter into certain sale and lease-back transactions. Future Payments As of December 31, 2022, the aggregate future annual maturities of long-term debt instruments were as follows: Year Amount 2023 $ — 2024 — 2025 — 2026 — 2027 350,000 Thereafter 850,000 $ 1,200,000 Debt Guarantees We are a guarantor of loans made by banks to various independently owned Carquest-branded stores that are customers of ours totaling $96.9 million as of December 31, 2022. These loans are collateralized by security agreements on merchandise inventory and other assets of the borrowers. The approximate value of the inventory collateralized by these agreements was $174.6 million as of December 31, 2022. We believe that the likelihood of performance under these guarantees is remote. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property And Equipment | Property and Equipment: Property and equipment consisted of the following: Useful Lives December 31, 2022 January 1, 2022 Land and land improvements (1) 10 years $ 471,349 $ 471,101 Buildings 30 - 40 years 535,884 528,558 Building and leasehold improvements 3 - 15 years 722,006 602,515 Furniture, fixtures and equipment 3 - 20 years 2,398,818 2,196,099 Vehicles 3 years 14,549 14,593 Construction in progress 137,915 119,012 4,280,521 3,931,878 Less: Accumulated depreciation (2,590,382) (2,403,567) Property and equipment, net $ 1,690,139 $ 1,528,311 (1) Land is deemed to have an indefinite life. Depreciation expense relating to Property and equipment was $252.8 million, $228.8 million and $218.5 million for 2022, 2021 and 2020. We capitalized $41.5 million, $63.2 million and $58.4 million incurred for the development of internal use computer software during 2022, 2021 and 2020. These costs were classified in the Construction in progress category, but once three |
Leases and Other Commitments
Leases and Other Commitments | 12 Months Ended |
Dec. 31, 2022 | |
Leases and Other Commitments [Abstract] | |
Leases and Other Commitments | Leases and Other Commitments: Leases Substantially all of our leases are for facilities and vehicles. The initial term for facilities are typically five three Operating lease liabilities consisted of the following: December 31, 2022 January 1, 2022 Total operating lease liabilities $ 2,692,861 $ 2,802,772 Less: Current portion of operating lease liabilities (414,543) (465,121) Non-current operating lease liabilities $ 2,278,318 $ 2,337,651 The current portion of operating lease liabilities was included in Other current liabilities in the accompanying Consolidated Balance Sheets. Total lease cost was included in Cost of sales and SG&A in the accompanying Consolidated Statements of Operations and is recorded net of immaterial sublease income. Total lease cost comprised the following: Year Ended December 31, 2022 January 1, 2022 Operating lease cost $ 563,959 $ 538,323 Variable lease cost 171,621 148,130 Total lease cost $ 735,580 $ 686,453 The future maturity of lease liabilities are as follows: Year Amount 2023 $ 501,276 2024 523,097 2025 491,055 2026 381,295 2027 312,518 Thereafter 840,306 Total lease payments 3,049,547 Less: Imputed interest (356,686) Total operating lease liabilities $ 2,692,861 Operating lease liabilities included $45.2 million related to options to extend lease terms that are reasonably certain of being exercised and excluded $98.6 million of legally binding lease obligations for leases signed, but not yet commenced. The weighted average remaining lease term and weighted average discount rate for our operating leases were 6.9 years and 3.4% as of December 31, 2022. We calculated the weighted average discount rates using incremental borrowing rates, which equal the rates of interest that we would pay to borrow funds on a fully collateralized basis over a similar term. Other information relating to our lease liabilities were as follows: Year Ended December 31, 2022 January 1, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 624,484 $ 514,053 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 432,497 $ 726,326 Other Commitments We have entered into certain arrangements which require the future purchase of goods or services. Our obligations primarily consist of payments for the purchase of hardware, software and maintenance. As of December 31, 2022, future payments of these arrangements were $121.0 million and were not accrued in our Consolidated Balance Sheet. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses: Accrued expenses consisted of the following: December 31, 2022 January 1, 2022 Payroll and related benefits $ 155,441 $ 207,984 Taxes payable 106,712 111,380 Self-insurance reserves 72,337 53,424 Inventory related accruals 43,025 113,439 Accrued rebates 42,415 35,611 Accrued professional services/legal 22,317 18,448 Capital expenditures 8,927 14,369 Other 183,273 222,396 Total accrued expenses $ 634,447 $ 777,051 |
Share Repurchase Program
Share Repurchase Program | 12 Months Ended |
Dec. 31, 2022 | |
Share Repurchase Program [Abstract] | |
Share Repurchase Program | . Share Repurchase Program: In February 2022, our Board of Directors authorized an additional $1.0 billion toward the existing share repurchase program. Previously in April 2021 and November 2019, our Board of Directors authorized $1.0 billion and $700.0 million for our share repurchase program. Our share repurchase program permits the repurchase of our common stock on the open market and in privately negotiated transactions from time to time. The Board of Directors may increase or otherwise modify, renew, suspend or terminate the share repurchase program without prior notice. During 2022, we repurchased 3.0 million shares of our common stock at an aggregate cost of $598.2 million, or an average price of $201.88 per share, in connection with our share repurchase program. We had $947.3 million remaining under our share repurchase program as of December 31, 2022. During 2021, we repurchased 4.6 million shares of our common stock at an aggregate cost of $886.7 million or an average price of $192.92 per share, under our share repurchase program. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share: The computations of basic and diluted earnings per share were as follows: Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Numerator Net income applicable to common shares $ 501,872 $ 616,108 $ 493,021 Denominator Basic weighted average common shares 60,351 64,028 68,748 Dilutive impact of share-based awards 366 481 255 Diluted weighted average common shares (1) 60,717 64,509 69,003 Basic earnings per common share $ 8.32 $ 9.62 $ 7.17 Diluted earnings per common share $ 8.27 $ 9.55 $ 7.14 (1) For 2022, 2021 and 2020, restricted stock units (“RSUs”) excluded from the diluted calculation as their inclusion would have been anti-dilutive were 115 thousand |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: Provision for Income Taxes Provision for income taxes consisted of the following: Current Deferred Total 2022 Federal $ 95,784 $ 4,046 $ 99,830 State 17,531 3,919 21,450 Foreign 27,162 (1,627) 25,535 $ 140,477 $ 6,338 $ 146,815 2021 Federal $ 78,814 $ 55,467 $ 134,281 State 21,420 11,747 33,167 Foreign 21,381 988 22,369 $ 121,615 $ 68,202 $ 189,817 2020 Federal $ 112,096 $ 7,718 $ 119,814 State 23,779 1,066 24,845 Foreign 13,983 (648) 13,335 $ 149,858 $ 8,136 $ 157,994 The provision for income taxes differed from the amount computed by applying the federal statutory income tax rate due to: Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Income before provision for income taxes at statutory U.S. federal income tax rate (21% for 2022, 2021 and 2020) $ 136,224 $ 169,244 $ 136,713 State income taxes, net of federal income tax benefit 16,946 26,177 18,610 Other, net (6,355) (5,604) 2,671 Provision for income taxes $ 146,815 $ 189,817 $ 157,994 Deferred Income Tax Assets (Liabilities) Temporary differences that give rise to significant deferred income tax assets (liabilities) were as follows: December 31, 2022 January 1, 2022 Deferred income tax assets: Accrued expenses not currently deductible for tax $ 19,589 $ 38,133 Share-based compensation 12,642 12,431 Accrued medical and workers compensation 13,666 9,408 Net operating loss carryforwards 3,577 3,828 Operating lease liabilities 678,432 690,405 Other, net 9,291 6,986 Total deferred income tax assets before valuation allowances 737,197 761,191 Less: Valuation allowance (5,036) (3,015) Total deferred income tax assets 732,161 758,176 Deferred income tax liabilities: Property and equipment (130,899) (132,592) Inventories (226,499) (231,632) Intangible assets (137,464) (139,089) Operating lease right-of-use assets (653,296) (665,469) Total deferred income tax liabilities (1,148,158) (1,168,782) Net deferred income tax liabilities $ (415,997) $ (410,606) As of December 31, 2022 and January 1, 2022, our net operating loss (“NOL”) carryforwards comprised state NOLs of $108.9 million and $110.5 million. These NOLs may be used to reduce future taxable income and expire periodically through 2039. Due to uncertainties related to the realization of these NOLs in certain jurisdictions, as well as other credits available to us, we have recorded a valuation allowance of $3.0 million as of December 31, 2022 and January 1, 2022. In addition, we recorded a $2.0 million valuation allowance on foreign tax credit carryforwards as of December 31, 2022. The amount of deferred income tax assets realizable could change in the future if projections of future taxable income change. We have not recorded deferred taxes when earnings from foreign operations are considered to be indefinitely invested outside of the U.S. As of December 31, 2022 and January 1, 2022, these accumulated net earnings generated by our foreign operations were approximately $98.7 million and $75.5 million, which did not include earnings deemed to be repatriated as part of the U.S. Tax Cuts and Jobs Act. It is not practicable to determine the income tax liability that would be payable if such earnings were repatriated. Unrecognized Tax Benefits The following table summarizes the activity of our gross unrecognized tax benefits: December 31, 2022 January 1, 2022 January 2, 2021 Unrecognized tax benefits, beginning of period $ 19,139 $ 25,127 $ 29,762 Increases related to prior period tax positions 75 484 1,808 Decreases related to prior period tax positions (261) (849) — Increases related to current period tax positions 928 2,240 1,528 Settlements (256) (2,993) — Expiration of statute of limitations (6,254) (4,870) (7,971) Unrecognized tax benefits, end of period $ 13,371 $ 19,139 $ 25,127 As of December 31, 2022, January 1, 2022 and January 2, 2021, the entire amount of unrecognized tax benefits, if recognized, would reduce our annual effective tax rate of 22.6%, 23.6% and 24.3%. During 2022, 2021 and 2020, we recorded income tax-related interest and penalties of $0.6 million, $0.7 million and $0.2 million due to uncertain tax positions included in the Provision for income taxes in the accompanying Consolidated Statements of Operations. As of December 31, 2022 and January 1, 2022, we recorded a liability for potential interest of $2.7 million and $3.3 million and for potential penalties of $0.1 million for each year. We did not provide for any penalties associated with tax contingencies unless considered probable of assessment. We do not expect our unrecognized tax benefits to change significantly over the next 12 months. With few exceptions, we are no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2019. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies: Currently and from time to time, we are subject to litigation, claims and other disputes, including legal and regulatory proceedings, arising in the normal course of business. We record a loss contingency liability when a loss is considered probable and the amount can be reasonably estimated. Although the final outcome of pending legal matters cannot be determined, based on the facts presently known, it is management’s opinion that the final outcome of any pending matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. On February 6, 2018, a putative class action on behalf of purchasers of our securities who purchased or otherwise acquired their securities between November 14, 2016 and August 15, 2017, inclusive (the “Class Period”), was commenced against us and certain of our current and former officers in the U.S. District Court for the District of Delaware. The plaintiff alleged that the defendants failed to disclose material adverse facts about our financial well-being, business relationships, and prospects during the alleged Class Period in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On February 7, 2020, the court granted in part and denied in part our motion to dismiss. On November 6, 2020, the court granted the plaintiff’s motion for class certification. On March 15, 2021, we moved for reconsideration of the order denying in part our motion to dismiss, and on October 15, 2021, we filed a motion for summary judgment, seeking full dismissal of the case. Following mediation, on November 5, 2021, the parties executed a confidential binding term sheet to settle all claims and on December 23, 2021, the parties executed a settlement agreement fully documenting their agreement. The settlement agreement received final approval from the court on June 13, 2022. The settlement amount of $49.3 million was fully paid by our insurance carriers. Our Western Auto subsidiary, together with other defendants (including Advance and other of its subsidiaries), has been named as a defendant in lawsuits alleging injury as a result of exposure to asbestos-containing products. The plaintiffs have alleged that certain products contained asbestos and were manufactured, distributed and/or sold by the various defendants. Many of the cases pending against us are in the early stages of litigation. While the damages claimed against the defendants in some of these proceedings are substantial, we believe many of these claims are at least partially covered by insurance and historically asbestos claims against us have been inconsistent in fact patterns alleged and immaterial. We do not believe the cases currently pending will have a material adverse effect on our financial position, results of operations or cash flows. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Postemployment Benefits [Abstract] | |
Benefit Plans | Benefit Plans: 401(k) Plan We maintain a defined contribution benefit plan, which covers substantially all team members after one year of service and who have attained the age of 21. The plan allows for team member salary deferrals, which are matched at our discretion. Company contributions to these plans were $24.5 million, $27.3 million and $21.3 million in 2022, 2021 and 2020. Deferred Compensation We maintain a non-qualified deferred compensation plan for certain team members. This plan provides for a minimum and maximum deferral percentage of the team member’s base salary and bonus as determined by the Retirement Plan Committee. We established and maintain a deferred compensation liability for this plan. As of December 31, 2022 and January 1, 2022, these liabilities were $13.7 million and $15.0 million. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation: Overview We grant share-based compensation awards to our team members and members of our Board of Directors as provided for under our 2014 Long-Term Incentive Plan (“2014 LTIP”), which was approved by our stockholders on May 14, 2014. In 2022, 2021 and 2020, we granted share-based compensation in the form of RSUs or deferred stock units (“DSUs”). Our grants, which have three methods of measuring fair value, generally include a time-based service or a performance-based or a market-based portion, which collectively represent the target award. In 2022 and 2021, we also granted options to purchase common stock to certain employees under our 2014 LTIP. The options are granted at an exercise price equal to the closing market price of Advance's common stock on the date of the grant, expire after ten years and vest one-third annually over three years. We record compensation expense for the grant date fair value of the option awards evenly over the vesting period. At December 31, 2022, there were 4.2 million shares of common stock available for future issuance under the 2014 LTIP based on management’s current estimate of the probable vesting outcome for performance-based awards. Shares forfeited and shares withheld for payment of taxes due become available for reissuance and are included in availability. Restricted Stock Units For time-based RSUs, the fair value of each award was determined based on the market price of our common stock on the date of grant. Time-based RSUs generally vest over a three-year period in equal annual installments beginning on the first anniversary of the grant date. During the vesting period, holders of RSUs are entitled to receive dividend equivalents, but are not entitled to voting rights. For performance-based RSUs, the fair value of each award was determined based on the market price of our common stock on the date of grant. Performance-based awards generally may vest following a three-year period subject to our achievement of certain financial goals as specified in the grant agreements. Depending on our results during the three-year performance period, the actual number of awards vesting at the end of the period generally ranges from 0% to 200% of the performance award. Performance-based RSUs generally do not have dividend equivalent rights and do not have voting rights until the shares are earned and issued following the applicable performance period. The number of performance-based awards outstanding is based on the number of awards that we believed were probable of vesting at December 31, 2022. There were no performance-based RSUs granted during 2022 or 2021. The change in units based on performance represents the change in the number of granted awards expected to vest based on the updated probability assessment as of December 31, 2022. Compensation expense for performance-based awards of $11.8 million, $22.8 million and $9.4 million in 2022, 2021 and 2020 was determined based on management’s estimate of the probable vesting outcome. For market-based RSUs, the fair value of each award was determined using a Monte Carlo simulation model. The model uses multiple input variables that determined the probability of satisfying the market condition requirements as follows: 2022 2021 2020 Risk-free interest rate (1) 1.6 % 0.3 % 0.9 % Expected dividend yield — % — % 0.8 % Expected stock price volatility (2) 34.6 % 36.0 % 34.0 % (1) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate having a term consistent with the vesting period of the award. (2) Expected volatility is determined based on historical volatility over a matching look-back period and is consistent with the correlation coefficients between our stock prices and our peer group. Additionally, we estimated a liquidity discount of 9.2% using the Chaffe Model to adjust the fair value for the post-vest restrictions. Vesting of market-based RSUs depends on our relative total shareholder return among a designated group of peer companies during a three-year period and will be subject to a one-year holding period after vesting. The following table summarizes activity for time-based, performance-based and market-based RSUs in 2022: Time-Based Performance-Based Market-Based Number of Awards Weighted Average Number of Awards Weighted Average Number of Awards Weighted Average Nonvested at January 1, 2022 466 $ 162.33 197 $ 142.23 112 $ 179.66 Granted 209 $ 196.61 — $ — 57 $ 205.52 Change in units based on performance — $ — (6) $ 119.95 — $ — Vested (1) (219) $ 158.06 (78) $ 160.38 (22) $ 165.84 Forfeited (62) $ 178.04 (8) $ 132.01 (12) $ 193.42 Nonvested at December 31, 2022 394 $ 180.41 105 $ 130.88 135 $ 191.72 (1) The vested shares of market-based RSUs were not exercised due to low multiplier effect for 2019 awards. The following table summarizes certain information concerning activity for time-based, performance-based and market-based RSUs: Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Time-based: Weighted average fair value of RSUs granted $ 196.61 $ 183.41 $ 137.47 Total grant date fair value of RSUs vested $ 34,685 $ 34,555 $ 30,231 Performance-based: Weighted average fair value of RSUs granted $ — $ — $ 130.03 Total grant date fair value of RSUs vested $ 12,460 $ 7,987 $ 1,123 Market-based: Weighted average fair value of RSUs granted $ 205.52 $ 204.97 $ 145.04 Total grant date fair value of RSUs vested $ 3,695 $ 3,650 $ 2,646 As of December 31, 2022, the maximum potential payout under our currently outstanding performance-based and market-based RSUs were 120 thousand and 271 thousand units. Stock Options In 2022, we granted 114 thousand stock options where the weighted average fair value of stock options granted was $53.98 per share. The fair value was estimated on the date of grant by applying the Black-Scholes-Merton option-pricing valuation model. The following table includes summary information for stock options as of December 31, 2022: Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at January 1, 2022 111 $ 176.50 Granted 114 $ 204.48 Exercised (3) $ 176.50 Forfeited (16) $ 192.75 Outstanding at December 31, 2022 206 $ 190.75 8.6 $ — Exercisable at December 31, 2022 34 $ 176.50 7.9 $ — The following table presents the weighted average assumptions used in determining the fair value of options granted: Year Ended December 31, 2022 Risk-free interest rate (1) 1.90% Expected life (2) 6 years Expected volatility (3) 34.0% Expected dividend yield (4) 2.60% (1) The risk-free interest rate is based on the yield in effect at grant for zero-coupon U.S. Treasury notes with maturities equivalent to the expected term of the stock options. (2) The expected term represents the period of time options granted are expected to be outstanding. As we do not have sufficient historical data, we utilized the simplified method provided by the Securities and Exchange Commission to calculate the expected term as the average of the contractual term and vesting period. (3) Expected volatility is the measure of the amount by which the stock price has fluctuated or is expected to fluctuate. We utilized historical trends and the implied volatility of our publicly traded financial instruments in developing the volatility estimate for our stock options. (4) The expected dividend yield is calculated based on our expected quarterly dividend and the three-month average stock price as of the grant date. Other Considerations Total income tax benefit related to share-based compensation expense for 2022, 2021 and 2020 was $12.5 million, $15.2 million and $11.5 million. As of December 31, 2022, there was $65.5 million of unrecognized compensation expense related to all share-based awards that is expected to be recognized over a weighted average period of 1.45 years. Deferred Stock Units We grant share-based awards annually to our Board of Directors in connection with our annual meeting of stockholders. These awards are granted in the form of DSUs as provided for in the Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors and Selected Executives (“DSU Plan”) . Each DSU is equivalent to one share of our common stock and will be distributed in common shares after the director’s service on the Board ends. DSUs granted vest over a one-year service period. Additionally, the DSU Plan provides for the deferral of compensation earned in the form of (i) an annual retainer for directors and (ii) wages for certain highly compensated team members. These DSUs are settled in common stock with the participants at a future date, or over a specified time period, as elected by the participants in accordance with the DSU Plan. We granted 9 thousand, 10 thousand and 12 thousand DSUs in 2022, 2021, and 2020. The weighted average fair value of DSUs granted during 2022, 2021 and 2020 was $193.05, $191.24 and $130.14. The DSUs were awarded at a price equal to the market price of our underlying common stock on the date of the grant. For 2022, 2021 and 2020, we recognized $1.7 million, $1.6 million and $1.6 million of share-based compensation expense for these DSU grants. Employee Stock Purchase Plan We also offer an employee stock purchase plan (“ESPP”). Under the ESPP, eligible team members may elect salary deferrals to purchase our common stock at a discount of 10% from its fair market value on the date of purchase. There are annual limitations on the amounts a team member may elect of either $25 thousand per team member or 10% of compensation, whichever is less. As of December 31, 2022, there were 0.9 million shares available to be issued under the ESPP. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss: Accumulated other comprehensive loss, net of tax, consisted of the following: Unrealized Gain (Loss) on Foreign Currency Translation Accumulated Other Comprehensive Balance, December 28, 2019 $ 1,322 $ (35,891) $ (34,569) 2020 activity (152) 7,962 7,810 Balance, January 2, 2021 1,170 (27,929) (26,759) 2021 activity (264) 4,396 4,132 Balance, January 1, 2022 906 (23,533) (22,627) 2022 activity (186) (22,330) (22,516) Balance, December 31, 2022 $ 720 $ (45,863) $ (45,143) |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Advance Auto Parts, Inc. Schedule II - Valuation and Qualifying Accounts (in thousands) Allowance for credit losses Balance at Beginning of Period Charges to Expenses Deductions (1) Balance at End of Period January 2, 2021 $ 14,249 $ 14,933 $ (17,253) $ 11,929 January 1, 2022 $ 11,929 $ 11,125 $ (12,892) $ 10,162 December 31, 2022 $ 10,162 $ 24,399 $ (19,348) $ 15,213 (1) Accounts written off during the period. These amounts did not impact our Statements of Operations for any year presented. Other valuation and qualifying accounts have not been reported in this schedule because they are either not applicable or because the information has been included elsewhere in this report . |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Accounting Period | Accounting Period Our fiscal year ends on the Saturday closest to December 31 st . All references herein for the years “2022,” “2021” and “2020” represent the fiscal years ended December 31, 2022 and January 1, 2022, which consisted of fifty-two weeks, and fiscal year ended January 2, 2021, which consisted of fifty-three weeks. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Advance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and highly-liquid instruments with original maturities of three months or less. Additionally, credit card and debit card receivables from banks, which generally settle in less than four business days, are included in cash equivalents. |
Inventory | Inventory Our inventory consists primarily of parts, batteries, accessories and other products used on vehicles that have reasonably long shelf lives and is stated at the lower of cost or market. The cost of our merchandise inventory is primarily determined using the last-in, first-out (“LIFO”) method. Under the LIFO method, our cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs relating to prices paid in 2022 and prior years. We regularly review inventory quantities on-hand, consider whether we may have excess inventory based on our current approach for managing slower moving inventory and adjust the carrying value as necessary. |
Vendor Incentives | Vendor Incentives We receive incentives in the form of reductions to amounts owed to and/or payments from vendors related to volume rebates and other promotional considerations. Many of these incentives are under long-term agreements in excess of one year, while others are negotiated on an annual or more frequent basis. Advertising allowances provided as a reimbursement of specific, incremental and identifiable costs incurred to promote a vendor’s products are included as an offset to Selling, general and administrative expenses (“SG&A”) when the cost is incurred. Volume rebates and allowances that do not meet the requirements for offsetting in SG&A are recorded as a reduction to inventory as they are earned based on inventory purchases. Total deferred vendor incentives recorded as a reduction of Inventories were $77.5 million and $82.4 million as of December 31, 2022 and January 1, 2022. |
Preopening Expenses | Preopening Expenses Preopening expenses, which consist primarily of payroll and occupancy costs related to the opening of new stores, are expensed as incurred. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged directly to expense when incurred; major improvements are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the account balances, with any gain or loss reflected in the Consolidated Statements of Operations. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Other Indefinite-Lived Intangible Assets We perform our evaluation for the impairment of goodwill and other indefinite-lived intangible assets for our reporting units annually as of the first day of the fourth quarter, or when indications of potential impairment exist. These indicators would include a significant change in operating performance, the business climate, legal factors, competition, or a planned sale or disposition of a significant portion of the business, among other factors. Our evaluation of goodwill and other indefinite-lived intangibles may be a Step-0 analysis, which consists of a qualitative assessment, or a Step-1 analysis, which includes a quantitative assessment. In a Step-0 analysis, we assess qualitative factors such as current company performance and overall economic factors to determine if it is more-likely-than-not that the goodwill might be impaired and whether it is necessary to perform a quantitative goodwill impairment test. In the quantitative goodwill impairment test, we compare the carrying value of a reporting unit to its fair value. In performing a Step-1 analysis, we have historically used an income approach which requires many assumptions including forecast, discount rate, long-term growth rate, among other items. We have also utilized the market approach which derives metrics from comparable publicly-traded companies. We have generally engaged a third-party valuation firm to assist in the fair value assessment of goodwill. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the reporting unit's fair value. Our other indefinite-lived intangible assets are tested for impairment at the asset group level. Other indefinite-lived intangible assets are evaluated by comparing the carrying amount of the asset to the future discounted cash flows that the asset is expected to generate. If the fair value based on the future discounted cash flows exceeds the carrying value, we conclude that no intangible asset impairment has occurred. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, we recognize an impairment loss. |
Valuation of Long-Lived Assets | Valuation of Long-Lived AssetsWe evaluate the recoverability of our long-lived assets, including finite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable and exceeds its fair value. When such an event occurs, we estimate the undiscounted future cash flows expected to result from the use of the long-lived asset or asset group and its eventual disposition. These impairment evaluations involve estimates of asset useful lives and future cash flows. If the undiscounted expected future cash flows are less than the carrying amount of the asset and the carrying amount of the asset exceeds its fair value, an impairment loss is recognized. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis). |
Self-Insurance | Self-InsuranceWe are self-insured for general and automobile liability, workers’ compensation and health care claims of our team members, while maintaining stop-loss coverage with third-party insurers to limit our total liability exposure. Expenses associated with these liabilities are calculated for (i) claims filed, (ii) claims incurred but not yet reported and (iii) projected future claims using actuarial methods followed in the insurance industry as well as our historical claims experience. We include the current and long-term portions of self-insurance reserves in Accrued expenses and Other long-term liabilities in the accompanying Consolidated Balance Sheets. |
Leases | Leases We lease certain store locations, distribution centers, office spaces, equipment and vehicles. We recognize lease expense on a straight-line basis over the initial term of the lease unless external economic factors exist such that renewals are reasonably certain. In those instances, the renewal period would be included in the lease term to determine the period in which to recognize the lease expense. Most leases require us to pay non-lease components, such as taxes, maintenance, insurance and other certain costs applicable to the leased asset. For leases related to our store locations, distribution centers, office spaces and vehicles, we account for lease and non-lease components as a single amount. |
Fair Value Measurements | Fair Value Measurements |
Share-Based Payments | Share-Based PaymentsWe provide share-based compensation to our eligible team members and Board of Directors. We are required to exercise judgment and make estimates when determining the (i) fair value of each award granted and (ii) projected number of awards expected to vest. We calculate the fair value of all share-based awards at the date of grant and use the straight-line method to amortize this fair value as compensation cost over the requisite service period. |
Revenue Recognition | Revenues Accounting Standards Codification 606, Revenue From Contracts With Customers (Topic 606) (“ASC 606”) defines a performance obligation as a promise in a contract to transfer a distinct good or service to the customer and is considered the unit of account. The majority of our contracts have one single performance obligation as the promise to transfer the individual goods is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Discounts and incentives are treated as separate performance obligations. We allocate the contract’s transaction price to each of these performance obligations separately using explicitly stated amounts or our best estimate using historical data. In accordance with ASC 606, revenue is recognized at the time the sale is made at which time our walk-in customers take immediate possession of the merchandise or same-day delivery is made to our professional delivery customers, which include certain independently owned store locations. Payment terms are established for our professional delivery customers based on pre-established credit requirements. Payment terms vary depending on the customer and generally range from one to 30 days. Based on the nature of receivables, no significant financing components exist. For e-commerce sales, revenue is recognized either at the time of pick-up at one of our store locations or at the time of shipment depending on the customer's order designation. Sales are recorded net of discounts, sales incentives and rebates, sales taxes, and estimated returns and allowances. We estimate the reduction to Net sales and Cost of sales for returns based on current sales levels and our historical return experience. We provide assurance-type warranty coverage primarily on batteries, brakes and struts whereby we are required to provide replacement product at no cost or a reduced cost for a set period of time. We estimate our warranty obligation at the time of sale based on the historical return experience, sales level and cost of the respective product sold. To the extent vendors provide upfront allowances in lieu of accepting the obligation for warranty claims and the allowance is in excess of the related warranty expense, the excess is recorded as a reduction to cost of sales. |
Receivables | Receivables, net, consists primarily of receivables from professional customers and is stated at net realizable value. We grant credit to certain professional customers who meet our pre-established credit requirements. We regularly review accounts receivable balances and maintain allowances for credit losses estimated whenever events or circumstances indicate the carrying value may not be recoverable. We consider the following factors when determining if collection is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic and industry trends and changes in customer payment terms. We control credit risk through credit approvals, credit limits and accounts receivable and credit monitoring procedures. |
Cost of Sales | Cost of Sales Cost of sales includes actual product cost, warranty costs, vendor incentives, cash discounts on payments to vendors, costs associated with operating our distribution network, including payroll and benefits costs, occupancy costs and depreciation, in-bound freight-related costs from our vendors, impairment of inventory resulting from store closures and inventory-related reserves and costs associated with moving merchandise inventories from our distribution centers to stores, branch locations and customers. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses SG&A includes payroll and benefits costs for store and corporate team members; occupancy costs of store and corporate facilities; depreciation and amortization related to store and corporate assets; share-based compensation expense; advertising; self-insurance; costs of consolidating, converting or closing facilities, including early termination of lease obligations; severance and impairment charges; professional services and costs associated with our professional delivery program, including |
Advertising Costs | Advertising Costs We expense advertising costs as incurred. Advertising expense, net of qualifying vendor promotional funds, was $164.0 million, $178.0 million and $132.3 million in 2022, 2021 and 2020. |
Foreign Currency Translation | Foreign Currency Translation The assets and liabilities of our foreign operations are translated into U.S. dollars at current exchange rates. Revenues, expenses, and cash flows are translated at average exchange rates for the year. Resulting translation adjustments are reflected as a separate component in the Consolidated Statements of Comprehensive Income. Foreign currency transactions, which are included in Other (expense) income, net, was a loss of $4.4 million in 2022, income of $1.7 million in 2021 and a loss of $6.9 million in 2020. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under the asset and liability method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income taxes reflect the net income tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and for income tax reporting purposes. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We recognize tax benefits and/or tax liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more-likely-than-not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts as we must determine the probability of various possible outcomes. |
Earnings per Share | Earnings per Share Basic earnings per share of common stock has been computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by including the effect of dilutive securities. Diluted earnings per share of common stock reflects the weighted average number of shares of common stock outstanding, outstanding deferred stock units and the impact of outstanding stock awards (collectively “share-based awards”) if the conversion of these awards are dilutive. Share-based awards containing performance conditions are included in the dilution impact as those conditions are met. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. Our CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by information about our four operating segments, for the purpose of allocating resources and evaluating financial performance. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements - Not Yet Adopted Reference Rate Reform In March 2021, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which defers when companies will be required to find an alternative rate to LIBOR to December 31, 2024. ASU 2022-06 applies to all entities subject to meeting certain criteria that have contracts, hedging relationships or other transactions that include the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. We have modified current agreements to reference an alternative rate other than LIBOR, and do not believe it will have a material impact on our consolidated financial statements. Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”), which requires a company to disclose sufficient qualitative and quantitative information about any supplier finance program in which it participates as a buyer. In each annual reporting period, the company should disclose the key terms of the program, including a rollforward of those obligations outstanding at the beginning of the period. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the requirement on rollforward information, which is effective for fiscal years beginning after December 15, 2023. We are currently evaluating the impact of adopting ASU 2022-04 on our consolidated financial statements and related disclosures, and do not believe it will have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements - Adopted Credit Losses During the first quarter of 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which required us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaced the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements. Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes. ASU 2019-12 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. The adoption of this new standard did not have a material impact on our consolidated financial condition, results of operations or cash flows." |
Internal Use Software | We capitalized $41.5 million, $63.2 million and $58.4 million incurred for the development of internal use computer software during 2022, 2021 and 2020. These costs were classified in the Construction in progress category, but once placed into service is removed from Construction in progress and classified within the Furniture, fixtures and equipment category and is depreciated on the straight-line method over three |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Revenue From External Customers By Products And Services | The following table summarizes financial information for each of our product groups: Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Percentage of Sales, by Product Group Parts and Batteries 66 % 67 % 66 % Accessories and Chemicals 20 20 21 Engine Maintenance 13 12 12 Other 1 1 1 Total 100 % 100 % 100 % |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, Net [Abstract] | |
Schedule Of Inventory | Inventory balances were as follows: December 31, 2022 January 1, 2022 Inventories at first-in, first-out (“FIFO”) $ 5,193,911 $ 4,625,900 Adjustments to state inventories at LIFO (278,649) 33,118 Inventories at LIFO $ 4,915,262 $ 4,659,018 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Indefinite-Lived Intangible Assets | A summary of the composition of the gross carrying amounts and accumulated amortization of acquired other intangible assets are presented in the following table: December 31, 2022 January 1, 2022 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets: Customer relationships $ 349,428 $ (267,806) $ 81,622 $ 351,136 $ (239,302) $ 111,834 Non-compete and other 40,157 (38,051) 2,106 38,257 (37,844) 413 389,585 (305,857) 83,728 389,393 (277,146) 112,247 Indefinite-lived intangible assets: Brands, trademark and trade names 537,173 — 537,173 538,970 — 538,970 Total intangible assets $ 926,758 $ (305,857) $ 620,901 $ 928,363 $ (277,146) $ 651,217 |
Schedule Of Expected Amortization Expense | The expected amortization expense for the next five years and thereafter for acquired intangible assets recorded as of December 31, 2022 was as follows: Year Amount 2023 $ 28,357 2024 28,097 2025 26,602 2026 380 2027 292 Thereafter — $ 83,728 |
Receivables, net (Tables)
Receivables, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule Of Accounts Receivable | Receivables, net, consisted of the following: December 31, 2022 January 1, 2022 Trade $ 576,548 $ 506,725 Vendor 126,640 201,933 Other 10,638 84,289 Total receivables 713,826 792,947 Less: allowance for credit losses (15,213) (10,162) Receivables, net $ 698,613 $ 782,785 |
Long-term Debt and Fair Value_2
Long-term Debt and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt | Long-term debt consisted of the following: December 31, 2022 January 1, 2022 4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $453 at January 1, 2022) due December 1, 2023 $ — $ 193,220 1.75% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $3,053 and $3,618 at December 31, 2022 and January 1, 2022) due October 1, 2027 346,947 346,382 3.90% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $4,438 and $5,022 at December 31, 2022 and January 1, 2022) due April 15, 2030 495,562 494,718 3.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $4,226 at December 31, 2022 ) due March 15, 2032 345,774 — Revolver credit facility (interest rate of 7.5% as of December 31, 2022) 185,000 — 1,373,283 1,034,320 Less: Current portion of long-term debt (185,000) — Long-term debt, excluding the current portion $ 1,188,283 $ 1,034,320 Fair value of long-term debt $ 1,021,396 $ 1,092,000 |
Schedule Of Maturities Of Long-term Debt | As of December 31, 2022, the aggregate future annual maturities of long-term debt instruments were as follows: Year Amount 2023 $ — 2024 — 2025 — 2026 — 2027 350,000 Thereafter 850,000 $ 1,200,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment consisted of the following: Useful Lives December 31, 2022 January 1, 2022 Land and land improvements (1) 10 years $ 471,349 $ 471,101 Buildings 30 - 40 years 535,884 528,558 Building and leasehold improvements 3 - 15 years 722,006 602,515 Furniture, fixtures and equipment 3 - 20 years 2,398,818 2,196,099 Vehicles 3 years 14,549 14,593 Construction in progress 137,915 119,012 4,280,521 3,931,878 Less: Accumulated depreciation (2,590,382) (2,403,567) Property and equipment, net $ 1,690,139 $ 1,528,311 (1) Land is deemed to have an indefinite life. |
Leases and Other Commitments (T
Leases and Other Commitments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases and Other Commitments [Abstract] | |
Schedule of Operating Lease Liabilities | Operating lease liabilities consisted of the following: December 31, 2022 January 1, 2022 Total operating lease liabilities $ 2,692,861 $ 2,802,772 Less: Current portion of operating lease liabilities (414,543) (465,121) Non-current operating lease liabilities $ 2,278,318 $ 2,337,651 |
Lease, Cost | Total lease cost comprised the following: Year Ended December 31, 2022 January 1, 2022 Operating lease cost $ 563,959 $ 538,323 Variable lease cost 171,621 148,130 Total lease cost $ 735,580 $ 686,453 |
Lessee, Operating Lease, Liability, Maturity | The future maturity of lease liabilities are as follows: Year Amount 2023 $ 501,276 2024 523,097 2025 491,055 2026 381,295 2027 312,518 Thereafter 840,306 Total lease payments 3,049,547 Less: Imputed interest (356,686) Total operating lease liabilities $ 2,692,861 |
Schedule of Other Information Relating to Lease Liabilities | Other information relating to our lease liabilities were as follows: Year Ended December 31, 2022 January 1, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 624,484 $ 514,053 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 432,497 $ 726,326 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule Of Accrued Liabilities | Accrued expenses consisted of the following: December 31, 2022 January 1, 2022 Payroll and related benefits $ 155,441 $ 207,984 Taxes payable 106,712 111,380 Self-insurance reserves 72,337 53,424 Inventory related accruals 43,025 113,439 Accrued rebates 42,415 35,611 Accrued professional services/legal 22,317 18,448 Capital expenditures 8,927 14,369 Other 183,273 222,396 Total accrued expenses $ 634,447 $ 777,051 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule Of Earnings Per Share, Basic And Diluted | The computations of basic and diluted earnings per share were as follows: Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Numerator Net income applicable to common shares $ 501,872 $ 616,108 $ 493,021 Denominator Basic weighted average common shares 60,351 64,028 68,748 Dilutive impact of share-based awards 366 481 255 Diluted weighted average common shares (1) 60,717 64,509 69,003 Basic earnings per common share $ 8.32 $ 9.62 $ 7.17 Diluted earnings per common share $ 8.27 $ 9.55 $ 7.14 (1) For 2022, 2021 and 2020, restricted stock units (“RSUs”) excluded from the diluted calculation as their inclusion would have been anti-dilutive were 115 thousand |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Provision For Income Taxes, Current And Deferred | Provision for income taxes consisted of the following: Current Deferred Total 2022 Federal $ 95,784 $ 4,046 $ 99,830 State 17,531 3,919 21,450 Foreign 27,162 (1,627) 25,535 $ 140,477 $ 6,338 $ 146,815 2021 Federal $ 78,814 $ 55,467 $ 134,281 State 21,420 11,747 33,167 Foreign 21,381 988 22,369 $ 121,615 $ 68,202 $ 189,817 2020 Federal $ 112,096 $ 7,718 $ 119,814 State 23,779 1,066 24,845 Foreign 13,983 (648) 13,335 $ 149,858 $ 8,136 $ 157,994 |
Schedule Of Effective Income Tax Rate Reconciliation | The provision for income taxes differed from the amount computed by applying the federal statutory income tax rate due to: Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Income before provision for income taxes at statutory U.S. federal income tax rate (21% for 2022, 2021 and 2020) $ 136,224 $ 169,244 $ 136,713 State income taxes, net of federal income tax benefit 16,946 26,177 18,610 Other, net (6,355) (5,604) 2,671 Provision for income taxes $ 146,815 $ 189,817 $ 157,994 |
Schedule Of Deferred Tax Assets and Liabilities | Temporary differences that give rise to significant deferred income tax assets (liabilities) were as follows: December 31, 2022 January 1, 2022 Deferred income tax assets: Accrued expenses not currently deductible for tax $ 19,589 $ 38,133 Share-based compensation 12,642 12,431 Accrued medical and workers compensation 13,666 9,408 Net operating loss carryforwards 3,577 3,828 Operating lease liabilities 678,432 690,405 Other, net 9,291 6,986 Total deferred income tax assets before valuation allowances 737,197 761,191 Less: Valuation allowance (5,036) (3,015) Total deferred income tax assets 732,161 758,176 Deferred income tax liabilities: Property and equipment (130,899) (132,592) Inventories (226,499) (231,632) Intangible assets (137,464) (139,089) Operating lease right-of-use assets (653,296) (665,469) Total deferred income tax liabilities (1,148,158) (1,168,782) Net deferred income tax liabilities $ (415,997) $ (410,606) |
Unrecognized Tax Benefits | The following table summarizes the activity of our gross unrecognized tax benefits: December 31, 2022 January 1, 2022 January 2, 2021 Unrecognized tax benefits, beginning of period $ 19,139 $ 25,127 $ 29,762 Increases related to prior period tax positions 75 484 1,808 Decreases related to prior period tax positions (261) (849) — Increases related to current period tax positions 928 2,240 1,528 Settlements (256) (2,993) — Expiration of statute of limitations (6,254) (4,870) (7,971) Unrecognized tax benefits, end of period $ 13,371 $ 19,139 $ 25,127 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule Of Share-based Payment Award Valuation Assumptions | For market-based RSUs, the fair value of each award was determined using a Monte Carlo simulation model. The model uses multiple input variables that determined the probability of satisfying the market condition requirements as follows: 2022 2021 2020 Risk-free interest rate (1) 1.6 % 0.3 % 0.9 % Expected dividend yield — % — % 0.8 % Expected stock price volatility (2) 34.6 % 36.0 % 34.0 % (1) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate having a term consistent with the vesting period of the award. (2) Expected volatility is determined based on historical volatility over a matching look-back period and is consistent with the correlation coefficients between our stock prices and our peer group. |
Restricted Stock Units Activity | The following table summarizes activity for time-based, performance-based and market-based RSUs in 2022: Time-Based Performance-Based Market-Based Number of Awards Weighted Average Number of Awards Weighted Average Number of Awards Weighted Average Nonvested at January 1, 2022 466 $ 162.33 197 $ 142.23 112 $ 179.66 Granted 209 $ 196.61 — $ — 57 $ 205.52 Change in units based on performance — $ — (6) $ 119.95 — $ — Vested (1) (219) $ 158.06 (78) $ 160.38 (22) $ 165.84 Forfeited (62) $ 178.04 (8) $ 132.01 (12) $ 193.42 Nonvested at December 31, 2022 394 $ 180.41 105 $ 130.88 135 $ 191.72 (1) The vested shares of market-based RSUs were not exercised due to low multiplier effect for 2019 awards. |
Restricted Stock Units Activity Additional Information | Year Ended December 31, 2022 January 1, 2022 January 2, 2021 Time-based: Weighted average fair value of RSUs granted $ 196.61 $ 183.41 $ 137.47 Total grant date fair value of RSUs vested $ 34,685 $ 34,555 $ 30,231 Performance-based: Weighted average fair value of RSUs granted $ — $ — $ 130.03 Total grant date fair value of RSUs vested $ 12,460 $ 7,987 $ 1,123 Market-based: Weighted average fair value of RSUs granted $ 205.52 $ 204.97 $ 145.04 Total grant date fair value of RSUs vested $ 3,695 $ 3,650 $ 2,646 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive loss, net of tax, consisted of the following: Unrealized Gain (Loss) on Foreign Currency Translation Accumulated Other Comprehensive Balance, December 28, 2019 $ 1,322 $ (35,891) $ (34,569) 2020 activity (152) 7,962 7,810 Balance, January 2, 2021 1,170 (27,929) (26,759) 2021 activity (264) 4,396 4,132 Balance, January 1, 2022 906 (23,533) (22,627) 2022 activity (186) (22,330) (22,516) Balance, December 31, 2022 $ 720 $ (45,863) $ (45,143) |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Allowance for doubtful accounts receivable | Allowance for credit losses Balance at Beginning of Period Charges to Expenses Deductions (1) Balance at End of Period January 2, 2021 $ 14,249 $ 14,933 $ (17,253) $ 11,929 January 1, 2022 $ 11,929 $ 11,125 $ (12,892) $ 10,162 December 31, 2022 $ 10,162 $ 24,399 $ (19,348) $ 15,213 (1) Accounts written off during the period. These amounts did not impact our Statements of Operations for any year presented. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) | Dec. 31, 2022 store |
Stores [Member] | |
Nature of Operations and Basis of Presentation [Line Items] | |
Number of Stores | 4,770 |
Branches [Member] | |
Nature of Operations and Basis of Presentation [Line Items] | |
Number of Stores | 316 |
Independently-owned Carquest store locations [Member] | |
Nature of Operations and Basis of Presentation [Line Items] | |
Number of Stores | 1,311 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Jan. 01, 2022 USD ($) | Jan. 02, 2021 USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||
Deferred vendor incentives recorded as a reduction of inventory | $ 77,500 | $ 82,400 | |
Number of operating segments | segment | 4 | ||
Operating lease right-of-use assets | $ 2,607,690 | 2,671,810 | |
Operating lease liability | $ 2,692,861 | $ 2,802,772 | |
Percentage of sales by product group | 100% | 100% | 100% |
Advertising expense | $ 164,000 | $ 178,000 | $ 132,300 |
Losses from foreign currency transactions included in other income, net | $ 4,400 | $ 1,700 | $ 6,900 |
Number of reportable segments | segment | 1 | ||
Parts and Batteries [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Percentage of sales by product group | 66% | 67% | 66% |
Accessories and Chemicals [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Percentage of sales by product group | 20% | 20% | 21% |
Engine Maintenance [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Percentage of sales by product group | 13% | 12% | 12% |
Other [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Percentage of sales by product group | 1% | 1% | 1% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Inventory, Net [Abstract] | |||
Percentage of LIFO inventory (percent) | 92.20% | 89.80% | |
Increase (decrease) to Cost of sales | $ 311,800 | $ 122,300 | $ (13,800) |
Purchasing and Warehousing costs included in inventory | 637,100 | 515,300 | |
LIFO Method Related Items [Abstract] | |||
Inventories at first-in, first-out (“FIFO”) | 5,193,911 | 4,625,900 | |
Adjustments to state inventories at LIFO | (278,649) | 33,118 | |
Inventories at LIFO | $ 4,915,262 | $ 4,659,018 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
Goodwill | ||
Goodwill, Beginning Balance | $ 993,744 | |
Change in goodwill due to foreign currency translation | 3,300 | $ 200 |
Goodwill, Ending Balance | 990,471 | 993,744 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 305,857 | $ 277,146 |
Document Period End Date | Dec. 31, 2022 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Acquired Intangible Assets [Line Items] | |||
Amortization Expense | $ 31,000 | $ 31,100 | $ 31,600 |
Gross Carrying Amount | 389,585 | 389,393 | |
Accumulated Amortization | (305,857) | (277,146) | |
Net | 83,728 | 112,247 | |
Intangible Assets, Gross (Excluding Goodwill) | 926,758 | 928,363 | |
Intangible Assets, Net (Excluding Goodwill) | 620,901 | 651,217 | |
Finite-lived intangible assets expected amortization expense | |||
2023 | 28,357 | ||
2024 | 28,097 | ||
2025 | 26,602 | ||
2026 | 380 | ||
2027 | 292 | ||
Thereafter | 0 | ||
Net | 83,728 | 112,247 | |
Trademarks [Member] | |||
Acquired Intangible Assets [Line Items] | |||
Accumulated Amortization | 0 | 0 | |
Brands, trademark and tradenames | 537,173 | 538,970 | |
Customer Relationships [Member] | |||
Acquired Intangible Assets [Line Items] | |||
Gross Carrying Amount | 349,428 | 351,136 | |
Accumulated Amortization | (267,806) | (239,302) | |
Net | 81,622 | 111,834 | |
Finite-lived intangible assets expected amortization expense | |||
Net | 81,622 | 111,834 | |
Non-Compete and Other [Member] | |||
Acquired Intangible Assets [Line Items] | |||
Gross Carrying Amount | 40,157 | 38,257 | |
Accumulated Amortization | (38,051) | (37,844) | |
Net | 2,106 | 413 | |
Finite-lived intangible assets expected amortization expense | |||
Net | $ 2,106 | $ 413 |
Receivables, net (Details)
Receivables, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 713,826 | $ 792,947 |
Less: Allowance for doubtful accounts | (15,213) | (10,162) |
Receivables, net | 698,613 | 782,785 |
Trade [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 576,548 | 506,725 |
Vendor [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 126,640 | 201,933 |
Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 10,638 | $ 84,289 |
Long-term Debt and Fair Value_3
Long-term Debt and Fair Value of Financial Instruments - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 04, 2022 | Jan. 01, 2022 | Sep. 29, 2020 | Apr. 16, 2020 |
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Interest Rate at Period End | 0.075% | ||||
Long-term debt, excluding the current portion | $ 1,188,283 | $ 1,034,320 | |||
Fair value of long-term debt | 1,021,396 | 1,092,000 | |||
Debt, Long-term and Short-term, Combined Amount | 1,373,283 | 1,034,320 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt, Long-term and Short-term, Combined Amount | $ 185,000 | $ 0 | |||
3.50% senior unsecured notes (2032 Notes) | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.50% | ||||
Senior Notes | 4.50% senior unsecured notes (2023 Notes) | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.045% | 0.045% | |||
Debt issuance costs | $ 453 | ||||
Long-term debt | $ 0 | $ 193,220 | |||
Senior Notes | 1.75% senior unsecured notes (2027 Notes) | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.0175% | 0.0175% | 1.75% | ||
Debt issuance costs | $ 3,053 | $ 3,618 | |||
Long-term debt | $ 346,947 | $ 346,382 | |||
Senior Notes | 3.90% senior unsecured notes (2030 Notes) | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.039% | 0.039% | 3.90% | ||
Debt issuance costs | $ 4,438 | $ 5,022 | |||
Long-term debt | $ 495,562 | 494,718 | |||
Senior Notes | 3.50% senior unsecured notes (2032 Notes) | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.035% | ||||
Debt issuance costs | $ 4,226 | ||||
Long-term debt | $ 345,774 | $ 0 |
Long-term Debt and Fair Value_4
Long-term Debt and Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | 12 Months Ended | |||||||||||
Feb. 27, 2023 | Dec. 31, 2022 | Feb. 28, 2023 | Apr. 04, 2022 | Mar. 04, 2022 | Mar. 01, 2022 | Jan. 01, 2022 | Nov. 09, 2021 | Sep. 29, 2020 | Sep. 16, 2020 | Apr. 16, 2020 | Dec. 03, 2013 | |
Debt Instrument [Line Items] | ||||||||||||
Minimum threshold amount | $ 25,000,000 | |||||||||||
Discharged or acceleration period | 10 days | |||||||||||
Minimum percent required in aggregate principal amount of notes outstanding | 25% | |||||||||||
Maximum exposure, undiscounted | $ 96,900,000 | |||||||||||
Collateral held | 174,600,000 | |||||||||||
ChargesRelatingtoMakeWholeProvisionof2022SeniorUnsecuredNotesAgreement | $ 7,000,000 | $ 15,800,000 | ||||||||||
ChargesRelatingtoDebtIssuanceCostsfrom2022SeniorUnsecuredNotes | 400,000 | 300,000 | ||||||||||
Subsequent Event [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term line of credit | $ 469 | |||||||||||
Basis spread on variable rate | 1,000% | |||||||||||
4.50% senior unsecured notes (2023 Notes) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 4.50% | |||||||||||
4.50% senior unsecured notes (2022 Notes) [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repurchased face amount | $ 193,200,000 | $ 300,000,000 | ||||||||||
3.50% senior unsecured notes (2032 Notes) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 3.50% | |||||||||||
Face amount | $ 350,000,000 | |||||||||||
Debt issuance, percentage of principal | 99.61% | |||||||||||
Debt issuance costs | $ 3,200,000 | |||||||||||
Bilateral Letter of Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Letters of credit autstanding | $ 90,200,000 | $ 92,000,000 | ||||||||||
Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Redemption price, percentage | 101% | |||||||||||
Senior Notes | 4.50% senior unsecured notes (2023 Notes) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 4.50% | |||||||||||
Face amount | $ 450,000,000 | |||||||||||
Debt issuance, percentage of principal | 99.69% | |||||||||||
Debt issuance costs | $ 1,400,000 | |||||||||||
Repurchased face amount | 256,300,000 | |||||||||||
Unamortized premium | $ 30,500,000 | |||||||||||
Senior Notes | 3.90% senior unsecured notes (2030 Notes) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 0.039% | 0.039% | 3.90% | |||||||||
Face amount | $ 500,000,000 | |||||||||||
Debt issuance, percentage of principal | 99.65% | |||||||||||
Senior Notes | 1.75% senior unsecured notes (2027 Notes) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 0.0175% | 0.0175% | 1.75% | |||||||||
Face amount | $ 350,000,000 | |||||||||||
Debt issuance, percentage of principal | 99.67% | |||||||||||
Debt issuance costs | $ 2,900,000 | |||||||||||
Senior Notes | 3.50% senior unsecured notes (2032 Notes) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 0.035% | |||||||||||
Revolving Credit Facility | 2021 Credit Agreement | Letter of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 200,000,000 | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2021 Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | 1,200,000,000 | |||||||||||
Possible maximum increase | $ 500,000,000 | |||||||||||
Long-term line of credit | $ 185,000,000 | $ 0 | ||||||||||
Remaining borrowing capacity | 1,000,000,000 | |||||||||||
Letters of credit autstanding | $ 0 | 0 | ||||||||||
Revolving Credit Facility | Unsecured Debt | 2021 Credit Agreement | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0.08% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2021 Credit Agreement | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0.20% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2021 Credit Agreement | LIBOR | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0.795% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2021 Credit Agreement | LIBOR | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1.30% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2021 Credit Agreement | Base Rate | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2021 Credit Agreement | Base Rate | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0.30% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2017 Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Remaining borrowing capacity | $ 1,200,000,000 | |||||||||||
Commitment fee percentage | 0.125% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2017 Credit Agreement | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1% | |||||||||||
Revolving Credit Facility | Unsecured Debt | 2017 Credit Agreement | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0% |
Long-term Debt and Fair Value_5
Long-term Debt and Fair Value of Financial Instruments - Future Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2023 | $ 0 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 350,000 |
2027 | 850,000 |
Future payment | $ 1,200,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | $ 4,280,521 | $ 3,931,878 | |
Accumulated depreciation | (2,590,382) | (2,403,567) | |
Property and Equipment, Net | 1,690,139 | 1,528,311 | |
Depreciation | 252,800 | 228,800 | $ 218,500 |
Capitalized software development costs | 41,500 | 63,200 | $ 58,400 |
Land and Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | 471,349 | 471,101 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | 535,884 | 528,558 | |
Building and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | 722,006 | 602,515 | |
Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | $ 2,398,818 | 2,196,099 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Property and Equipment, Gross | $ 14,549 | 14,593 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | $ 137,915 | $ 119,012 | |
Minimum | Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Minimum | Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 30 years | ||
Minimum | Building and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Minimum | Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Maximum | Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Maximum | Land and Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Maximum | Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 40 years | ||
Maximum | Building and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
Maximum | Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 20 years |
Leases and Other Commitments (D
Leases and Other Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Total operating lease liabilities | $ 2,692,861 | $ 2,802,772 |
Less: Current portion of operating lease liabilities | (414,543) | (465,121) |
Non-current operating lease liabilities | $ 2,278,318 | $ 2,337,651 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Operating lease cost | $ 563,959 | $ 538,323 |
Variable lease cost | 171,621 | 148,130 |
Total lease cost | 735,580 | 686,453 |
2023 | 501,276 | |
2024 | 523,097 | |
2025 | 491,055 | |
2026 | 381,295 | |
2027 | 312,518 | |
Thereafter | 840,306 | |
Total lease payments | 3,049,547 | |
Less: Imputed interest | (356,686) | |
Lessee Option to Extend Reasonably Certain | 45,200 | |
Operating lease legally binding minimum payments for lease that have not yet commenced | $ 98,600 | |
Operating Lease, Weighted Average Remaining Lease Term | 6 years 10 months 24 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.40% | |
Operating cash flows from operating leases | $ 624,484 | 514,053 |
Operating leases | $ 432,497 | 726,326 |
Unrecorded Unconditional Purchase Obligation | $ 121,000 | |
Document Period End Date | Dec. 31, 2022 | |
Facilities [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 5 years | |
Facilities [Member] | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Typical initial term | 5 years | |
Facilities [Member] | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Typical initial term | 10 years | |
Equipment [Member] | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Typical initial term | 3 years | |
Equipment [Member] | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Typical initial term | 6 years |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Payables and Accruals [Abstract] | ||
Payroll and related benefits | $ 155,441 | $ 207,984 |
Accrued expenses | 634,447 | 777,051 |
Taxes payable | 106,712 | 111,380 |
Self-insurance reserves | 72,337 | 53,424 |
Capital expenditures | 8,927 | 14,369 |
Accrued Rebates | 42,415 | 35,611 |
Accrued Professional Fees, Current | 22,317 | 18,448 |
Other | 183,273 | 222,396 |
Total accrued expenses | 634,447 | 777,051 |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Inventory related accruals | $ 43,025 | $ 113,439 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | ||||
Dec. 31, 2022 | Jan. 01, 2022 | Feb. 08, 2022 | Apr. 19, 2021 | Nov. 08, 2019 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Shares repurchased (shares) | 3 | 4.6 | |||
Aggregate cost of shares repurchased | $ 598,200 | $ 886,700 | |||
Average repurchase price (in usd per share) | $ 201.88 | $ 192.92 | |||
Remaining amount authorized under Share Repurchase Program | $ 947,300 | ||||
August 2019 Share Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount under Share Repurchase Program | $ 1,000,000 | $ 1,000,000 | $ 700,000 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Earnings Per Share [Abstract] | |||
Net income | $ 501,872 | $ 616,108 | $ 493,021 |
Basic weighted average common shares | 60,351 | 64,028 | 68,748 |
Dilutive impact of share-based awards | 366 | 481 | 255 |
Diluted weighted average common shares | 60,717 | 64,509 | 69,003 |
Basic earnings per common share, Net income applicable to common stockholders (in usd per share) | $ 8.32 | $ 9.62 | $ 7.17 |
Diluted earnings per common share, Net income applicable to common stockholders (in usd per share) | $ 8.27 | $ 9.55 | $ 7.14 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 115 | 9 | 119 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Federal: | |||
Current Federal Tax Expense (Benefit) | $ 95,784 | $ 78,814 | $ 112,096 |
Deferred Federal Income Tax Expense (Benefit) | 4,046 | 55,467 | 7,718 |
Federal Income Tax Expense (Benefit), Continuing Operations | 99,830 | 134,281 | 119,814 |
State: | |||
Current State and Local Tax Expense (Benefit) | 17,531 | 21,420 | 23,779 |
Deferred State and Local Income Tax Expense (Benefit) | 3,919 | 11,747 | 1,066 |
State and Local Income Tax Expense (Benefit), Continuing Operations | 21,450 | 33,167 | 24,845 |
Foreign: | |||
Current Foreign Tax Expense (Benefit) | 27,162 | 21,381 | 13,983 |
Deferred Foreign Income Tax Expense (Benefit) | (1,627) | 988 | (648) |
Foreign Income Tax Expense (Benefit), Continuing Operations | 25,535 | 22,369 | 13,335 |
Current Income Tax Expense (Benefit) | 140,477 | 121,615 | 149,858 |
Provision for deferred income taxes | 6,338 | 68,202 | 8,136 |
Income Tax Expense (Benefit) | 146,815 | 189,817 | 157,994 |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income before provision for income taxes at statutory U.S. federal income tax rate (21% for 2022, 2021 and 2020) | 136,224 | 169,244 | 136,713 |
State income taxes, net of federal income tax benefit | 16,946 | 26,177 | 18,610 |
Other, net | (6,355) | (5,604) | 2,671 |
Income Tax Expense (Benefit) | 146,815 | 189,817 | 157,994 |
Deferred income tax assets: | |||
Accrued expenses not currently deductible for tax | 19,589 | 38,133 | |
Share-based compensation | 12,642 | 12,431 | |
Accrued medical and workers compensation | 13,666 | 9,408 | |
Net operating loss carryforwards | 3,577 | 3,828 | |
Deferred Tax Assets Operating Lease Liabilities | 678,432 | 690,405 | |
Other, net | 9,291 | 6,986 | |
Total deferred income tax assets before valuation allowances | 737,197 | 761,191 | |
Less: Valuation allowance | (5,036) | (3,015) | |
Total deferred income tax assets | 732,161 | 758,176 | |
Deferred income tax liabilities: | |||
Property and equipment | (130,899) | (132,592) | |
Inventories | (226,499) | (231,632) | |
Intangible assets | (137,464) | (139,089) | |
Deferred Tax Liabilities Operating Lease Assets | (653,296) | (665,469) | |
Total deferred income tax liabilities | (1,148,158) | (1,168,782) | |
Net deferred income tax liabilities | (415,997) | (410,606) | |
Deferred Tax Assets, Valuation Allowance less Foreign Tax Carryfowards | 3,000 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning of period | 19,139 | 25,127 | 29,762 |
Increases related to prior period tax positions | 75 | 484 | 1,808 |
Decreases related to prior period tax positions | (261) | (849) | 0 |
Increases related to current period tax positions | 928 | 2,240 | 1,528 |
Settlements | (256) | (2,993) | 0 |
Expiration of statute of limitations | (6,254) | (4,870) | (7,971) |
Unrecognized tax benefits, end of period | 13,371 | 19,139 | 25,127 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense [Abstract] | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense/(Gain) | 600 | 700 | $ 200 |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 2,700 | 3,300 | |
Unrecognized Tax Benefits, Income Tax Penalties Accrued | 100 | ||
Undistributed Earnings of Foreign Subsidiaries | $ 98,700 | $ 75,500 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | 21% | 21% |
Tax Credit Carryforward, Valuation Allowance | $ 2,000 | ||
Effective Income Tax Rate Reconciliation, Percent | 22.60% | 23.60% | (24.30%) |
State and Local Jurisdiction [Member] | |||
Deferred income tax liabilities: | |||
Operating Loss Carryforwards | $ 108,900 | $ 110,500 |
Contingencies (Details)
Contingencies (Details) | Jun. 13, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation Settlement, Amount Awarded to Other Party | $ 49.3 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Postemployment Benefits [Abstract] | |||
Company contributions to defined contribution benefit plan | $ 24.5 | $ 27.3 | $ 21.3 |
Deferred compensation plan liability | $ 13.7 | $ 15 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares Available for Grant | 4,200 | ||
Share-based compensation expense | $ 50,978 | $ 63,067 | $ 45,271 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Deferred income tax benefit | 12,500 | $ 15,200 | 11,500 |
Unrecognized compensation expense | $ 65,500 | ||
Weighted average period unrecognized compensation expense expected to be recognized | 1 year 5 months 12 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 206 | 111 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 190.75 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 204.48 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 114 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 176.50 | $ 176.50 | |
Issuance of shares upon the exercise of stock appreciation rights (in shares) | (3) | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 192.75 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (16) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 7 months 6 days | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 176.50 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 34 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 53.98 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 7 years 10 months 24 days | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 11,800 | $ 22,800 | $ 9,400 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning of period | 197 | ||
Granted | 0 | ||
Granted, Weighted Average Grant Date Fair Value | $ 0 | $ 0 | $ 130.03 |
Change in Units Based on Performance | (6) | ||
Change in Units Based on Performance, Weighted Average Exercise Price | $ 119.95 | ||
Vested | (78) | ||
Vested, Weighted Average Exercise Price | $ 160.38 | ||
Forfeited | (8) | ||
Forfeited, Weighted Average Grant Date Fair Value | $ 132.01 | ||
Nonvested, end of period | 105 | 197 | |
Nonvested, Weighted Average Grant Date Fair Value | $ 130.88 | $ 142.23 | |
Maximum potential payout of outstanding awards for Equity Instruments Other than Options | 120 | ||
Total grant date fair value of vested | $ 12,460 | $ 7,987 | $ 1,123 |
Market Based Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk-free interest rate (1) | 1.60% | 0.30% | 0.90% |
Expected dividend yield | 0% | 0% | 0.80% |
Expected stock price volatility (2) | 34.60% | 36% | 34% |
Liquidity discount for post-vest restrictions | 9.20% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning of period | 112 | ||
Granted | 57 | ||
Granted, Weighted Average Grant Date Fair Value | $ 205.52 | $ 204.97 | $ 145.04 |
Change in Units Based on Performance | 0 | ||
Change in Units Based on Performance, Weighted Average Exercise Price | $ 0 | ||
Vested | (22) | ||
Vested, Weighted Average Exercise Price | $ 165.84 | ||
Forfeited | (12) | ||
Forfeited, Weighted Average Grant Date Fair Value | $ 193.42 | ||
Nonvested, end of period | 135 | 112 | |
Nonvested, Weighted Average Grant Date Fair Value | $ 191.72 | $ 179.66 | |
Maximum potential payout of outstanding awards for Equity Instruments Other than Options | 271 | ||
Total grant date fair value of vested | $ 3,695 | $ 3,650 | $ 2,646 |
Deferred Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 1,700 | $ 1,600 | $ 1,600 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted | 9 | 10 | 12 |
Granted, Weighted Average Grant Date Fair Value | $ 193.05 | $ 191.24 | $ 130.14 |
Employee Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares Available for Grant | 900 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Purchase discount of fair market value (percent) | 10% | ||
Team Member annual purchase limit | $ 25 | ||
Team Member annual purchase limit, percentage of compensation (percent) | 10% | ||
Share-based Payment Arrangement, Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk-free interest rate (1) | 1.90% | ||
Expected dividend yield | 2.60% | ||
Expected stock price volatility (2) | 34% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Expected life of awards (in months) (3) | 6 years | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning of period | 466 | ||
Granted | 209 | ||
Granted, Weighted Average Grant Date Fair Value | $ 196.61 | $ 183.41 | $ 137.47 |
Change in Units Based on Performance | 0 | ||
Change in Units Based on Performance, Weighted Average Exercise Price | $ 0 | ||
Vested | (219) | ||
Vested, Weighted Average Exercise Price | $ 158.06 | ||
Forfeited | (62) | ||
Forfeited, Weighted Average Grant Date Fair Value | $ 178.04 | ||
Nonvested, end of period | 394 | 466 | |
Nonvested, Weighted Average Grant Date Fair Value | $ 180.41 | $ 162.33 | |
Total grant date fair value of vested | $ 34,685 | $ 34,555 | $ 30,231 |
Minimum | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Typical number of awards vesting at end of period (percent) | 0% | ||
Maximum | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Typical number of awards vesting at end of period (percent) | 200% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | $ (22,627) | ||
Activity | (22,516) | $ 4,132 | $ 7,810 |
Balance, End of Period | (45,143) | (22,627) | |
Unrealized Gain (Loss) on Postretirement Plan | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | 906 | 1,170 | 1,322 |
Activity | (186) | (264) | (152) |
Balance, End of Period | 720 | 906 | 1,170 |
Foreign Currency Translation | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | (23,533) | (27,929) | (35,891) |
Activity | (22,330) | 4,396 | 7,962 |
Balance, End of Period | (45,863) | (23,533) | (27,929) |
Accumulated Other Comprehensive (Loss) Income | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | (22,627) | (26,759) | (34,569) |
Activity | (22,516) | 4,132 | 7,810 |
Balance, End of Period | $ (45,143) | $ (22,627) | $ (26,759) |
Valuation and Qualifying Acco_3
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Allowance for Doubtful Accounts Receivable, Current, Beginning of Period | $ 10,162 | ||
Allowance for Doubtful Accounts Receivable, Current, End of Period | 15,213 | $ 10,162 | |
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Allowance for Doubtful Accounts Receivable, Current, Beginning of Period | 10,162 | 11,929 | $ 14,249 |
Valuation Allowances and Reserves, Charged to Cost and Expense | 24,399 | 11,125 | 14,933 |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Deduction | (19,348) | (12,892) | (17,253) |
Allowance for Doubtful Accounts Receivable, Current, End of Period | $ 15,213 | $ 10,162 | $ 11,929 |