Cover Page
Cover Page - shares | 4 Months Ended | |
Apr. 22, 2023 | May 26, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 22, 2023 | |
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, $0.0001 par value | |
Trading Symbol | AAP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,443,852 | |
Entity Central Index Key | 0001158449 | |
Current Fiscal Year End Date | --12-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 22, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 226,499 | $ 269,282 |
Receivables, net | 782,093 | 698,613 |
Inventories | 5,015,973 | 4,915,262 |
Other current assets | 177,127 | 163,695 |
Total current assets | 6,201,692 | 6,046,852 |
Property and equipment, net of accumulated depreciation of $2,672,665 and $2,590,382 | 1,694,337 | 1,690,139 |
Operating lease right-of-use assets | 2,628,899 | 2,607,690 |
Goodwill | 990,573 | 990,471 |
Other intangible assets, net | 612,104 | 620,901 |
Other assets | 54,633 | 62,429 |
Total assets | 12,182,238 | 12,018,482 |
Current liabilities: | ||
Accounts payable | 3,682,749 | 4,123,462 |
Accrued expenses | 718,290 | 634,447 |
Current portion of long-term debt | 116,000 | 185,000 |
Other current liabilities | 466,416 | 427,480 |
Total current liabilities | 4,983,455 | 5,370,389 |
Long-term debt | 1,784,596 | 1,188,283 |
Noncurrent operating lease liabilities | 2,269,280 | 2,278,318 |
Deferred income taxes | 422,984 | 415,997 |
Other long-term liabilities | 85,762 | 87,214 |
Total Liabilities | 9,546,077 | 9,340,201 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, nonvoting, $0.0001 par value | 0 | 0 |
Common stock, voting, $0.0001 par value | 8 | 8 |
Additional paid-in capital | 914,184 | 897,560 |
Treasury stock, at cost | (2,931,373) | (2,918,768) |
Accumulated other comprehensive loss | (44,355) | (45,143) |
Retained earnings | 4,697,697 | 4,744,624 |
Total stockholders’ equity | 2,636,161 | 2,678,281 |
Total liabilities and stockholders’ equity | $ 12,182,238 | $ 12,018,482 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Apr. 22, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 2,672,665 | $ 2,590,382 |
Preferred stock par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 3,417,594 | $ 3,374,210 |
Cost of sales, including purchasing and warehousing costs | 1,946,931 | 1,867,690 |
Gross profit | 1,470,663 | 1,506,520 |
Selling, general and administrative expenses | 1,380,664 | 1,303,250 |
Operating income | 89,999 | 203,270 |
Other, net: | ||
Interest expense | (29,718) | (12,868) |
Loss on early redemption of senior unsecured notes | 0 | (7,408) |
Other (expense) income, net | (674) | 136 |
Total other, net | (30,392) | (20,140) |
Income before provision for income taxes | 59,607 | 183,130 |
Provision for income taxes | 16,956 | 43,339 |
Net income | $ 42,651 | $ 139,791 |
Basic earnings per common share (in dollars per share) | $ 0.72 | $ 2.28 |
Weighted-average common shares outstanding | 59,334 | 61,261 |
Diluted earnings per common share (in dollars per share) | $ 0.72 | $ 2.26 |
Weighted-average common shares outstanding | 59,544 | 61,732 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 42,651 | $ 139,791 |
Other comprehensive (loss) income: | ||
Changes in net unrecognized other postretirement benefits, net of tax of $70 and $9 | 197 | 24 |
Currency translation adjustments | 591 | (18,462) |
Total other comprehensive (loss) income | 788 | (18,438) |
Comprehensive income | $ 43,439 | $ 121,353 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Changes in net unrecognized other postretirment benefits, net of tax | $ 70 | $ 9 |
Condensed Consolidated Statem_4
Condensed 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 | Retained Earnings |
Balance (in shares) at Jan. 01, 2022 | 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 | 139,791 | 139,791 | ||||
Total other comprehensive income (loss) | (18,438) | (18,438) | ||||
Issuance of shares upon the exercise of stock options (in shares) | 1 | |||||
Issuance of shares upon the exercise of stock options | 233 | 233 | ||||
Restricted stock and deferred stock units vested (in shares) | 234 | |||||
Share-based compensation | 16,978 | 16,978 | ||||
Stock issued under employee stock purchase plan (in shares) | 10 | |||||
Stock issued under employee stock purchase plan | 933 | 933 | ||||
Repurchases of common stock (in shares) | (1,156) | |||||
Repurchases of common stock | (264,469) | (264,469) | ||||
Cash dividends declared | (92,539) | (92,539) | ||||
Other | (1,100) | (1,100) | ||||
Balance (in shares) at Apr. 23, 2022 | 61,098 | |||||
Balance at Apr. 23, 2022 | 2,909,680 | $ 8 | 862,451 | (2,564,757) | (41,065) | 4,653,043 |
Balance (in shares) at Dec. 31, 2022 | 59,264 | |||||
Balance at Dec. 31, 2022 | 2,678,281 | $ 8 | 897,560 | (2,918,768) | (45,143) | 4,744,624 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 42,651 | 42,651 | ||||
Total other comprehensive income (loss) | 788 | 788 | ||||
Restricted stock and deferred stock units vested (in shares) | 256 | |||||
Share-based compensation | 16,524 | 16,524 | ||||
Stock issued under employee stock purchase plan (in shares) | 18 | |||||
Stock issued under employee stock purchase plan | 1,100 | 1,100 | ||||
Repurchases of common stock (in shares) | (94) | |||||
Repurchases of common stock | (12,605) | (12,605) | ||||
Cash dividends declared | (89,578) | (89,578) | ||||
Other | (1,000) | (1,000) | ||||
Balance (in shares) at Apr. 22, 2023 | 59,444 | |||||
Balance at Apr. 22, 2023 | $ 2,636,161 | $ 8 | $ 914,184 | $ (2,931,373) | $ (44,355) | $ 4,697,697 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) - $ / shares | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared (per common share) | $ 1.50 | $ 1.50 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 42,651 | $ 139,791 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 92,554 | 85,581 |
Share-based compensation | 16,524 | 16,978 |
Loss and impairment of long-lived assets | 90 | 1,237 |
Loss on early redemption of senior unsecured notes | 0 | 7,408 |
Provision for deferred income taxes | 6,899 | 9,681 |
Other | 391 | 1,020 |
Net change in: | ||
Receivables, net | (83,370) | (174,895) |
Inventories | (100,178) | (119,550) |
Accounts payable | (440,995) | 20,225 |
Accrued expenses | 85,035 | (98,978) |
Other assets and liabilities, net | 1,534 | 56,562 |
Net cash provided by operating activities | (378,865) | (54,940) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (89,996) | (114,854) |
Proceeds from sales of property and equipment | 325 | 828 |
Net cash used in investing activities | (89,671) | (114,026) |
Cash flows from financing activities: | ||
Borrowings under credit facilities | 2,886,000 | 275,000 |
Payments on credit facilities | (2,955,000) | (275,000) |
Borrowings on senior unsecured notes | 599,571 | 348,618 |
Payments on senior unsecured notes | 0 | (201,081) |
Dividends paid | (89,487) | (154,796) |
Repurchases of common stock | (12,605) | (264,469) |
Other, net | (2,819) | (2,007) |
Net cash used in financing activities | 425,660 | (273,735) |
Effect of exchange rate changes on cash | 93 | (19,994) |
Net decrease in cash and cash equivalents | (42,783) | (462,695) |
Cash and cash equivalents, beginning of period | 269,282 | 601,428 |
Cash and cash equivalents, end of period | 226,499 | 138,733 |
Non-cash transactions: | ||
Accrued purchases of property and equipment | $ 6,909 | $ 15,272 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 4 Months Ended |
Apr. 22, 2023 | |
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 condensed 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 April 22, 2023, we operated a total of 4,778 stores and 318 branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. In addition, as of April 22, 2023, we served 1,315 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” and “Autopart International” trade names. The accounting policies followed in the presentation of interim financial results are consistent with those followed on an annual basis. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), have been condensed or omitted based upon the Securities and Exchange Commission (“SEC”) interim reporting principles. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for 2022 as filed with the SEC on February 28, 2023. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the operating results to be expected for the full year. Our first quarter of the year contains sixteen weeks. Our remaining three quarters each consist of twelve weeks. Out-of-Period Charge The sixteen weeks ended April 22, 2023 included an out-of-period charge of $17.3 million, reflected in Selling, general and administrative (“SG&A”) expenses, and related tax benefit of $4.3 million in the Condensed Consolidated Statement of Operations, related to costs incurred in prior years but not previously expensed. The out-of-period charge was not material to the current period or any previously issued financial statements. |
Significant Acounting Policies
Significant Acounting Policies | 4 Months Ended |
Apr. 22, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Revenues The following table summarizes disaggregated revenue from contracts with customers by product group: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Percentage of Sales: Parts and Batteries 66 % 66 % Accessories and Chemicals 20 20 Engine Maintenance 13 13 Other 1 1 Total 100 % 100 % Recently Issued Accounting Pronouncements - Adopted Supplier Finance Programs In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”), which requires a buyer in a supplier finance program to disclose sufficient information about the program, enabling users of the financial statements to understand the nature of the program and activity and changes during the period. ASU 2022-04 was 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. During the first quarter 2023, we adopted ASU 2022-04, which did not have a material impact on our consolidated financial position, results of operations and cash flows. Refer to Note 11. Supplier Finance Programs for further details. |
Inventories
Inventories | 4 Months Ended |
Apr. 22, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories, net Inventories, net, are stated at the lower of cost or market. We used the last in, first out (“LIFO”) method of accounting for approximately 92% of inventories as of April 22, 2023 and December 31, 2022. 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 for inventories purchased in the sixteen weeks ended April 22, 2023 and prior years. As a result of changes in the LIFO reserve, we recorded a reduction to Cost of sales of $6.6 million for the sixteen weeks ended April 22, 2023 and an increase to Cost of sales of $81.5 million for the sixteen weeks ended April 23, 2022 to state inventories at LIFO. An actual valuation of inventory under the LIFO method is performed by us at the end of each fiscal year based on inventory levels and carrying costs at that time. Accordingly, interim LIFO calculations are based on our estimates of expected inventory levels and costs at the end of the year. Inventory balances were as follows: April 22, 2023 December 31, 2022 Inventories at first in, first out (“FIFO”) $ 5,287,977 $ 5,193,911 Adjustments to state inventories at LIFO (272,004) (278,649) Inventories at LIFO $ 5,015,973 $ 4,915,262 |
Intangible Assets
Intangible Assets | 4 Months Ended |
Apr. 22, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible AssetsOur definite-lived intangible assets include customer relationships and non-compete agreements. Amortization expense was $9.2 million and $9.5 million for the sixteen weeks ended April 22, 2023 and April 23, 2022. |
Receivables, net
Receivables, net | 4 Months Ended |
Apr. 22, 2023 | |
Receivables [Abstract] | |
Receivables, net | Receivables, net Receivables, net, consisted of the following: April 22, 2023 December 31, 2022 Trade $ 626,922 $ 576,548 Vendor 163,755 126,640 Other 9,465 10,638 Total receivables 800,142 713,826 Less: allowance for credit losses (18,049) (15,213) Receivables, net $ 782,093 $ 698,613 |
Leases
Leases | 4 Months Ended |
Apr. 22, 2023 | |
Leases [Abstract] | |
Leases | Leases Substantially all of our leases are for facilities and vehicles. The initial term for facilities is typically five three Total lease cost is included in Cost of sales and Selling, general and administrative expenses (“SG&A”) in the accompanying Condensed Consolidated Statements of Operations and is recorded net of immaterial sublease income. Total lease cost comprised of the following: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Operating lease cost $ 173,659 $ 173,035 Variable lease cost 51,346 53,296 Total lease cost $ 225,005 $ 226,331 Other information relating to our lease liabilities is as follows: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 153,363 $ 190,542 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 181,167 $ 147,015 |
Share Repurchase Program
Share Repurchase Program | 4 Months Ended |
Apr. 22, 2023 | |
Stock Repurchases: [Abstract] | |
Share Repurchase Program | Share Repurchase Program Our Board of Directors had previously authorized $2.7 billion to 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. During the sixteen weeks ended April 22, 2023, we purchased no shares of our common stock under our share repurchase program. During the sixteen weeks ended April 23, 2022, we repurchased 1.1 million shares at an aggregate cost of $248.2 million, or an average price of $231.41 per share. We had $947.3 million remaining under our share repurchase program as of April 22, 2023. |
Earnings per Share
Earnings per Share | 4 Months Ended |
Apr. 22, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share The computations of basic and diluted earnings per share were as follows: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Numerator Net income applicable to common shares $ 42,651 $ 139,791 Denominator Basic weighted-average common shares 59,334 61,261 Dilutive impact of share-based awards 210 471 Diluted weighted-average common shares (1) 59,544 61,732 Basic earnings per common share $ 0.72 $ 2.28 Diluted earnings per common share $ 0.72 $ 2.26 (1) For the sixteen weeks ended April 22, 2023 and April 23, 2022, 190 thousand and 21 thousand restricted stock units (“RSUs”) were excluded from the diluted calculation as their inclusion would have been anti-dilutive. |
Share-Based Compensation
Share-Based Compensation | 4 Months Ended |
Apr. 22, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based CompensationDuring the sixteen weeks ended April 22, 2023, we granted 237 thousand time-based RSUs, 22 thousand performance-based RSUs, 73 thousand market-based RSUs and 148 thousand stock options. The general terms of the time-based and market-based RSUs are similar to awards previously granted by us. The performance-based RSUs granted may vest following a one-year period subject to the achievements of certain financial goals and employment service as specified in the grant agreement. We grant options to purchase common stock to certain employees under our 2014 Long-Term Incentive Plan. The general terms of the stock options are similar to awards previously granted by us. We record compensation expense for the grant date fair value of the option awards evenly over the vesting period. The weighted-average fair values of the time-based, performance-based and market-based RSUs granted during the sixteen weeks ended April 22, 2023 were $135.13, $135.13 and $139.75 per share. The fair value of each market-based RSU was determined using a Monte Carlo simulation model. For time-based and performance-based RSUs, the fair value of each award was determined based on the market price of our stock on the date of grant adjusted for expected dividends during the vesting period, as applicable. The weighted-average fair value of stock options granted during the sixteen weeks ended April 22, 2023 was $35.38 per share. The fair value was estimated on the date of grant by applying the Black-Scholes option-pricing valuation model. Sixteen Weeks Ended April 22, 2023 Risk-free interest rate (1) 4.1 % Expected term (2) 6 years Expected volatility (3) 35.1 % Expected dividend yield (4) 4.1 % (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 SEC 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. The total income tax benefit related to share-based compensation expense for the sixteen weeks ended April 22, 2023 was $4.0 million. As of April 22, 2023, there was $95.7 million of unrecognized compensation expense related to all share-based awards that is expected to be recognized over a weighted-average period of 1.7 years. |
Significant Acounting Policies
Significant Acounting Policies (Policies) | 4 Months Ended |
Apr. 22, 2023 | |
Accounting Policies [Abstract] | |
Inventories | Inventories, net, are stated at the lower of cost or market. |
Recently Issued Accounting Pronouncements - Adopted | program and activity and changes during the period. ASU 2022-04 was 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. During the first quarter 2023, we adopted ASU 2022-04, which did not have a material impact on our consolidated financial position, results of operations and cash flows. Refer to Note 11. Supplier Finance Programs for further details. |
Leases | Total lease cost is included in Cost of sales and Selling, general and administrative expenses (“SG&A”) in the accompanying Condensed Consolidated Statements of Operations and is recorded net of immaterial sublease income. |
Fair Value Measurement | For time-based and performance-based RSUs, the fair value of each award was determined based on the market price of our stock on the date of grant adjusted for expected dividends during the vesting period, as applicable. |
Significant Acounting Policie_2
Significant Acounting Policies (Tables) | 4 Months Ended |
Apr. 22, 2023 | |
Accounting Policies [Abstract] | |
Revenue from External Customers by Products and Services | The following table summarizes disaggregated revenue from contracts with customers by product group: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Percentage of Sales: Parts and Batteries 66 % 66 % Accessories and Chemicals 20 20 Engine Maintenance 13 13 Other 1 1 Total 100 % 100 % |
Inventories (Tables)
Inventories (Tables) | 4 Months Ended |
Apr. 22, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory balances were as follows: April 22, 2023 December 31, 2022 Inventories at first in, first out (“FIFO”) $ 5,287,977 $ 5,193,911 Adjustments to state inventories at LIFO (272,004) (278,649) Inventories at LIFO $ 5,015,973 $ 4,915,262 |
Receivables, net (Tables)
Receivables, net (Tables) | 4 Months Ended |
Apr. 22, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Receivables, net, consisted of the following: April 22, 2023 December 31, 2022 Trade $ 626,922 $ 576,548 Vendor 163,755 126,640 Other 9,465 10,638 Total receivables 800,142 713,826 Less: allowance for credit losses (18,049) (15,213) Receivables, net $ 782,093 $ 698,613 |
Long-term Debt and Fair Value o
Long-term Debt and Fair Value of Financial Instruments (Tables) | 4 Months Ended |
Apr. 22, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consists of the following: April 22, 2023 December 31, 2022 5.90% Senior Unsecured Notes due March 9, 2026 $ 297,941 $ — 1.75% Senior Unsecured Notes due October 1, 2027 347,122 346,947 5.95% Senior Unsecured Notes due March 9, 2028 297,882 — 3.90% Senior Unsecured Notes due April 15, 2030 495,743 495,562 3.50% Senior Unsecured Notes due March 15, 2032 345,908 345,774 Revolver credit facility 116,000 185,000 $ 1,900,596 $ 1,373,283 Less: Current portion of long-term debt (116,000) (185,000) Long-term debt, excluding the current portion $ 1,784,596 $ 1,188,283 Fair value of long-term debt $ 1,784,176 $ 1,021,396 |
Leases (Tables)
Leases (Tables) | 4 Months Ended |
Apr. 22, 2023 | |
Leases [Abstract] | |
Lease, Cost | Total lease cost comprised of the following: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Operating lease cost $ 173,659 $ 173,035 Variable lease cost 51,346 53,296 Total lease cost $ 225,005 $ 226,331 |
Schedule of Other Information Relating to Lease Liabilities | Other information relating to our lease liabilities is as follows: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 153,363 $ 190,542 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 181,167 $ 147,015 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 4 Months Ended |
Apr. 22, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted earnings per share were as follows: Sixteen Weeks Ended April 22, 2023 April 23, 2022 Numerator Net income applicable to common shares $ 42,651 $ 139,791 Denominator Basic weighted-average common shares 59,334 61,261 Dilutive impact of share-based awards 210 471 Diluted weighted-average common shares (1) 59,544 61,732 Basic earnings per common share $ 0.72 $ 2.28 Diluted earnings per common share $ 0.72 $ 2.26 (1) For the sixteen weeks ended April 22, 2023 and April 23, 2022, 190 thousand and 21 thousand restricted stock units (“RSUs”) were excluded from the diluted calculation as their inclusion would have been anti-dilutive. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 4 Months Ended |
Apr. 22, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Sixteen Weeks Ended April 22, 2023 Risk-free interest rate (1) 4.1 % Expected term (2) 6 years Expected volatility (3) 35.1 % Expected dividend yield (4) 4.1 % |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) | 4 Months Ended | |
Apr. 22, 2023 USD ($) store | Apr. 23, 2022 USD ($) | |
Basis of Presentation [Line Items] | ||
Selling, general and administrative expenses | $ 1,380,664,000 | $ 1,303,250,000 |
Provision for income taxes | 16,956,000 | $ 43,339,000 |
Revision of Prior Period, Adjustment | ||
Basis of Presentation [Line Items] | ||
Selling, general and administrative expenses | 17.3 | |
Provision for income taxes | $ 4.3 | |
Stores [Member] | ||
Basis of Presentation [Line Items] | ||
Number of Stores | store | 4,778 | |
Branches [Member] | ||
Basis of Presentation [Line Items] | ||
Number of Stores | store | 318 | |
Independently owned Carquest store locations [Member] | ||
Basis of Presentation [Line Items] | ||
Number of Stores | store | 1,315 |
Significant Acounting Policie_3
Significant Acounting Policies (Details) | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Revenue from External Customer [Line Items] | ||
Percentage Of Sales By Product Group | 100% | 100% |
Parts and Batteries [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage Of Sales By Product Group | 66% | 66% |
Accessories and Chemicals [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage Of Sales By Product Group | 20% | 20% |
Engine Maintenance [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage Of Sales By Product Group | 13% | 13% |
Other [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage Of Sales By Product Group | 1% | 1% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 4 Months Ended | ||
Apr. 22, 2023 | Apr. 23, 2022 | Dec. 31, 2022 | |
Inventory [Line Items] | |||
Percentage of LIFO Inventory | 92% | 92% | |
Inventory, LIFO Reserve, Effect on Income, Net | $ (6,600) | $ 81,500 | |
Inventories at first in, first out (“FIFO”) | 5,287,977 | $ 5,193,911 | |
Adjustments to state inventories at LIFO | (272,004) | (278,649) | |
Inventories at LIFO | $ 5,015,973 | $ 4,915,262 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 9.2 | $ 9.5 |
Receivables, net (Details)
Receivables, net (Details) - USD ($) $ in Thousands | Apr. 22, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 800,142 | $ 713,826 |
Less: Allowance for doubtful accounts | (18,049) | (15,213) |
Receivables, net | 782,093 | 698,613 |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 626,922 | 576,548 |
Accounts Receivable, Vendor [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 163,755 | 126,640 |
Accounts Receivable, Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 9,465 | $ 10,638 |
Long-term Debt and Fair Value_2
Long-term Debt and Fair Value of Financial Instruments (Details) - USD ($) | 4 Months Ended | ||||||
Feb. 27, 2023 | Apr. 22, 2023 | Mar. 09, 2023 | Dec. 31, 2022 | Mar. 04, 2022 | Sep. 29, 2020 | Apr. 16, 2020 | |
Debt Instrument [Line Items] | |||||||
Basis spread | 0.10% | ||||||
Fair value of long-term debt | $ 1,784,176,000 | $ 1,021,396,000 | |||||
Guarantor Obligations, Maximum Exposure | 104,000,000 | 96,900,000 | |||||
Guarantor Obligation, Collateral Amount | 177,700,000 | 174,600,000 | |||||
Long-term debt | 1,784,596,000 | 1,188,283,000 | |||||
Debt, Long-term and Short-term, Combined Amount | 1,900,596,000 | 1,373,283,000 | |||||
Long-term Debt, Current Maturities | $ (116,000,000) | (185,000,000) | |||||
Document Period End Date | Apr. 22, 2023 | ||||||
Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Letters of Credit Outstanding, Amount | $ 0 | 0 | |||||
Debt, Long-term and Short-term, Combined Amount | 116,000,000 | 185,000,000 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | 1,100,000,000 | 1,000,000,000 | |||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 116,000,000 | ||||||
1.75% senior unsecured notes (2027 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | ||||||
Debt Issuance, Percentage Of Principal | 99.67% | ||||||
Debt Issuance Costs, Gross | $ 2,900,000 | ||||||
Debt Instrument, Face Amount | $ 350,000,000 | ||||||
3.90% senior unsecured notes (2030 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.90% | ||||||
Debt Issuance, Percentage Of Principal | 99.65% | ||||||
Debt Instrument, Face Amount | $ 500,000,000 | ||||||
3.50% senior unsecured notes (2032 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | ||||||
Debt Issuance, Percentage Of Principal | 99.61% | ||||||
Debt Issuance Costs, Gross | $ 3,200,000 | ||||||
Debt Instrument, Face Amount | $ 350,000,000 | ||||||
5.90% senior unsecured notes (2026 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 590% | ||||||
Debt Issuance, Percentage Of Principal | 9,994% | ||||||
Debt Issuance Costs, Gross | $ 1.6 | ||||||
Debt Instrument, Face Amount | $ 300 | ||||||
Long-term Debt and Fair Value of Financial Instruments | Long-term Debt and Fair Value of Financial Instruments Long-term debt consists of the following: April 22, 2023 December 31, 2022 5.90% Senior Unsecured Notes due March 9, 2026 $ 297,941 $ — 1.75% Senior Unsecured Notes due October 1, 2027 347,122 346,947 5.95% Senior Unsecured Notes due March 9, 2028 297,882 — 3.90% Senior Unsecured Notes due April 15, 2030 495,743 495,562 3.50% Senior Unsecured Notes due March 15, 2032 345,908 345,774 Revolver credit facility 116,000 185,000 $ 1,900,596 $ 1,373,283 Less: Current portion of long-term debt (116,000) (185,000) Long-term debt, excluding the current portion $ 1,784,596 $ 1,188,283 Fair value of long-term debt $ 1,784,176 $ 1,021,396 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 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. As of April 22, 2023, we had $116.0 million of outstanding borrowings, $1.1 billion of borrowing availability and no letters of credit outstanding under our unsecured revolving credit facility (the “Credit Agreement”). As of December 31, 2022, we had $185.0 million outstanding borrowings, $1.0 billion of borrowing availability and no letters of credit outstanding under our Credit Agreement. As of April 22, 2023 and December 31, 2022, we had $91.0 million and $90.2 million of bilateral letters of credit issued separately from the 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. We were in compliance with financial covenants required by our debt arrangements as of April 22, 2023. Senior Unsecured Notes Our 3.90% senior unsecured notes due April 15, 2030 (the “Original Notes”) were issued April 16, 2020, at 99.65% of the principal amount of $500.0 million, and were not registered under the Securities Act of 1933, as amended (the “Securities Act”). 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 were exchanged for a like principal amount (the “Exchange Notes” or “2030 Notes”), and which have been registered under the Securities Act. The Original Notes were substantially identical to the Exchange Notes, except 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. Our 1.75% senior unsecured notes due October 1, 2027 (the “2027 Notes”) were issued September 29, 2020, at 99.67% of the principal amount of $350.0 million. The 2027 Notes bear interest, payable semi-annually in arrears on April 1 and October 1, at a rate of 1.75% per year. In connection with the 2027 Notes offering, we incurred $2.9 million of debt issuance costs. Our 3.50% senior unsecured notes due 2032 (the “2032 Notes”) were issued March 4, 2022, at 99.61% of the principal amount of $350.0 million. 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 5.90% senior unsecured notes due March 9, 2026 (the “2026 Notes”) were issued March 9, 2023, at 99.94% of the principal amount of $300.0 million. The 2026 Notes bear interest, payable semi-annually in arrears on March 9 and September 9, at a rate of 5.90% per year. In connection with the 2026 Notes offering, we incurred $1.6 million of debt issuance costs. Our 5.95% senior unsecured notes due March 9, 2028 (the “2028 Notes”) were issued March 9, 2023, at 99.92% of the principal amount of $300.0 million. The 2028 Notes bear interest, payable semi-annually in arrears on March 9 and September 9, at a rate of 5.95% per year. In connection with the 2028 Notes offering, we incurred $1.7 million of debt issuance costs. We may redeem some or all of our 2026 Notes and 2028 Notes (the “Notes”) at any time, or from time to time, prior to March 9, 2026 in the case of our 2026 Notes, or February 9, 2028 in the case of our 2028 Notes, at the redemption price described in the related indenture for the Notes (the “Indenture”). In the event of a change of control triggering event, as defined in the Indenture, we will be required to offer the repurchase of 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 unsecured basis by guarantor and subsidiary guarantees, as defined by the Indenture. Debt Guarantees We are a guarantor of loans made by banks to various independently owned Carquest-branded stores that are customers of ours. These loans totaled $104.0 million and $96.9 million as of April 22, 2023 and December 31, 2022 and 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 $177.7 million and $174.6 million as of April 22, 2023 and December 31, 2022. We believe that the likelihood of performance under these guarantees is remote. | ||||||
5.95% senior unsecured notes (2028 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 595% | ||||||
Debt Issuance, Percentage Of Principal | 9,992% | ||||||
Debt Issuance Costs, Gross | $ 1.7 | ||||||
Debt Instrument, Face Amount | $ 300 | ||||||
Bilateral Letter of Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Letters of Credit Outstanding, Amount | $ 91,000,000 | 90,200,000 | |||||
Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Redemption Price, Percentage | 101% | ||||||
Senior Notes [Member] | 1.75% senior unsecured notes (2027 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | ||||||
Long-term debt | $ 347,122,000 | 346,947,000 | |||||
Senior Notes [Member] | 3.90% senior unsecured notes (2030 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.90% | ||||||
Long-term debt | $ 495,743,000 | 495,562,000 | |||||
Senior Notes [Member] | 3.50% senior unsecured notes (2032 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | ||||||
Long-term debt | $ 345,908,000 | $ 345,774,000 | |||||
Senior Notes [Member] | 5.90% senior unsecured notes (2026 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.90% | ||||||
Long-term debt | $ 297,941,000 | ||||||
Senior Notes [Member] | 5.95% senior unsecured notes (2028 Notes) | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.95% | ||||||
Long-term debt | $ 297,882,000 |
Supplier Finance Programs
Supplier Finance Programs - USD ($) | 4 Months Ended | 12 Months Ended |
Apr. 22, 2023 | Dec. 31, 2022 | |
Supplier Finance Program [Line Items] | ||
Document Period End Date | Apr. 22, 2023 | |
Payments to Suppliers | $ 3,100,000,000 | $ 3,200,000,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 173,659 | $ 173,035 |
Variable lease cost | 51,346 | 53,296 |
Total lease cost | 225,005 | 226,331 |
Cash paid for amounts included in the measurement of lease liabilities: | 153,363 | 190,542 |
Right-of-use assets obtained in exchange for lease obligations: | $ 181,167 | $ 147,015 |
Real Estate [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Renewal Term | 5 years | |
Real Estate [Member] | Minimum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 5 years | |
Real Estate [Member] | Maximum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 10 years | |
Equipment [Member] | Minimum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 6 years |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Stock Repurchases: [Abstract] | ||
Stock Repurchase Program, Authorized Amount | $ 2,700 | |
Treasury Stock, Shares, Acquired as Part of Authorized Plan | 0 | 1.1 |
Payments for Repurchase of Common Stock | $ 248.2 | |
Acquired, Average Cost Per Share, Acquired as Part of Plan | $ 231.41 | |
Share Repurchase Program, Remaining Authorized Repurchase Amount | $ 947.3 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 4 Months Ended | |
Apr. 22, 2023 | Apr. 23, 2022 | |
Earnings Per Share [Abstract] | ||
Net income | $ 42,651 | $ 139,791 |
Basic weighted-average common shares (in shares) | 59,334 | 61,261 |
Dilutive impact of share-based awards (in shares) | 210 | 471 |
Diluted weighted-average common shares (in shares) | 59,544 | 61,732 |
Basic earnings per common share (in dollars per share) | $ 0.72 | $ 2.28 |
Diluted earnings per common share (in dollars per share) | $ 0.72 | $ 2.26 |
RSUs | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 190 | 21 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Millions | 4 Months Ended |
Apr. 22, 2023 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted (in shares) | shares | 148 |
Weighted-average fair value of stock options granted | $ / shares | $ 35.38 |
Tax benefit from compensation expense | $ | $ 4 |
Unrecognized compensation expense | $ | $ 95.7 |
Unrecognized compensation expense, period for recognition | 1 year 8 months 12 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | shares | 237 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 135.13 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | shares | 22 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 135.13 |
Market-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | shares | 73 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 139.75 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options, Valuation Assumptions (Details) - Share-Based Payment Arrangement, Option | 4 Months Ended |
Apr. 22, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 4.10% |
Expected term | 6 years |
Expected volatility | 35.10% |
Expected dividend yield | 4.10% |