Cover Page
Cover Page - shares | 4 Months Ended | |
Apr. 20, 2024 | May 24, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 20, 2024 | |
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, $0.0001 par value | |
Trading Symbol | AAP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,622,297 | |
Entity Central Index Key | 0001158449 | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Contingencies
Contingencies | 4 Months Ended |
Apr. 20, 2024 USD ($) | |
Notes to Financial Statements [Abstract] | |
Legal Matters and Contingencies | 13. Contingencies On October 9, 2023 and October 27, 2023, two putative class actions on behalf of purchasers of the Company’s securities who purchased or otherwise acquired their securities between November 16, 2022 and May 30, 2023, inclusive (the “Class Period”), were commenced against the Company and certain of the Company’s former officers in the United States District Court for the Eastern District of North Carolina. The plaintiffs allege that the defendants made certain false and materially misleading statements during the alleged Class Period in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. These cases were consolidated on February 9, 2024 and the court-appointed lead plaintiff filed a consolidated complaint on April 22, 2024. The consolidated complaint proposes a Class Period of November 16, 2022 to November 15, 2023 and alleges that defendants made false and misleading statements in connection with (a) the Company’s 2023 guidance and (b) certain accounting issues previously disclosed by the Company. The defendants’ response to the consolidated complaint is due on June 21, 2024. The Company strongly disputes the allegations and intends to defend the case vigorously. On January 17, 2024, February 20, 2024 and February 26, 2024, derivative shareholder complaints were commenced against the Company’s directors and certain former officers alleging derivative liability for the allegations made in the securities class action complaints noted above. The court consolidated these actions and appointed co-lead counsel on April 9, 2024. The defendants’ response to the complaints is due on June 10, 2024. In the normal course of business, the Company identified a potential discrepancy in trade compliance pertaining to customs transactions. The Company conducted a thorough review of transactions and identified an immaterial amount owed of less than $100,000 during the five-year lookback period. |
Loss Contingency Accrual | $ 100,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 20, 2024 | Dec. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 451,003 | $ 503,471 |
Receivables, net | 825,384 | 800,141 |
Inventories | 4,828,314 | 4,857,702 |
Other current assets | 236,507 | 215,707 |
Total current assets | 6,341,208 | 6,377,021 |
Property and equipment, net of accumulated depreciation of $2,942,261 and $2,857,726 | 1,611,251 | 1,648,546 |
Operating lease right-of-use assets | 2,589,504 | 2,578,776 |
Goodwill | 989,921 | 991,743 |
Other intangible assets, net | 583,547 | 593,341 |
Other assets | 85,679 | 86,899 |
Total assets | 12,201,110 | 12,276,326 |
Current liabilities: | ||
Accounts payable | 4,031,299 | 4,177,974 |
Accrued expenses | 668,205 | 671,237 |
Current portion of long-term debt | 0 | 0 |
Other current liabilities | 510,345 | 458,194 |
Total current liabilities | 5,209,849 | 5,307,405 |
Long-term debt | 1,787,221 | 1,786,361 |
Noncurrent operating lease liabilities | 2,191,201 | 2,215,766 |
Deferred income taxes | 364,564 | 362,542 |
Other long-term liabilities | 83,625 | 84,524 |
Total Liabilities | 9,636,460 | 9,756,598 |
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 | 963,741 | 946,099 |
Treasury stock, at cost | (2,936,624) | (2,933,286) |
Accumulated other comprehensive loss | (46,450) | (52,232) |
Retained earnings | 4,583,975 | 4,559,139 |
Total stockholders’ equity | 2,564,650 | 2,519,728 |
Liabilities and Equity | $ 12,201,110 | $ 12,276,326 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Apr. 20, 2024 | Dec. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 2,942,261 | $ 2,857,726 |
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. 20, 2024 | Apr. 22, 2023 | |
Income Statement [Abstract] | ||
Net sales | $ 3,406,254 | $ 3,417,594 |
Cost of sales, including purchasing and warehousing costs | 1,977,180 | 1,955,666 |
Gross profit | 1,429,074 | 1,461,928 |
Selling, general and administrative expenses | 1,343,053 | 1,363,990 |
Operating income | 86,021 | 97,938 |
Other, net: | ||
Interest expense | (24,875) | (29,718) |
Other (expense) income, net | (1,290) | (674) |
Total other, net | (26,165) | (30,392) |
Income before provision for income taxes | 59,856 | 67,546 |
Provision for income taxes | 19,844 | 19,223 |
Net income | $ 40,012 | $ 48,323 |
Basic earnings per common share (in dollars per share) | $ 0.67 | $ 0.81 |
Weighted-average common shares outstanding | 59,558 | 59,334 |
Diluted earnings per common share (in dollars per share) | $ 0.67 | $ 0.81 |
Weighted-average common shares outstanding | 59,841 | 59,544 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 40,012 | $ 48,323 |
Other comprehensive (loss) income: | ||
Changes in net unrecognized other postretirement benefits, net of tax of $(21) and $70 | (58) | 197 |
Currency translation adjustments | 5,840 | 567 |
Total other comprehensive (loss) income | 5,782 | 764 |
Comprehensive income | $ 45,794 | $ 49,087 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Changes in net unrecognized other postretirment benefits, net of tax | $ (21) | $ 70 |
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 Dec. 31, 2022 | 59,264 | |||||
Balance at Dec. 31, 2022 | $ 2,599,192 | $ 8 | $ 897,560 | $ (2,918,768) | $ (44,695) | $ 4,665,087 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 48,323 | 48,323 | ||||
Total other comprehensive income (loss) | 764 | 764 | ||||
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 | 2,562,720 | $ 8 | 914,184 | (2,931,373) | (43,931) | 4,623,832 |
Balance (in shares) at Dec. 30, 2023 | 59,512 | |||||
Balance at Dec. 30, 2023 | 2,519,728 | $ 8 | 946,099 | (2,933,286) | (52,232) | 4,559,139 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 40,012 | 40,012 | ||||
Total other comprehensive income (loss) | 5,782 | 5,782 | ||||
Restricted stock and deferred stock units vested (in shares) | 132 | |||||
Share-based compensation | 16,696 | 16,696 | ||||
Stock issued under employee stock purchase plan (in shares) | 28 | |||||
Stock issued under employee stock purchase plan | 946 | 946 | ||||
Repurchases of common stock (in shares) | (49) | |||||
Repurchases of common stock | (3,338) | (3,338) | ||||
Cash dividends declared | (15,176) | (15,176) | ||||
Balance (in shares) at Apr. 20, 2024 | 59,623 | |||||
Balance at Apr. 20, 2024 | $ 2,564,650 | $ 8 | $ 963,741 | $ (2,936,624) | $ (46,450) | $ 4,583,975 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) - $ / shares | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared (per common share) | $ 0.25 | $ 1.50 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 40,012 | $ 48,323 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 94,711 | 92,554 |
Share-based compensation | 16,696 | 16,524 |
Loss and impairment of long-lived assets | (18,368) | 90 |
Provision for deferred income taxes | 2,637 | 6,899 |
Other | 1,164 | 849 |
Net change in: | ||
Receivables, net | (27,469) | (85,827) |
Inventories | 20,017 | (104,355) |
Accounts payable | (141,323) | 424,190 |
Accrued expenses | 1,270 | 89,666 |
Other assets and liabilities, net | 13,341 | (23,057) |
Net cash provided by operating activities | 2,688 | (382,524) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (48,957) | (89,996) |
Proceeds from sales of property and equipment | 10,028 | 325 |
Net cash used in investing activities | (38,929) | (89,671) |
Cash flows from financing activities: | ||
Borrowings under credit facilities | 0 | 2,886,000 |
Payments on credit facilities | 0 | (2,955,000) |
Borrowings on senior unsecured notes | 0 | 599,571 |
Dividends paid | (14,966) | (89,487) |
Proceeds from (Payments to) Noncontrolling Interests | (7,149) | 0 |
Proceeds from Issuance of Common Stock | 946 | 1,100 |
Repurchases of common stock | (3,338) | (12,605) |
Proceeds from (Payments for) Other Financing Activities | (1,137) | (4,377) |
Net cash used in financing activities | (25,644) | (425,202) |
Effect of exchange rate changes on cash | 9,417 | 68 |
Net decrease in cash and cash equivalents | (52,468) | (46,925) |
Cash and cash equivalents, beginning of period | 503,471 | 270,805 |
Cash and cash equivalents, end of period | 451,003 | 223,880 |
Non-cash transactions: | ||
Accrued purchases of property and equipment | $ 8,585 | $ 6,909 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 4 Months Ended |
Apr. 20, 2024 | |
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 the Company 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 “the Company”). As of April 20, 2024,the Company operated a total of 4,777 stores and 320 branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. In addition, as of April 20, 2024, the Company served 1,152 independently owned Carquest branded stores across the same geographic locations served by the Company’s stores and branches in addition to Mexico and various Caribbean islands. The Company’s stores operate primarily under the trade names “Advance Auto Parts” and “Carquest” and the Company’s branches operate under the “Worldpac” and “Autopart International” trade names. Basis of Presentation 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 the Company’s Annual Report on Form 10-K for 2023 (“2023 Form 10-K”) as filed with the SEC on March 12, 2024. 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. The Company’s first quarter of the year contains sixteen weeks. The Company’s remaining three quarters each consist of twelve weeks. Revision of Previously Issued Financial Statements for Correction of Immaterial Errors During the year ended December 30, 2023, the Company identified errors impacting cost of sales, selling, general and administrative expenses (“SG&A”) and other income (expense), net, of $62.9 million, $36.6 million and $1.7 million incurred in prior years but not previously recognized. These charges primarily related to product costs and vendor credits. Management assessed the materiality of the errors, including the presentation on prior period consolidated financial statements, on a qualitative and quantitative basis in accordance with SEC Staff Accounting Bulletin No. 99, Materiality, codified in Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections. The Company concluded that these errors and the related impacts did not result in a material misstatement of its previously issued consolidated financial statements as of and for the years ended December 31, 2022 and January 1, 2022 and its previously issued unaudited condensed consolidated interim financial statements as of and for the sixteen weeks ended April 22, 2023; the twelve and twenty-eight weeks ended July 15, 2023; and the twelve and forty weeks ended October 7, 2023. Correcting the cumulative effect of these errors in the fifty-two weeks ended December 30, 2023 would have had a significant effect on the results of operations for such periods. The Company has corrected the relevant prior periods of its consolidated financial statements and related footnotes for these and other immaterial corrections for comparative purposes, as previously disclosed in Note 18. Immaterial Restatement of Prior Period Financial Statements |
Significant Acounting Policies
Significant Acounting Policies | 4 Months Ended |
Apr. 20, 2024 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Revenues The following table summarizes disaggregated revenue from contracts with customers by product group: Sixteen Weeks Ended April 20, 2024 April 22, 2023 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 - Not Yet Adopted Disclosure Improvements In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements (“ASU 2023-06”), which defers when companies will be required to improve and clarify disclosure and presentation requirements by June 2027. ASU 2023-06 applies to all entities subject to meeting the SEC disclosure requirements. These updates would require additional qualitative information to the statement of cash flows, earnings per share, debt and shareholder’s equity disclosures. The related disclosures are effective for the fiscal year beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-06 on the consolidated financial statements and related disclosures, and does not believe it will have a material impact on the consolidated financial statements. Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires a company to disclose additional, more detailed information about a reportable segment’s significant expenses, even if there is one reportable segment, and is intended to improve the disclosures about a public entity’s reportable segments. The ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2023-07 and does not believe it will have a material impact on the consolidated financial statements and segment reporting. Income Tax Disclosure Improvements In December 2023, the FASB issued ASU 2023-09, Income Taxes (“ASU 2023-09”) , which requires a company to enhance their income tax disclosures. In each annual reporting period, the company should disclose the specific categories used in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold, including disaggregation of taxes paid by jurisdiction. The related disclosures are effective for the fiscal year beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-09 |
Inventories
Inventories | 4 Months Ended |
Apr. 20, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The Company used the last in, first out (“LIFO”) method of accounting for approximately 91.3% of inventories as of April 20, 2024 and 91.4% as of December 30, 2023. As a result, the Company recorded a reduction to cost of sales of $7.1 million for the sixteen weeks ended April 20, 2024 and $6.6 million for the sixteen weeks ended April 22, 2023 to state inventories at LIFO. Purchasing and warehousing costs included in inventories as of April 20, 2024 and December 30, 2023 were $578.6 million and $576.9 million. Inventory balances were as follows: April 20, 2024 December 30, 2023 Inventories at first in, first out (“FIFO”) $ 5,005,232 $ 5,041,752 Adjustments to state inventories at LIFO (176,918) (184,050) Inventories at LIFO $ 4,828,314 $ 4,857,702 |
Intangible Assets
Intangible Assets | 4 Months Ended |
Apr. 20, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The Company’s definite-lived intangible assets include customer relationships and non-compete agreements. Amortization expense was $8.2 million and $9.2 million for the sixteen weeks ended April 20, 2024 and April 22, 2023. |
Receivables, net
Receivables, net | 4 Months Ended |
Apr. 20, 2024 | |
Receivables [Abstract] | |
Receivables, net | Receivables, net Receivables, net, consisted of the following: April 20, 2024 December 30, 2023 Trade $ 602,710 $ 558,953 Vendor 237,987 257,847 Other 12,064 10,930 Total receivables 852,761 827,730 Less: allowance for credit losses (27,377) (27,589) Receivables, net $ 825,384 $ 800,141 |
Long-term Debt and Fair Value o
Long-term Debt and Fair Value of Financial Instruments | 4 Months Ended |
Apr. 20, 2024 | |
Debt Disclosure [Abstract] | |
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 20, 2024 December 30, 2023 5.90% Senior Unsecured Notes due March 9, 2026 $ 298,597 $ 298,369 1.75% Senior Unsecured Notes due October 1, 2027 347,689 347,514 5.95% Senior Unsecured Notes due March 9, 2028 298,256 298,116 3.90% Senior Unsecured Notes due April 15, 2030 496,331 496,149 3.50% Senior Unsecured Notes due March 15, 2032 346,348 346,213 Revolver credit facility — — $ 1,787,221 $ 1,786,361 Less: Current portion of long-term debt — — Long-term debt, excluding the current portion $ 1,787,221 $ 1,786,361 Fair value of long-term debt $ 1,627,116 $ 1,641,409 Fair Value of Financial Assets and Liabilities The fair value of the Company’s senior unsecured notes was determined using Level 2 inputs based on quoted market prices. The carrying amounts of the Company’s 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 26, 2024, the Company entered into Amendment No. 4 (“Amendment No. 4”) to the Company’s unsecured revolving credit facility (“2021 Credit Agreement”) to enable certain addbacks to the definition of Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) contained therein for specific write-downs of inventory and vendor receivables . Amendment No. 4 also updated certain limitations on future incurrences of other indebtedness and liens, replacing the cap thereon of 10% of consolidated net tangible assets with $400 million, and eliminated the $250 million basket for accounts receivable securitization transactions. Amendment No. 4 made no other material changes to the terms of the 2021 Credit Agreement. 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. The Company 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. The Company was in compliance with the financial covenants with respect to the 2021 Credit Agreement as of April 20, 2024. As of April 20, 2024 and December 30, 2023, the Company had no outstanding borrowings, $1.2 billion of borrowing availability and no letters of credit outstanding under the 2021 Credit Agreement. As of April 20, 2024 and December 30, 2023, the Company had $91.2 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 the Company’s self-insurance policies. The Company was in compliance with financial covenants required by the Company’s debt arrangements as of April 20, 2024. Senior Unsecured Notes The Company’s 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, the Company 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. The Company’s 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, the Company incurred $2.9 million of debt issuance costs. The Company’s 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, the Company incurred $3.2 million of debt issuance costs. The Company’s 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, the Company incurred $1.6 million of debt issuance costs. The Company’s 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, the Company incurred $1.9 million of debt issuance costs. The Company may redeem some or all of the 2026 Notes and 2028 Notes (the “Notes”) at any time, or from time to time, prior to March 9, 2026 in the case of the 2026 Notes, or February 9, 2028 in the case of the 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, the Company 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 The Company is a guarantor of loans made by banks to various independently owned Carquest-branded stores that are customers of the Company. These loans totaled $107.5 million and $106.9 million as of April 20, 2024 and December 30, 2023 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 $203.2 million and $221.2 million as of April 20, 2024 and December 30, 2023. The Company believes that the likelihood of performance under these guarantees is remote. |
Supplier Finance Program | 11. Supplier Finance Programs The Company maintains supply chain financing agreements with third-party financial institutions to provide the Company’s suppliers with enhanced receivables options. Through these agreements, the Company’s suppliers, at their sole discretion, may elect to sell its receivables due from the Company to the third-party financial institution at terms negotiated between the supplier and the third-party financial institution. The Company does not provide any guarantees to any third party in connection with these financing arrangements. The Company’s obligations to suppliers, including amounts due and scheduled payment terms, are not impacted, and no assets are pledged under the agreements. All outstanding amounts due to third-party financial institutions related to suppliers participating in such financing arrangements are recorded within accounts payable and represent obligations outstanding under these supplier finance programs for invoices that were confirmed as valid and owed to the third-party financial institutions in the Company’s condensed consolidated balance sheets. As of April 20, 2024 and December 30, 2023, $3.3 billion and $3.4 billion of the Company’s accounts payable were to suppliers participating in these financing arrangements. |
Leases
Leases | 4 Months Ended |
Apr. 20, 2024 | |
Leases [Abstract] | |
Leases | Leases Substantially all of the Company’s 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 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 20, 2024 April 22, 2023 Operating lease cost $ 181,591 $ 173,659 Variable lease cost 58,660 51,346 Total lease cost $ 240,251 $ 225,005 Other information relating to the Company’s lease liabilities is as follows: Sixteen Weeks Ended April 20, 2024 April 22, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 153,863 $ 153,363 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 213,176 $ 181,167 |
Share Repurchase Program
Share Repurchase Program | 4 Months Ended |
Apr. 20, 2024 | |
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 20, 2024 and April 22, 2023, the Company did not purchase any shares of the Company’s common stock under the share repurchase program. The Company had $947.3 million remaining under the share repurchase program as of April 20, 2024. |
Earnings per Share
Earnings per Share | 4 Months Ended |
Apr. 20, 2024 | |
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 20, 2024 April 22, 2023 Numerator Net income applicable to common shares $ 40,012 $ 48,323 Denominator Basic weighted-average common shares 59,558 59,334 Dilutive impact of share-based awards 283 210 Diluted weighted-average common shares (1) 59,841 59,544 Basic earnings per common share $ 0.67 $ 0.81 Diluted earnings per common share $ 0.67 $ 0.81 (1) For the sixteen weeks ended April 20, 2024 and April 22, 2023, 357 thousand and 190 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. 20, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation During the sixteen weeks ended April 20, 2024, the Company granted 500 thousand time-based RSUs, 149 thousand market-based RSUs and 194 thousand stock options. The Company grants options to purchase common stock to certain employees under the Company’s 2023 Omnibus Incentive Compensation Plan. The general terms of the time-based and market-based RSUs and stock options are similar to awards previously granted by the Company. The Company records 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 and market-based RSUs granted during the sixteen weeks ended April 20, 2024 were $79.38 and $113.31 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 the Company’s 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 20, 2024 was $32.20 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 20, 2024 Risk-free interest rate (1) 4.1 % Expected term (2) 6 years Expected volatility (3) 42.6 % Expected dividend yield (4) 1.5 % (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 sufficient historical data is not available, the Company 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. The Company 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 the Company’s 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 20, 2024 was $3.3 million. As of April 20, 2024, there was $113.7 million of unrecognized compensation expense related to all share-based awards that is expected to be recognized over a weighted-average period of 1.8 years. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) Attributable to Parent | $ 40,012 | $ 48,323 |
Insider Trading Arrangements
Insider Trading Arrangements | 4 Months Ended |
Apr. 20, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Significant Acounting Policies
Significant Acounting Policies (Policies) | 4 Months Ended |
Apr. 20, 2024 | |
Accounting Policies [Abstract] | |
Leases | Total lease cost is included in cost of sales and 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 the Company’s 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. 20, 2024 | |
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 20, 2024 April 22, 2023 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. 20, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory balances were as follows: April 20, 2024 December 30, 2023 Inventories at first in, first out (“FIFO”) $ 5,005,232 $ 5,041,752 Adjustments to state inventories at LIFO (176,918) (184,050) Inventories at LIFO $ 4,828,314 $ 4,857,702 |
Receivables, net (Tables)
Receivables, net (Tables) | 4 Months Ended |
Apr. 20, 2024 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Receivables, net, consisted of the following: April 20, 2024 December 30, 2023 Trade $ 602,710 $ 558,953 Vendor 237,987 257,847 Other 12,064 10,930 Total receivables 852,761 827,730 Less: allowance for credit losses (27,377) (27,589) Receivables, net $ 825,384 $ 800,141 |
Long-term Debt and Fair Value_2
Long-term Debt and Fair Value of Financial Instruments (Tables) | 4 Months Ended |
Apr. 20, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consists of the following: April 20, 2024 December 30, 2023 5.90% Senior Unsecured Notes due March 9, 2026 $ 298,597 $ 298,369 1.75% Senior Unsecured Notes due October 1, 2027 347,689 347,514 5.95% Senior Unsecured Notes due March 9, 2028 298,256 298,116 3.90% Senior Unsecured Notes due April 15, 2030 496,331 496,149 3.50% Senior Unsecured Notes due March 15, 2032 346,348 346,213 Revolver credit facility — — $ 1,787,221 $ 1,786,361 Less: Current portion of long-term debt — — Long-term debt, excluding the current portion $ 1,787,221 $ 1,786,361 Fair value of long-term debt $ 1,627,116 $ 1,641,409 |
Leases (Tables)
Leases (Tables) | 4 Months Ended |
Apr. 20, 2024 | |
Leases [Abstract] | |
Lease, Cost | Total lease cost comprised of the following: Sixteen Weeks Ended April 20, 2024 April 22, 2023 Operating lease cost $ 181,591 $ 173,659 Variable lease cost 58,660 51,346 Total lease cost $ 240,251 $ 225,005 |
Schedule of Other Information Relating to Lease Liabilities | Other information relating to the Company’s lease liabilities is as follows: Sixteen Weeks Ended April 20, 2024 April 22, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 153,863 $ 153,363 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 213,176 $ 181,167 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 4 Months Ended |
Apr. 20, 2024 | |
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 20, 2024 April 22, 2023 Numerator Net income applicable to common shares $ 40,012 $ 48,323 Denominator Basic weighted-average common shares 59,558 59,334 Dilutive impact of share-based awards 283 210 Diluted weighted-average common shares (1) 59,841 59,544 Basic earnings per common share $ 0.67 $ 0.81 Diluted earnings per common share $ 0.67 $ 0.81 (1) For the sixteen weeks ended April 20, 2024 and April 22, 2023, 357 thousand and 190 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. 20, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Sixteen Weeks Ended April 20, 2024 Risk-free interest rate (1) 4.1 % Expected term (2) 6 years Expected volatility (3) 42.6 % Expected dividend yield (4) 1.5 % |
Immaterial Restatement of Prior
Immaterial Restatement of Prior Period Financial Statements (Tables) | 4 Months Ended |
Apr. 20, 2024 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | 12. Immaterial Restatement of Prior Period Financial Statements As discussed in Note 1, the Company made corrections to the consolidated financial statements for periods ended December 31, 2022, January 1, 2022 and the quarterly periods of 2023. A summary of the corrections related to prior periods presented are as follows (tables may not foot or cross foot due to rounding): Condensed Consolidated Statement of Operations April 22, 2023 Sixteen Weeks Ended As Previously Reported Adjustments As Corrected Cost of sales $ 1,946,931 $ 8,735 $ 1,955,666 Gross profit 1,470,663 (8,735) 1,461,928 Selling, general and administrative expenses 1,380,664 (16,674) 1,363,990 Operating income 89,999 7,939 97,938 Income before provision for income taxes 59,607 7,939 67,546 Provision for income taxes 16,956 2,267 19,223 Net income $ 42,651 $ 5,672 $ 48,323 Basic earnings per share $ 0.72 $ 0.09 $ 0.81 Diluted earnings per common share $ 0.72 $ 0.09 $ 0.81 Condensed Consolidated Statement of Comprehensive Income April 22, 2023 Sixteen Weeks Ended As Previously Reported Adjustments As Corrected Net income $ 42,651 $ 5,672 $ 48,323 Currency translation adjustments 591 (24) 567 Total other comprehensive loss 788 (24) 764 Comprehensive income $ 43,439 $ 5,648 $ 49,087 Condensed Consolidated Statements of Changes in Stockholders’ Equity Sixteen Weeks Ended April 22, 2023 Accumulated Other Retained Total Stockholders' Equity Sixteen Weeks As Previously Reported Balance at December 31, 2022 $ (45,143) $ 4,744,624 $ 2,678,281 Net income — 42,651 42,651 Total other comprehensive income 788 — 788 Balance at April 22, 2023 $ (44,355) $ 4,697,697 $ 2,636,161 Adjustments Balance at December 31, 2022 $ 448 $ (79,537) $ (79,089) Net income — 5,672 5,672 Total other comprehensive income (24) — (24) Balance at April 22, 2023 $ 424 $ (73,865) $ (73,441) As Corrected Balance at December 31, 2022 $ (44,695) $ 4,665,087 $ 2,599,192 Net income — 48,323 48,323 Total other comprehensive income 764 — 764 Balance at April 22, 2023 $ (43,931) $ 4,623,832 $ 2,562,720 Condensed Consolidated Statement of Cash Flows Sixteen Weeks Ended April 22, 2023 As Previously Reported Adjustments As Corrected Net income $ 42,651 $ 5,672 $ 48,323 Other, net 391 458 849 Net change in: Receivables, net (83,370) (2,457) (85,827) Inventories, net (100,178) (4,177) (104,355) Accounts payable (440,995) 16,805 (424,190) Accrued expenses 85,035 4,631 89,666 Other assets and liabilities, net 1,534 (24,591) (23,057) Net cash used in operating activities (378,865) (3,659) (382,524) Other, net (1) (3,919) (458) (4,377) Net cash used in financing activities 425,660 (458) 425,202 Effect of exchange rate changes on cash 93 (25) 68 Net (decrease) increase in cash and cash equivalents (42,783) (4,142) (46,925) Cash and cash equivalents, beginning of period 269,282 1,523 270,805 Cash and cash equivalents, end of period $ 226,499 $ (2,619) $ 223,880 (1) |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) $ in Thousands | 4 Months Ended | 12 Months Ended | |
Apr. 20, 2024 USD ($) store | Apr. 22, 2023 USD ($) | Dec. 30, 2023 | |
Basis of Presentation [Line Items] | |||
Selling, general and administrative expenses | $ 1,343,053 | $ 1,363,990 | |
Provision for income taxes | $ 19,844 | 19,223 | |
Immaterial Error Correction, Cost of Goods Sold | $62.9 million | ||
Immaterial Error Correction, Selling, General and Administrative | $36.6 million | ||
Immaterial Error Correction, Other Nonoperating Income (Expense) | $1.7 million | ||
Revision of Prior Period, Adjustment | |||
Basis of Presentation [Line Items] | |||
Selling, general and administrative expenses | (16,674) | ||
Provision for income taxes | $ 2,267 | ||
Stores [Member] | |||
Basis of Presentation [Line Items] | |||
Number of Stores | store | 4,777 | ||
Branches [Member] | |||
Basis of Presentation [Line Items] | |||
Number of Stores | store | 320 | ||
Independently owned Carquest store locations [Member] | |||
Basis of Presentation [Line Items] | |||
Number of Stores | store | 1,152 |
Significant Acounting Policie_3
Significant Acounting Policies (Details) | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
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. 20, 2024 | Apr. 22, 2023 | Dec. 30, 2023 | |
Inventory [Line Items] | |||
Percentage of LIFO Inventory | 91.30% | 91.40% | |
Inventory, LIFO Reserve, Effect on Income, Net | $ (7,100) | $ (6,600) | |
Inventories at first in, first out (“FIFO”) | 5,005,232 | $ 5,041,752 | |
Adjustments to state inventories at LIFO | (176,918) | (184,050) | |
Inventories at LIFO | 4,828,314 | 4,857,702 | |
Purchasing and Warehousing Costs included in Inventory at FIFO | $ 578,600 | $ 576,900 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 8.2 | $ 9.2 |
Receivables, net (Details)
Receivables, net (Details) - USD ($) $ in Thousands | Apr. 20, 2024 | Dec. 30, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 852,761 | $ 827,730 |
Less: Allowance for doubtful accounts | (27,377) | (27,589) |
Receivables, net | 825,384 | 800,141 |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 602,710 | 558,953 |
Accounts Receivable, Vendor [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 237,987 | 257,847 |
Accounts Receivable, Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 12,064 | $ 10,930 |
Long-term Debt and Fair Value_3
Long-term Debt and Fair Value of Financial Instruments (Details) - USD ($) | 4 Months Ended | |||||
Apr. 20, 2024 | Dec. 30, 2023 | Mar. 09, 2023 | Mar. 04, 2022 | Sep. 29, 2020 | Apr. 16, 2020 | |
Debt Instrument [Line Items] | ||||||
Fair value of long-term debt | $ 1,627,116,000 | $ 1,641,409,000 | ||||
Guarantor Obligations, Maximum Exposure | 107,500,000 | 106,900,000 | ||||
Guarantor Obligation, Collateral Amount | 203,200,000 | 221,200,000 | ||||
Long-term debt | 1,787,221,000 | 1,786,361,000 | ||||
Debt, Long-term and Short-term, Combined Amount | 1,787,221,000 | 1,786,361,000 | ||||
Long-term Debt, Current Maturities | $ 0 | 0 | ||||
Document Period End Date | Apr. 20, 2024 | |||||
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 20, 2024 December 30, 2023 5.90% Senior Unsecured Notes due March 9, 2026 $ 298,597 $ 298,369 1.75% Senior Unsecured Notes due October 1, 2027 347,689 347,514 5.95% Senior Unsecured Notes due March 9, 2028 298,256 298,116 3.90% Senior Unsecured Notes due April 15, 2030 496,331 496,149 3.50% Senior Unsecured Notes due March 15, 2032 346,348 346,213 Revolver credit facility — — $ 1,787,221 $ 1,786,361 Less: Current portion of long-term debt — — Long-term debt, excluding the current portion $ 1,787,221 $ 1,786,361 Fair value of long-term debt $ 1,627,116 $ 1,641,409 Fair Value of Financial Assets and Liabilities The fair value of the Company’s senior unsecured notes was determined using Level 2 inputs based on quoted market prices. The carrying amounts of the Company’s 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 26, 2024, the Company entered into Amendment No. 4 (“Amendment No. 4”) to the Company’s unsecured revolving credit facility (“2021 Credit Agreement”) to enable certain addbacks to the definition of Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) contained therein for specific write-downs of inventory and vendor receivables . Amendment No. 4 also updated certain limitations on future incurrences of other indebtedness and liens, replacing the cap thereon of 10% of consolidated net tangible assets with $400 million, and eliminated the $250 million basket for accounts receivable securitization transactions. Amendment No. 4 made no other material changes to the terms of the 2021 Credit Agreement. 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. The Company 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. The Company was in compliance with the financial covenants with respect to the 2021 Credit Agreement as of April 20, 2024. As of April 20, 2024 and December 30, 2023, the Company had no outstanding borrowings, $1.2 billion of borrowing availability and no letters of credit outstanding under the 2021 Credit Agreement. As of April 20, 2024 and December 30, 2023, the Company had $91.2 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 the Company’s self-insurance policies. The Company was in compliance with financial covenants required by the Company’s debt arrangements as of April 20, 2024. Senior Unsecured Notes The Company’s 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, the Company 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. The Company’s 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, the Company incurred $2.9 million of debt issuance costs. The Company’s 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, the Company incurred $3.2 million of debt issuance costs. The Company’s 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, the Company incurred $1.6 million of debt issuance costs. The Company’s 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, the Company incurred $1.9 million of debt issuance costs. The Company may redeem some or all of the 2026 Notes and 2028 Notes (the “Notes”) at any time, or from time to time, prior to March 9, 2026 in the case of the 2026 Notes, or February 9, 2028 in the case of the 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, the Company 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 The Company is a guarantor of loans made by banks to various independently owned Carquest-branded stores that are customers of the Company. These loans totaled $107.5 million and $106.9 million as of April 20, 2024 and December 30, 2023 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 $203.2 million and $221.2 million as of April 20, 2024 and December 30, 2023. The Company believes that the likelihood of performance under these guarantees is remote. | |||||
Debt Instrument, Restrictive Covenants | $400 million | |||||
Debt Instrument, Restrictive Covenants, Eliminated | $250 million | |||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Letters of Credit Outstanding, Amount | $ 0 | |||||
Debt, Long-term and Short-term, Combined Amount | 0 | 0 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | 1,200,000,000 | |||||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | |||||
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 | 5.90% | |||||
Debt Issuance, Percentage Of Principal | 99.94% | |||||
Debt Issuance Costs, Gross | $ 1,600,000 | |||||
Debt Instrument, Face Amount | $ 300 | |||||
5.95% senior unsecured notes (2028 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.95% | |||||
Debt Issuance, Percentage Of Principal | 99.92% | |||||
Debt Issuance Costs, Gross | $ 1,900,000 | |||||
Debt Instrument, Face Amount | $ 300,000,000 | |||||
Bilateral Letter of Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Letters of Credit Outstanding, Amount | $ 91,200,000 | |||||
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 | $ 347,689,000 | 347,514,000 | ||||
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 | $ 496,331,000 | 496,149,000 | ||||
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 | $ 346,348,000 | 346,213,000 | ||||
Senior Notes [Member] | 5.90% senior unsecured notes (2026 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.90% | 590% | ||||
Long-term debt | $ 298,597,000 | 298,369,000 | ||||
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 | $ 298,256,000 | $ 298,116,000 |
Supplier Finance Programs
Supplier Finance Programs - USD ($) | 4 Months Ended | 12 Months Ended |
Apr. 20, 2024 | Dec. 30, 2023 | |
Supplier Finance Program [Line Items] | ||
Document Period End Date | Apr. 20, 2024 | |
Payments to Suppliers | $ 3,300,000,000 | $ 3,400,000,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 181,591 | $ 173,659 |
Variable lease cost | 58,660 | 51,346 |
Total lease cost | 240,251 | 225,005 |
Cash paid for amounts included in the measurement of lease liabilities: | 153,863 | 153,363 |
Right-of-use assets obtained in exchange for lease obligations: | 213,176 | $ 181,167 |
Sale and Leaseback Transaction, Gain (Loss), Net | $ 20,800 | |
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) $ in Millions | 4 Months Ended |
Apr. 20, 2024 USD ($) | |
Stock Repurchases: [Abstract] | |
Stock Repurchase Program, Authorized Amount | $ 2,700 |
Treasury Stock, Shares, Acquired as Part of Authorized Plan | any |
Share Repurchase Program, Remaining Authorized Repurchase Amount | $ 947.3 |
Share Repurchase Program [Line Items] | |
Stock Repurchase Program, Authorized Amount | $ 2,700 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 4 Months Ended | |
Apr. 20, 2024 | Apr. 22, 2023 | |
Earnings Per Share [Abstract] | ||
Net income | $ 40,012 | $ 48,323 |
Basic weighted-average common shares (in shares) | 59,558 | 59,334 |
Dilutive impact of share-based awards (in shares) | 283 | 210 |
Diluted weighted-average common shares (in shares) | 59,841 | 59,544 |
Basic earnings per common share (in dollars per share) | $ 0.67 | $ 0.81 |
Diluted earnings per common share (in dollars per share) | $ 0.67 | $ 0.81 |
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) | 357 | 190 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Millions | 4 Months Ended |
Apr. 20, 2024 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted (in shares) | shares | 194 |
Weighted-average fair value of stock options granted | $ / shares | $ 32.20 |
Tax benefit from compensation expense | $ | $ 3.3 |
Unrecognized compensation expense | $ | $ 113.7 |
Unrecognized compensation expense, period for recognition | 1 year 9 months 18 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | shares | 500 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 79.38 |
Market-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | shares | 149 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 113.31 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options, Valuation Assumptions (Details) - Share-Based Payment Arrangement, Option | 4 Months Ended |
Apr. 20, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 4.10% |
Expected term | 6 years |
Expected volatility | 42.60% |
Expected dividend yield | 1.50% |
Immaterial Restatement of Pri_2
Immaterial Restatement of Prior Period Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands | 4 Months Ended | |||
Apr. 20, 2024 | Apr. 22, 2023 | Dec. 30, 2023 | Dec. 31, 2022 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 451,003 | $ 223,880 | $ 503,471 | $ 270,805 |
Receivables, net | 825,384 | 800,141 | ||
Inventories | 4,828,314 | 4,857,702 | ||
Other current assets | 236,507 | 215,707 | ||
Assets, Current | 6,341,208 | 6,377,021 | ||
Assets | 12,201,110 | 12,276,326 | ||
Accounts payable | 4,031,299 | 4,177,974 | ||
Accrued expenses | 668,205 | 671,237 | ||
Liabilities, Current | 5,209,849 | 5,307,405 | ||
Deferred income taxes | 364,564 | 362,542 | ||
Other Liabilities, Noncurrent | 83,625 | 84,524 | ||
Liabilities | 9,636,460 | 9,756,598 | ||
Accumulated other comprehensive loss | (46,450) | (52,232) | ||
Retained earnings | 4,583,975 | 4,559,139 | ||
Stockholders' Equity Attributable to Parent | 2,564,650 | 2,562,720 | 2,519,728 | 2,599,192 |
Liabilities and Equity | 12,201,110 | 12,276,326 | ||
Cost of sales, including purchasing and warehousing costs | 1,977,180 | 1,955,666 | ||
Gross Profit | 1,429,074 | 1,461,928 | ||
Selling, general and administrative expenses | 1,343,053 | 1,363,990 | ||
Operating Income (Loss) | 86,021 | 97,938 | ||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 59,856 | 67,546 | ||
Provision for income taxes | 19,844 | 19,223 | ||
Net Income (Loss) Attributable to Parent | 40,012 | 48,323 | ||
Other | 1,164 | 849 | ||
Receivables, net | (27,469) | (85,827) | ||
Inventories | 20,017 | (104,355) | ||
Accounts payable | 141,323 | (424,190) | ||
Accrued expenses | 1,270 | 89,666 | ||
Other assets and liabilities, net | 13,341 | (23,057) | ||
Net Cash Provided by (Used in) Operating Activities | 2,688 | (382,524) | ||
Proceeds from (Payments for) Other Financing Activities | (1,137) | (4,377) | ||
Net Cash Provided by (Used in) Financing Activities | (25,644) | (425,202) | ||
Effect of exchange rate changes on cash | 9,417 | 68 | ||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (52,468) | (46,925) | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 5,840 | 567 | ||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | 764 | |||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ 45,794 | $ 49,087 | ||
Basic earnings per common share (in dollars per share) | $ 0.67 | $ 0.81 | ||
Earnings Per Share, Diluted | $ 0.67 | $ 0.81 | ||
Retained Earnings | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Stockholders' Equity Attributable to Parent | $ 4,583,975 | $ 4,623,832 | 4,559,139 | 4,665,087 |
Net Income (Loss) Attributable to Parent | 40,012 | 48,323 | ||
Accumulated Other Comprehensive Loss | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Stockholders' Equity Attributable to Parent | $ (46,450) | (43,931) | $ (52,232) | (44,695) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | 764 | |||
Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 226,499 | 269,282 | ||
Stockholders' Equity Attributable to Parent | 2,636,161 | 2,678,281 | ||
Cost of sales, including purchasing and warehousing costs | 1,946,931 | |||
Gross Profit | 1,470,663 | |||
Selling, general and administrative expenses | 1,380,664 | |||
Operating Income (Loss) | 89,999 | |||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 59,607 | |||
Provision for income taxes | 16,956 | |||
Net Income (Loss) Attributable to Parent | 42,651 | |||
Other | (391) | |||
Receivables, net | 83,370 | |||
Inventories | 100,178 | |||
Accounts payable | 440,995 | |||
Accrued expenses | 85,035 | |||
Other assets and liabilities, net | (1,534) | |||
Net Cash Provided by (Used in) Operating Activities | (378,865) | |||
Proceeds from (Payments for) Other Financing Activities | (3,919) | |||
Net Cash Provided by (Used in) Financing Activities | 425,660 | |||
Effect of exchange rate changes on cash | 93 | |||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (42,783) | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 591 | |||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | 788 | |||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ 43,439 | |||
Basic earnings per common share (in dollars per share) | $ 0.72 | |||
Earnings Per Share, Diluted | $ 0.72 | |||
Previously Reported | Retained Earnings | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Stockholders' Equity Attributable to Parent | $ 4,697,697 | 4,744,624 | ||
Net Income (Loss) Attributable to Parent | 42,651 | |||
Previously Reported | Accumulated Other Comprehensive Loss | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Stockholders' Equity Attributable to Parent | (44,355) | (45,143) | ||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | 788 | |||
Revision of Prior Period, Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (2,619) | 1,523 | ||
Stockholders' Equity Attributable to Parent | (73,441) | (79,089) | ||
Cost of sales, including purchasing and warehousing costs | 8,735 | |||
Gross Profit | (8,735) | |||
Selling, general and administrative expenses | (16,674) | |||
Operating Income (Loss) | 7,939 | |||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 7,939 | |||
Provision for income taxes | 2,267 | |||
Net Income (Loss) Attributable to Parent | 5,672 | |||
Other | (458) | |||
Receivables, net | 2,457 | |||
Inventories | 4,177 | |||
Accounts payable | (16,805) | |||
Accrued expenses | 4,631 | |||
Other assets and liabilities, net | 24,591 | |||
Net Cash Provided by (Used in) Operating Activities | (3,659) | |||
Proceeds from (Payments for) Other Financing Activities | (458) | |||
Net Cash Provided by (Used in) Financing Activities | (458) | |||
Effect of exchange rate changes on cash | (25) | |||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (4,142) | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (24) | |||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | (24) | |||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ 5,648 | |||
Basic earnings per common share (in dollars per share) | $ 0.09 | |||
Earnings Per Share, Diluted | $ 0.09 | |||
Revision of Prior Period, Adjustment | Retained Earnings | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Stockholders' Equity Attributable to Parent | $ (73,865) | (79,537) | ||
Net Income (Loss) Attributable to Parent | 5,672 | |||
Revision of Prior Period, Adjustment | Accumulated Other Comprehensive Loss | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Stockholders' Equity Attributable to Parent | 424 | $ 448 | ||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | $ (24) |