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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Advance Auto Parts | NYSE:AAP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 74.92 | 0 | 01:00:00 |
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Delaware
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54-2049910
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading symbol
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Name of each exchange on which registered
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Common Stock, $0.0001 par value
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AAP
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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ITEM 1.
|
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
July 13, 2019
|
|
December 29, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
747,719
|
|
|
$
|
896,527
|
|
Receivables, net
|
713,061
|
|
|
624,972
|
|
||
Inventories
|
4,374,933
|
|
|
4,362,547
|
|
||
Other current assets
|
126,758
|
|
|
198,408
|
|
||
Total current assets
|
5,962,471
|
|
|
6,082,454
|
|
||
Property and equipment, net of accumulated depreciation of $1,985,197 and $1,918,502
|
1,381,388
|
|
|
1,368,985
|
|
||
Operating lease right-of-use assets
|
2,360,019
|
|
|
—
|
|
||
Goodwill
|
992,432
|
|
|
990,237
|
|
||
Intangible assets, net
|
521,969
|
|
|
550,593
|
|
||
Other assets
|
49,667
|
|
|
48,379
|
|
||
|
$
|
11,267,946
|
|
|
$
|
9,040,648
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
3,317,972
|
|
|
$
|
3,172,790
|
|
Accrued expenses
|
587,119
|
|
|
623,141
|
|
||
Other current liabilities
|
467,314
|
|
|
90,019
|
|
||
Total current liabilities
|
4,372,405
|
|
|
3,885,950
|
|
||
Long-term debt
|
746,951
|
|
|
1,045,720
|
|
||
Noncurrent operating lease liabilities
|
2,032,350
|
|
|
—
|
|
||
Deferred income taxes
|
313,903
|
|
|
318,353
|
|
||
Other long-term liabilities
|
131,035
|
|
|
239,812
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, nonvoting, $0.0001 par value
|
—
|
|
|
—
|
|
||
Common stock, voting, $0.0001 par value
|
8
|
|
|
8
|
|
||
Additional paid-in capital
|
715,747
|
|
|
694,797
|
|
||
Treasury stock, at cost
|
(572,592
|
)
|
|
(425,954
|
)
|
||
Accumulated other comprehensive loss
|
(33,481
|
)
|
|
(44,193
|
)
|
||
Retained earnings
|
3,561,620
|
|
|
3,326,155
|
|
||
Total stockholders’ equity
|
3,671,302
|
|
|
3,550,813
|
|
||
|
$
|
11,267,946
|
|
|
$
|
9,040,648
|
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
|
July 13, 2019
|
|
July 14, 2018
|
|
July 13, 2019
|
|
July 14, 2018
|
||||||||
Net Sales
|
$
|
2,332,246
|
|
|
$
|
2,326,652
|
|
|
$
|
5,284,283
|
|
|
$
|
5,200,500
|
|
Cost of sales,
including purchasing and warehousing costs
|
1,322,808
|
|
|
1,315,093
|
|
|
2,970,233
|
|
|
2,916,658
|
|
||||
Gross profit
|
1,009,438
|
|
|
1,011,559
|
|
|
2,314,050
|
|
|
2,283,842
|
|
||||
Selling, general and administrative expenses
|
838,666
|
|
|
844,018
|
|
|
1,935,338
|
|
|
1,918,061
|
|
||||
Operating income
|
170,772
|
|
|
167,541
|
|
|
378,712
|
|
|
365,781
|
|
||||
Other, net:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(8,675
|
)
|
|
(12,855
|
)
|
|
(23,619
|
)
|
|
(30,537
|
)
|
||||
Other income, net
|
4,113
|
|
|
2,785
|
|
|
1,874
|
|
|
3,243
|
|
||||
Total other, net
|
(4,562
|
)
|
|
(10,070
|
)
|
|
(21,745
|
)
|
|
(27,294
|
)
|
||||
Income before provision for income taxes
|
166,210
|
|
|
157,471
|
|
|
356,967
|
|
|
338,487
|
|
||||
Provision for income taxes
|
41,390
|
|
|
39,635
|
|
|
89,647
|
|
|
83,925
|
|
||||
Net income
|
$
|
124,820
|
|
|
$
|
117,836
|
|
|
$
|
267,320
|
|
|
$
|
254,562
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
1.74
|
|
|
$
|
1.59
|
|
|
$
|
3.73
|
|
|
$
|
3.44
|
|
Weighted average common shares outstanding
|
71,738
|
|
|
74,054
|
|
|
71,767
|
|
|
74,011
|
|
||||
Diluted earnings per common share
|
$
|
1.73
|
|
|
$
|
1.59
|
|
|
$
|
3.71
|
|
|
$
|
3.43
|
|
Weighted average common shares outstanding
|
72,008
|
|
|
74,244
|
|
|
72,063
|
|
|
74,222
|
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
|
July 13, 2019
|
|
July 14, 2018
|
|
July 13, 2019
|
|
July 14, 2018
|
||||||||
Net income
|
$
|
124,820
|
|
|
$
|
117,836
|
|
|
$
|
267,320
|
|
|
$
|
254,562
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Changes in net unrecognized other postretirement benefit (costs) income, net of tax of $25, $24, $8 and $56
|
(69
|
)
|
|
(67
|
)
|
|
26
|
|
|
(158
|
)
|
||||
Currency translation adjustments
|
6,626
|
|
|
(7,035
|
)
|
|
10,686
|
|
|
(10,802
|
)
|
||||
Total other comprehensive income (loss)
|
6,557
|
|
|
(7,102
|
)
|
|
10,712
|
|
|
(10,960
|
)
|
||||
Comprehensive income
|
$
|
131,377
|
|
|
$
|
110,734
|
|
|
$
|
278,032
|
|
|
$
|
243,602
|
|
Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except per share data) (Unaudited)
|
||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
Twelve Weeks Ended July 13, 2019
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Treasury Stock, at Cost
|
|
Accumulated Other
Comprehensive Loss
|
|
Retained Earnings
|
|
Total
Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance, April 20, 2019
|
71,737
|
|
|
$
|
8
|
|
|
$
|
706,360
|
|
|
$
|
(560,245
|
)
|
|
$
|
(40,038
|
)
|
|
$
|
3,441,138
|
|
|
$
|
3,547,223
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,820
|
|
|
124,820
|
|
||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,557
|
|
|
—
|
|
|
6,557
|
|
||||||
Issuance of shares upon the exercise of stock appreciation rights
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
||||||
Restricted stock units and deferred stock units vested
|
34
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
8,441
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,441
|
|
||||||
Stock issued under employee stock purchase plan
|
6
|
|
|
—
|
|
|
970
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
970
|
|
||||||
Repurchases of common stock
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
(12,347
|
)
|
|
—
|
|
|
—
|
|
|
(12,347
|
)
|
||||||
Cash dividends declared ($0.06 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,338
|
)
|
|
(4,338
|
)
|
||||||
Balance, July 13, 2019
|
71,697
|
|
|
$
|
8
|
|
|
$
|
715,747
|
|
|
$
|
(572,592
|
)
|
|
$
|
(33,481
|
)
|
|
$
|
3,561,620
|
|
|
$
|
3,671,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Twelve Weeks Ended July 14, 2018
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Treasury Stock, at Cost
|
|
Accumulated Other
Comprehensive Loss
|
|
Retained Earnings
|
|
Total
Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance, April 21, 2018
|
74,030
|
|
|
$
|
8
|
|
|
$
|
672,913
|
|
|
$
|
(149,824
|
)
|
|
$
|
(28,812
|
)
|
|
$
|
3,052,336
|
|
|
$
|
3,546,621
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117,836
|
|
|
117,836
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,102
|
)
|
|
—
|
|
|
(7,102
|
)
|
||||||
Issuance of shares upon the exercise of stock appreciation rights
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
—
|
|
|
(211
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(211
|
)
|
||||||
Restricted stock units and deferred stock units vested
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
|
|
4,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,771
|
|
|||||||
Stock issued under employee stock purchase plan
|
7
|
|
|
—
|
|
|
943
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
943
|
|
||||||
Repurchases of common stock
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(433
|
)
|
|
—
|
|
|
—
|
|
|
(433
|
)
|
||||||
Cash dividends declared ($0.06 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,476
|
)
|
|
(4,476
|
)
|
||||||
Balance, July 14, 2018
|
74,081
|
|
|
$
|
8
|
|
|
$
|
678,416
|
|
|
$
|
(150,257
|
)
|
|
$
|
(35,914
|
)
|
|
$
|
3,165,696
|
|
|
$
|
3,657,949
|
|
|
Twenty-Eight Weeks Ended July 13, 2019
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Treasury Stock, at Cost
|
|
Accumulated Other
Comprehensive Loss
|
|
Retained Earnings
|
|
Total
Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||||||
Balance, December 29, 2018
|
72,460
|
|
|
$
|
8
|
|
|
$
|
694,797
|
|
|
$
|
(425,954
|
)
|
|
$
|
(44,193
|
)
|
|
$
|
3,326,155
|
|
|
$
|
3,550,813
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
267,320
|
|
|
267,320
|
|
||||||
Cumulative effect of accounting change from adoption of ASU 2016-02, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,165
|
)
|
|
(23,165
|
)
|
||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,712
|
|
|
—
|
|
|
10,712
|
|
||||||
Issuance of shares upon the exercise of stock appreciation rights
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
—
|
|
|
(123
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
||||||
Restricted stock units and deferred stock units vested
|
145
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
19,425
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,425
|
|
||||||
Stock issued under employee stock purchase plan
|
11
|
|
|
—
|
|
|
1,648
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,648
|
|
||||||
Repurchases of common stock
|
(921
|
)
|
|
—
|
|
|
—
|
|
|
(146,638
|
)
|
|
—
|
|
|
—
|
|
|
(146,638
|
)
|
||||||
Cash dividends declared ($0.12 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,690
|
)
|
|
(8,690
|
)
|
||||||
Balance, July 13, 2019
|
71,697
|
|
|
$
|
8
|
|
|
$
|
715,747
|
|
|
$
|
(572,592
|
)
|
|
$
|
(33,481
|
)
|
|
$
|
3,561,620
|
|
|
$
|
3,671,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Twenty-Eight Weeks Ended July 14, 2018
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Treasury Stock, at Cost
|
|
Accumulated Other
Comprehensive Loss
|
|
Retained Earnings
|
|
Total
Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||||||
Balance, December 30, 2017
|
73,936
|
|
|
$
|
8
|
|
|
$
|
664,646
|
|
|
$
|
(144,600
|
)
|
|
$
|
(24,954
|
)
|
|
$
|
2,920,096
|
|
|
$
|
3,415,196
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
254,562
|
|
|
254,562
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,960
|
)
|
|
—
|
|
|
(10,960
|
)
|
||||||
Issuance of shares upon the exercise of stock appreciation rights
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
—
|
|
|
(304
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(304
|
)
|
||||||
Restricted stock units and deferred stock units vested
|
163
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
|
|
12,413
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,413
|
|
|||||||
Stock issued under employee stock purchase plan
|
25
|
|
|
—
|
|
|
1,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,697
|
|
||||||
Repurchases of common stock
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(5,657
|
)
|
|
—
|
|
|
—
|
|
|
(5,657
|
)
|
||||||
Cash dividends declared ($0.12 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,962
|
)
|
|
(8,962
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
||||||
Balance, July 14, 2018
|
74,081
|
|
|
$
|
8
|
|
|
$
|
678,416
|
|
|
$
|
(150,257
|
)
|
|
$
|
(35,914
|
)
|
|
$
|
3,165,696
|
|
|
$
|
3,657,949
|
|
|
Twenty-Eight Weeks Ended
|
||||||
|
July 13, 2019
|
|
July 14, 2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
267,320
|
|
|
$
|
254,562
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
123,257
|
|
|
128,244
|
|
||
Share-based compensation
|
19,425
|
|
|
12,413
|
|
||
Loss and impairment of long-lived assets
|
2,297
|
|
|
4,757
|
|
||
Provision for deferred income taxes
|
2,930
|
|
|
11,195
|
|
||
Other
|
11,719
|
|
|
1,180
|
|
||
Net change in:
|
|
|
|
||||
Receivables, net
|
(85,941
|
)
|
|
(59,995
|
)
|
||
Inventories
|
(5,685
|
)
|
|
2,140
|
|
||
Accounts payable
|
142,002
|
|
|
19,083
|
|
||
Accrued expenses
|
(21,272
|
)
|
|
112,214
|
|
||
Other assets and liabilities, net
|
36,109
|
|
|
(41,825
|
)
|
||
Net cash provided by operating activities
|
492,161
|
|
|
443,968
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(111,425
|
)
|
|
(61,815
|
)
|
||
Proceeds from sales of property and equipment
|
8,566
|
|
|
578
|
|
||
Net cash used in investing activities
|
(102,859
|
)
|
|
(61,237
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Decrease in bank overdrafts
|
(70,265
|
)
|
|
(8,362
|
)
|
||
Redemption of senior unsecured notes
|
(310,047
|
)
|
|
—
|
|
||
Dividends paid
|
(13,028
|
)
|
|
(13,398
|
)
|
||
Proceeds from the issuance of common stock
|
1,648
|
|
|
1,697
|
|
||
Tax withholdings related to the exercise of stock appreciation rights
|
(123
|
)
|
|
(304
|
)
|
||
Repurchases of common stock
|
(146,638
|
)
|
|
(5,657
|
)
|
||
Other, net
|
(113
|
)
|
|
784
|
|
||
Net cash used in financing activities
|
(538,566
|
)
|
|
(25,240
|
)
|
||
Effect of exchange rate changes on cash
|
456
|
|
|
(2,179
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
(148,808
|
)
|
|
355,312
|
|
||
Cash and cash equivalents
, beginning of period
|
896,527
|
|
|
546,937
|
|
||
Cash and cash equivalents
, end of period
|
$
|
747,719
|
|
|
$
|
902,249
|
|
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
||||
Accrued purchases of property and equipment
|
$
|
30,068
|
|
|
$
|
9,075
|
|
1.
|
Nature of Operations and Basis of Presentation:
|
2.
|
Significant Accounting Policies:
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||
|
July 13, 2019
|
|
July 14, 2018
|
|
July 13, 2019
|
|
July 14, 2018
|
||||
Percentage of Net sales, by product group:
|
|
|
|
|
|
|
|
||||
Parts and batteries
|
67
|
%
|
|
66
|
%
|
|
66
|
%
|
|
65
|
%
|
Accessories and chemicals
|
21
|
|
|
20
|
|
|
21
|
|
|
20
|
|
Engine maintenance
|
11
|
|
|
13
|
|
|
12
|
|
|
14
|
|
Other
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
3.
|
Inventories
|
(in thousands)
|
July 13, 2019
|
|
December 29, 2018
|
||||
Inventories at first in, first out (“FIFO”)
|
$
|
4,174,944
|
|
|
$
|
4,119,617
|
|
Adjustments to state inventories at LIFO
|
199,989
|
|
|
242,930
|
|
||
Inventories at LIFO
|
$
|
4,374,933
|
|
|
$
|
4,362,547
|
|
4.
|
Exit Activities
|
5.
|
Intangible Assets
|
6.
|
Receivables, net
|
(in thousands)
|
July 13, 2019
|
|
December 29, 2018
|
||||
Trade
|
$
|
497,338
|
|
|
$
|
397,909
|
|
Vendor
|
222,377
|
|
|
228,024
|
|
||
Other
|
10,060
|
|
|
17,081
|
|
||
Total receivables
|
729,775
|
|
|
643,014
|
|
||
Less: allowance for doubtful accounts
|
(16,714
|
)
|
|
(18,042
|
)
|
||
Receivables, net
|
$
|
713,061
|
|
|
$
|
624,972
|
|
7.
|
Long-term Debt and Fair Value of Financial Instruments
|
(in thousands)
|
July 13, 2019
|
|
December 29, 2018
|
||||
Total long-term debt
|
$
|
746,951
|
|
|
$
|
1,045,930
|
|
Less: current portion of long-term debt
|
—
|
|
|
(210
|
)
|
||
Long-term debt, excluding current portion
|
$
|
746,951
|
|
|
$
|
1,045,720
|
|
|
|
|
|
||||
Fair value of long-term debt
|
$
|
793,000
|
|
|
$
|
1,074,000
|
|
8.
|
Leases
|
(in thousands)
|
July 13, 2019
|
||
Total operating lease liabilities
|
$
|
2,481,431
|
|
Less: Current portion of operating lease liabilities
|
(449,081
|
)
|
|
Noncurrent operating lease liabilities
|
$
|
2,032,350
|
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||
(in thousands)
|
July 13, 2019
|
|
July 13, 2019
|
||||
Operating lease cost
|
$
|
124,765
|
|
|
$
|
284,811
|
|
Variable lease cost
|
32,856
|
|
|
82,546
|
|
||
Total lease cost
|
$
|
157,621
|
|
|
$
|
367,357
|
|
(in thousands)
|
July 13, 2019
|
||
Remainder of 2019
|
$
|
230,520
|
|
2020
|
560,102
|
|
|
2021
|
458,167
|
|
|
2022
|
362,804
|
|
|
2023
|
317,640
|
|
|
Thereafter
|
968,831
|
|
|
Total lease payments
|
$
|
2,898,064
|
|
Less: Imputed interest
|
(416,633
|
)
|
|
Total operating lease liabilities
|
$
|
2,481,431
|
|
|
Twenty-Eight Weeks Ended
|
||
(in thousands)
|
July 13, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
278,323
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
Operating leases
|
$
|
201,856
|
|
|
December 29, 2018
|
||
(in thousands)
|
|
||
2019
|
$
|
520,541
|
|
2020
|
481,812
|
|
|
2021
|
416,895
|
|
|
2022
|
349,470
|
|
|
2023
|
270,116
|
|
|
Thereafter
|
837,441
|
|
|
|
$
|
2,876,275
|
|
9.
|
Warranty Liabilities
|
|
Twenty-Eight Weeks Ended
|
|
Fifty-Two Weeks Ended
|
||||
(in thousands)
|
July 13, 2019
|
|
December 29, 2018
|
||||
Warranty reserve, beginning of period
|
$
|
45,280
|
|
|
$
|
49,024
|
|
Additions to warranty reserves
|
23,248
|
|
|
43,200
|
|
||
Reserves utilized
|
(23,211
|
)
|
|
(46,944
|
)
|
||
Warranty reserve, end of period
|
$
|
45,317
|
|
|
$
|
45,280
|
|
10.
|
Share Repurchase Program
|
11.
|
Earnings per Share
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
(in thousands, except per share data)
|
July 13, 2019
|
|
July 14, 2018
|
|
July 13, 2019
|
|
July 14, 2018
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common shares
|
$
|
124,820
|
|
|
$
|
117,836
|
|
|
$
|
267,320
|
|
|
$
|
254,562
|
|
Denominator
|
|
|
|
|
|
|
|
|
|||||||
Basic weighted average common shares
|
71,738
|
|
|
74,054
|
|
|
71,767
|
|
|
74,011
|
|
||||
Dilutive impact of share-based awards
|
270
|
|
|
190
|
|
|
296
|
|
|
211
|
|
||||
Diluted weighted average common shares
|
72,008
|
|
|
74,244
|
|
|
72,063
|
|
|
74,222
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Basic earnings per common share
|
$
|
1.74
|
|
|
$
|
1.59
|
|
|
$
|
3.73
|
|
|
$
|
3.44
|
|
Diluted earnings per common share
|
$
|
1.73
|
|
|
$
|
1.59
|
|
|
$
|
3.71
|
|
|
$
|
3.43
|
|
12.
|
Share-Based Compensation
|
13.
|
Condensed Consolidating Financial Statements
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
690,002
|
|
|
$
|
57,717
|
|
|
$
|
—
|
|
|
$
|
747,719
|
|
Receivables, net
|
—
|
|
|
663,858
|
|
|
49,203
|
|
|
—
|
|
|
713,061
|
|
|||||
Inventories
|
—
|
|
|
4,189,502
|
|
|
185,431
|
|
|
—
|
|
|
4,374,933
|
|
|||||
Other current assets
|
1,403
|
|
|
119,472
|
|
|
5,883
|
|
|
—
|
|
|
126,758
|
|
|||||
Total current assets
|
1,403
|
|
|
5,662,834
|
|
|
298,234
|
|
|
—
|
|
|
5,962,471
|
|
|||||
Property and equipment, net of accumulated depreciation
|
66
|
|
|
1,372,713
|
|
|
8,609
|
|
|
—
|
|
|
1,381,388
|
|
|||||
Operating lease right-of-use assets
|
—
|
|
|
2,317,564
|
|
|
42,455
|
|
|
—
|
|
|
2,360,019
|
|
|||||
Goodwill
|
—
|
|
|
943,364
|
|
|
49,068
|
|
|
—
|
|
|
992,432
|
|
|||||
Intangible assets, net
|
—
|
|
|
481,450
|
|
|
40,519
|
|
|
—
|
|
|
521,969
|
|
|||||
Other assets, net
|
1,694
|
|
|
49,060
|
|
|
610
|
|
|
(1,697
|
)
|
|
49,667
|
|
|||||
Investment in subsidiaries
|
4,214,313
|
|
|
519,888
|
|
|
—
|
|
|
(4,734,201
|
)
|
|
—
|
|
|||||
Intercompany note receivable
|
749,283
|
|
|
—
|
|
|
—
|
|
|
(749,283
|
)
|
|
—
|
|
|||||
Due from intercompany, net
|
—
|
|
|
237,570
|
|
|
307,650
|
|
|
(545,220
|
)
|
|
—
|
|
|||||
|
$
|
4,966,759
|
|
|
$
|
11,584,443
|
|
|
$
|
747,145
|
|
|
$
|
(6,030,401
|
)
|
|
$
|
11,267,946
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
3,122,680
|
|
|
$
|
195,292
|
|
|
$
|
—
|
|
|
$
|
3,317,972
|
|
Accrued expenses
|
3,286
|
|
|
559,756
|
|
|
24,077
|
|
|
—
|
|
|
587,119
|
|
|||||
Other current liabilities
|
—
|
|
|
508,720
|
|
|
(41,406
|
)
|
|
—
|
|
|
467,314
|
|
|||||
Total current liabilities
|
3,286
|
|
|
4,191,156
|
|
|
177,963
|
|
|
—
|
|
|
4,372,405
|
|
|||||
Long-term debt
|
746,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
746,951
|
|
|||||
Noncurrent operating lease liabilities
|
—
|
|
|
1,999,384
|
|
|
32,966
|
|
|
—
|
|
|
2,032,350
|
|
|||||
Deferred income taxes
|
—
|
|
|
299,269
|
|
|
16,328
|
|
|
(1,694
|
)
|
|
313,903
|
|
|||||
Other long-term liabilities
|
—
|
|
|
131,038
|
|
|
—
|
|
|
(3
|
)
|
|
131,035
|
|
|||||
Intercompany note payable
|
—
|
|
|
749,283
|
|
|
—
|
|
|
(749,283
|
)
|
|
—
|
|
|||||
Due to intercompany, net
|
545,220
|
|
|
—
|
|
|
—
|
|
|
(545,220
|
)
|
|
—
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity
|
3,671,302
|
|
|
4,214,313
|
|
|
519,888
|
|
|
(4,734,201
|
)
|
|
3,671,302
|
|
|||||
|
$
|
4,966,759
|
|
|
$
|
11,584,443
|
|
|
$
|
747,145
|
|
|
$
|
(6,030,401
|
)
|
|
$
|
11,267,946
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
785,605
|
|
|
$
|
110,922
|
|
|
$
|
—
|
|
|
$
|
896,527
|
|
Receivables, net
|
—
|
|
|
590,269
|
|
|
34,703
|
|
|
—
|
|
|
624,972
|
|
|||||
Inventories
|
—
|
|
|
4,182,973
|
|
|
179,574
|
|
|
—
|
|
|
4,362,547
|
|
|||||
Other current assets
|
3,103
|
|
|
191,318
|
|
|
3,987
|
|
|
—
|
|
|
198,408
|
|
|||||
Total current assets
|
3,103
|
|
|
5,750,165
|
|
|
329,186
|
|
|
—
|
|
|
6,082,454
|
|
|||||
Property and equipment, net of accumulated depreciation
|
77
|
|
|
1,359,980
|
|
|
8,928
|
|
|
—
|
|
|
1,368,985
|
|
|||||
Goodwill
|
—
|
|
|
943,364
|
|
|
46,873
|
|
|
—
|
|
|
990,237
|
|
|||||
Intangible assets, net
|
—
|
|
|
510,586
|
|
|
40,007
|
|
|
—
|
|
|
550,593
|
|
|||||
Other assets, net
|
2,408
|
|
|
47,815
|
|
|
564
|
|
|
(2,408
|
)
|
|
48,379
|
|
|||||
Investment in subsidiaries
|
3,945,862
|
|
|
474,772
|
|
|
—
|
|
|
(4,420,634
|
)
|
|
—
|
|
|||||
Intercompany note receivable
|
1,048,993
|
|
|
—
|
|
|
—
|
|
|
(1,048,993
|
)
|
|
—
|
|
|||||
Due from intercompany, net
|
—
|
|
|
102,886
|
|
|
297,580
|
|
|
(400,466
|
)
|
|
—
|
|
|||||
|
$
|
5,000,443
|
|
|
$
|
9,189,568
|
|
|
$
|
723,138
|
|
|
$
|
(5,872,501
|
)
|
|
$
|
9,040,648
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
2,954,632
|
|
|
$
|
218,158
|
|
|
$
|
—
|
|
|
$
|
3,172,790
|
|
Accrued expenses
|
3,444
|
|
|
603,460
|
|
|
16,237
|
|
|
—
|
|
|
623,141
|
|
|||||
Other current liabilities
|
—
|
|
|
91,994
|
|
|
(1,975
|
)
|
|
—
|
|
|
90,019
|
|
|||||
Total current liabilities
|
3,444
|
|
|
3,650,086
|
|
|
232,420
|
|
|
—
|
|
|
3,885,950
|
|
|||||
Long-term debt
|
1,045,720
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,045,720
|
|
|||||
Deferred income taxes
|
—
|
|
|
306,127
|
|
|
14,634
|
|
|
(2,408
|
)
|
|
318,353
|
|
|||||
Other long-term liabilities
|
—
|
|
|
238,500
|
|
|
1,312
|
|
|
—
|
|
|
239,812
|
|
|||||
Intercompany note payable
|
—
|
|
|
1,048,993
|
|
|
—
|
|
|
(1,048,993
|
)
|
|
—
|
|
|||||
Due to intercompany, net
|
400,466
|
|
|
—
|
|
|
—
|
|
|
(400,466
|
)
|
|
—
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity
|
3,550,813
|
|
|
3,945,862
|
|
|
474,772
|
|
|
(4,420,634
|
)
|
|
3,550,813
|
|
|||||
|
$
|
5,000,443
|
|
|
$
|
9,189,568
|
|
|
$
|
723,138
|
|
|
$
|
(5,872,501
|
)
|
|
$
|
9,040,648
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,234,054
|
|
|
$
|
126,967
|
|
|
$
|
(28,775
|
)
|
|
$
|
2,332,246
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
1,268,783
|
|
|
82,800
|
|
|
(28,775
|
)
|
|
1,322,808
|
|
|||||
Gross profit
|
—
|
|
|
965,271
|
|
|
44,167
|
|
|
—
|
|
|
1,009,438
|
|
|||||
Selling, general and administrative expenses
|
5,852
|
|
|
817,938
|
|
|
22,678
|
|
|
(7,802
|
)
|
|
838,666
|
|
|||||
Operating (loss) income
|
(5,852
|
)
|
|
147,333
|
|
|
21,489
|
|
|
7,802
|
|
|
170,772
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(7,949
|
)
|
|
(529
|
)
|
|
(197
|
)
|
|
—
|
|
|
(8,675
|
)
|
|||||
Other income (expense), net
|
14,062
|
|
|
(3,695
|
)
|
|
1,548
|
|
|
(7,802
|
)
|
|
4,113
|
|
|||||
Total other, net
|
6,113
|
|
|
(4,224
|
)
|
|
1,351
|
|
|
(7,802
|
)
|
|
(4,562
|
)
|
|||||
Income before provision for income taxes
|
261
|
|
|
143,109
|
|
|
22,840
|
|
|
—
|
|
|
166,210
|
|
|||||
Provision for income taxes
|
422
|
|
|
35,507
|
|
|
5,461
|
|
|
—
|
|
|
41,390
|
|
|||||
(Loss) income before equity in earnings of subsidiaries
|
(161
|
)
|
|
107,602
|
|
|
17,379
|
|
|
—
|
|
|
124,820
|
|
|||||
Equity in earnings of subsidiaries
|
124,981
|
|
|
17,379
|
|
|
—
|
|
|
(142,360
|
)
|
|
—
|
|
|||||
Net income
|
$
|
124,820
|
|
|
$
|
124,981
|
|
|
$
|
17,379
|
|
|
$
|
(142,360
|
)
|
|
$
|
124,820
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,231,229
|
|
|
$
|
138,070
|
|
|
$
|
(42,647
|
)
|
|
$
|
2,326,652
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
1,263,912
|
|
|
93,828
|
|
|
(42,647
|
)
|
|
1,315,093
|
|
|||||
Gross profit
|
—
|
|
|
967,317
|
|
|
44,242
|
|
|
—
|
|
|
1,011,559
|
|
|||||
Selling, general and administrative expenses
|
4,848
|
|
|
827,733
|
|
|
23,241
|
|
|
(11,804
|
)
|
|
844,018
|
|
|||||
Operating (loss) income
|
(4,848
|
)
|
|
139,584
|
|
|
21,001
|
|
|
11,804
|
|
|
167,541
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(12,059
|
)
|
|
(796
|
)
|
|
—
|
|
|
—
|
|
|
(12,855
|
)
|
|||||
Other income (expense), net
|
16,991
|
|
|
(1,211
|
)
|
|
(1,191
|
)
|
|
(11,804
|
)
|
|
2,785
|
|
|||||
Total other, net
|
4,932
|
|
|
(2,007
|
)
|
|
(1,191
|
)
|
|
(11,804
|
)
|
|
(10,070
|
)
|
|||||
Income before provision for income taxes
|
84
|
|
|
137,577
|
|
|
19,810
|
|
|
—
|
|
|
157,471
|
|
|||||
(Benefit) provision for income taxes
|
(204
|
)
|
|
35,512
|
|
|
4,327
|
|
|
—
|
|
|
39,635
|
|
|||||
Income before equity in earnings of subsidiaries
|
288
|
|
|
102,065
|
|
|
15,483
|
|
|
—
|
|
|
117,836
|
|
|||||
Equity in earnings of subsidiaries
|
117,548
|
|
|
15,483
|
|
|
—
|
|
|
(133,031
|
)
|
|
—
|
|
|||||
Net income
|
$
|
117,836
|
|
|
$
|
117,548
|
|
|
$
|
15,483
|
|
|
$
|
(133,031
|
)
|
|
$
|
117,836
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,086,755
|
|
|
$
|
274,257
|
|
|
$
|
(76,729
|
)
|
|
$
|
5,284,283
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
2,867,323
|
|
|
179,639
|
|
|
(76,729
|
)
|
|
2,970,233
|
|
|||||
Gross profit
|
—
|
|
|
2,219,432
|
|
|
94,618
|
|
|
—
|
|
|
2,314,050
|
|
|||||
Selling, general and administrative expenses
|
17,970
|
|
|
1,895,083
|
|
|
54,087
|
|
|
(31,802
|
)
|
|
1,935,338
|
|
|||||
Operating (loss) income
|
(17,970
|
)
|
|
324,349
|
|
|
40,531
|
|
|
31,802
|
|
|
378,712
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
(21,464
|
)
|
|
(1,933
|
)
|
|
(222
|
)
|
|
—
|
|
|
(23,619
|
)
|
|||||
Other income (expense), net
|
40,274
|
|
|
(10,586
|
)
|
|
3,988
|
|
|
(31,802
|
)
|
|
1,874
|
|
|||||
Total other, net
|
18,810
|
|
|
(12,519
|
)
|
|
3,766
|
|
|
(31,802
|
)
|
|
(21,745
|
)
|
|||||
Income before provision for income taxes
|
840
|
|
|
311,830
|
|
|
44,297
|
|
|
—
|
|
|
356,967
|
|
|||||
Provision for income taxes
|
1,722
|
|
|
77,801
|
|
|
10,124
|
|
|
—
|
|
|
89,647
|
|
|||||
(Loss) income before equity in earnings of subsidiaries
|
(882
|
)
|
|
234,029
|
|
|
34,173
|
|
|
—
|
|
|
267,320
|
|
|||||
Equity in earnings of subsidiaries
|
268,202
|
|
|
34,173
|
|
|
—
|
|
|
(302,375
|
)
|
|
—
|
|
|||||
Net income
|
$
|
267,320
|
|
|
$
|
268,202
|
|
|
$
|
34,173
|
|
|
$
|
(302,375
|
)
|
|
$
|
267,320
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,007,131
|
|
|
$
|
290,190
|
|
|
$
|
(96,821
|
)
|
|
$
|
5,200,500
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
2,814,953
|
|
|
198,526
|
|
|
(96,821
|
)
|
|
2,916,658
|
|
|||||
Gross profit
|
—
|
|
|
2,192,178
|
|
|
91,664
|
|
|
—
|
|
|
2,283,842
|
|
|||||
Selling, general and administrative expenses
|
9,658
|
|
|
1,882,123
|
|
|
53,823
|
|
|
(27,543
|
)
|
|
1,918,061
|
|
|||||
Operating (loss) income
|
(9,658
|
)
|
|
310,055
|
|
|
37,841
|
|
|
27,543
|
|
|
365,781
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(28,137
|
)
|
|
(2,400
|
)
|
|
—
|
|
|
—
|
|
|
(30,537
|
)
|
|||||
Other income (expense), net
|
38,248
|
|
|
(4,204
|
)
|
|
(3,258
|
)
|
|
(27,543
|
)
|
|
3,243
|
|
|||||
Total other, net
|
10,111
|
|
|
(6,604
|
)
|
|
(3,258
|
)
|
|
(27,543
|
)
|
|
(27,294
|
)
|
|||||
Income before provision for income taxes
|
453
|
|
|
303,451
|
|
|
34,583
|
|
|
—
|
|
|
338,487
|
|
|||||
Provision for income taxes
|
1,059
|
|
|
75,964
|
|
|
6,902
|
|
|
—
|
|
|
83,925
|
|
|||||
(Loss) income before equity in earnings of subsidiaries
|
(606
|
)
|
|
227,487
|
|
|
27,681
|
|
|
—
|
|
|
254,562
|
|
|||||
Equity in earnings of subsidiaries
|
255,168
|
|
|
27,681
|
|
|
—
|
|
|
(282,849
|
)
|
|
—
|
|
|||||
Net income
|
$
|
254,562
|
|
|
$
|
255,168
|
|
|
$
|
27,681
|
|
|
$
|
(282,849
|
)
|
|
$
|
254,562
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
124,820
|
|
|
$
|
124,981
|
|
|
$
|
17,379
|
|
|
$
|
(142,360
|
)
|
|
$
|
124,820
|
|
Other comprehensive income
|
6,557
|
|
|
6,557
|
|
|
6,626
|
|
|
(13,183
|
)
|
|
6,557
|
|
|||||
Comprehensive income
|
$
|
131,377
|
|
|
$
|
131,538
|
|
|
$
|
24,005
|
|
|
$
|
(155,543
|
)
|
|
$
|
131,377
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
117,836
|
|
|
$
|
117,548
|
|
|
$
|
15,483
|
|
|
$
|
(133,031
|
)
|
|
$
|
117,836
|
|
Other comprehensive loss
|
(7,102
|
)
|
|
(7,102
|
)
|
|
(7,035
|
)
|
|
14,137
|
|
|
(7,102
|
)
|
|||||
Comprehensive income
|
$
|
110,734
|
|
|
$
|
110,446
|
|
|
$
|
8,448
|
|
|
$
|
(118,894
|
)
|
|
$
|
110,734
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
267,320
|
|
|
$
|
268,202
|
|
|
$
|
34,173
|
|
|
$
|
(302,375
|
)
|
|
$
|
267,320
|
|
Other comprehensive income
|
10,712
|
|
|
10,712
|
|
|
10,686
|
|
|
(21,398
|
)
|
|
10,712
|
|
|||||
Comprehensive income
|
$
|
278,032
|
|
|
$
|
278,914
|
|
|
$
|
44,859
|
|
|
$
|
(323,773
|
)
|
|
$
|
278,032
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
254,562
|
|
|
$
|
255,168
|
|
|
$
|
27,681
|
|
|
$
|
(282,849
|
)
|
|
$
|
254,562
|
|
Other comprehensive loss
|
(10,960
|
)
|
|
(10,960
|
)
|
|
(10,802
|
)
|
|
21,762
|
|
|
(10,960
|
)
|
|||||
Comprehensive income
|
$
|
243,602
|
|
|
$
|
244,208
|
|
|
$
|
16,879
|
|
|
$
|
(261,087
|
)
|
|
$
|
243,602
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
495,853
|
|
|
$
|
(3,692
|
)
|
|
$
|
—
|
|
|
$
|
492,161
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
—
|
|
|
(110,974
|
)
|
|
(451
|
)
|
|
—
|
|
|
(111,425
|
)
|
|||||
Proceeds from sales of property and equipment
|
—
|
|
|
8,565
|
|
|
1
|
|
|
—
|
|
|
8,566
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(102,409
|
)
|
|
(450
|
)
|
|
—
|
|
|
(102,859
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Decrease in bank overdrafts
|
—
|
|
|
(20,746
|
)
|
|
(49,519
|
)
|
|
—
|
|
|
(70,265
|
)
|
|||||
Redemption of senior unsecured notes
|
—
|
|
|
(310,047
|
)
|
|
—
|
|
|
—
|
|
|
(310,047
|
)
|
|||||
Dividends paid
|
—
|
|
|
(13,028
|
)
|
|
—
|
|
|
—
|
|
|
(13,028
|
)
|
|||||
Proceeds from the issuance of common stock
|
—
|
|
|
1,648
|
|
|
—
|
|
|
—
|
|
|
1,648
|
|
|||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
(123
|
)
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
|||||
Repurchases of common stock
|
—
|
|
|
(146,638
|
)
|
|
—
|
|
|
—
|
|
|
(146,638
|
)
|
|||||
Other, net
|
—
|
|
|
(113
|
)
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|||||
Net cash used in financing activities
|
—
|
|
|
(489,047
|
)
|
|
(49,519
|
)
|
|
—
|
|
|
(538,566
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
456
|
|
|
—
|
|
|
456
|
|
|||||
Net decrease in cash and cash equivalents
|
—
|
|
|
(95,603
|
)
|
|
(53,205
|
)
|
|
—
|
|
|
(148,808
|
)
|
|||||
Cash and cash equivalents
, beginning of period
|
—
|
|
|
785,605
|
|
|
110,922
|
|
|
—
|
|
|
896,527
|
|
|||||
Cash and cash equivalents
, end of period
|
$
|
—
|
|
|
$
|
690,002
|
|
|
$
|
57,717
|
|
|
$
|
—
|
|
|
$
|
747,719
|
|
(In thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
435,890
|
|
|
$
|
8,078
|
|
|
$
|
—
|
|
|
$
|
443,968
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
—
|
|
|
(61,337
|
)
|
|
(478
|
)
|
|
—
|
|
|
(61,815
|
)
|
|||||
Proceeds from sales of property and equipment
|
—
|
|
|
534
|
|
|
44
|
|
|
—
|
|
|
578
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(60,803
|
)
|
|
(434
|
)
|
|
—
|
|
|
(61,237
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Decrease in bank overdrafts
|
—
|
|
|
(6,760
|
)
|
|
(1,602
|
)
|
|
—
|
|
|
(8,362
|
)
|
|||||
Dividends paid
|
—
|
|
|
(13,398
|
)
|
|
—
|
|
|
—
|
|
|
(13,398
|
)
|
|||||
Proceeds from the issuance of common stock
|
—
|
|
|
1,697
|
|
|
—
|
|
|
—
|
|
|
1,697
|
|
|||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
(304
|
)
|
|
—
|
|
|
—
|
|
|
(304
|
)
|
|||||
Repurchases of common stock
|
—
|
|
|
(5,657
|
)
|
|
—
|
|
|
—
|
|
|
(5,657
|
)
|
|||||
Other, net
|
—
|
|
|
784
|
|
|
—
|
|
|
—
|
|
|
784
|
|
|||||
Net cash used in financing activities
|
—
|
|
|
(23,638
|
)
|
|
(1,602
|
)
|
|
—
|
|
|
(25,240
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(2,179
|
)
|
|
—
|
|
|
(2,179
|
)
|
|||||
Net increase in cash and cash equivalents
|
—
|
|
|
351,449
|
|
|
3,863
|
|
|
—
|
|
|
355,312
|
|
|||||
Cash and cash equivalents
, beginning of period
|
23
|
|
|
482,620
|
|
|
64,317
|
|
|
(23
|
)
|
|
546,937
|
|
|||||
Cash and cash equivalents
, end of period
|
$
|
23
|
|
|
$
|
834,069
|
|
|
$
|
68,180
|
|
|
$
|
(23
|
)
|
|
$
|
902,249
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
|
July 13, 2019
|
|
July 14, 2018
|
|
July 13, 2019
|
|
July 14, 2018
|
||||||||
Transformation expenses
|
$
|
0.20
|
|
|
$
|
0.28
|
|
|
$
|
0.35
|
|
|
$
|
0.40
|
|
GPI integration and store closure and consolidation expenses
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.03
|
|
||||
GPI amortization of acquired intangible assets
|
0.07
|
|
|
0.09
|
|
|
0.15
|
|
|
0.21
|
|
||||
Other adjustments
|
—
|
|
|
—
|
|
|
0.25
|
|
|
—
|
|
•
|
Net sales during the
second
quarter of
2019
were
$2.3 billion
,
an increase
of
0.2%
as compared to the
second
quarter of
2018
, primarily driven by growth in our Professional business.
|
•
|
Gross profit margin for the
second
quarter of
2019
was
43.3%
, a
decrease
of
20
basis points as compared to the
second
quarter of
2018
. This decrease was driven primarily by lower product margin related to lower DIY sales as a percentage of net sales, as well as planned investments in supply chain wages. These decreases were partially offset by continued improvements in utilization and management of on-hand inventory. In addition, material costs have increased due to both inflation and tariff related costs; however, these costs were offset by pricing actions.
|
•
|
We generated cash flow from operations of
$492.2 million
for the
twenty-eight
weeks ended
July 13, 2019
,
an increase
of
10.9%
as compared to the same period in
2018
, primarily due to an increase in net income and working capital efficiency.
|
•
|
Development of a demand-based assortment, leveraging purchase and search history from our common catalog, versus our existing push-down supply approach. This technology is a first step in moving from a supply-driven to a demand-driven assortment.
|
•
|
Continued movement towards optimizing our footprint by market to drive share, repurposing our in-market store and asset base and optimizing our distribution centers.
|
•
|
Progress in the development of a more efficient end-to-end supply chain to deliver our broad assortment.
|
•
|
Continued success of DIY omni-channel capabilities, including the launch of our partnership with Walmart.com.
|
•
|
Continued expansion of our TechNet program, which is a business solutions partnership program designed to help independently owned repair facilities grow their business and develop customer loyalty while maintaining their own identities and serving their local communities.
|
•
|
Launched our new Speed Perks 2.0 program to improve customer loyalty and traffic.
|
•
|
Initiated the roll out of our NextGen network throughout stores to increase the speed and reliability of the tools our Front Line Team Members use on a daily basis.
|
•
|
Pursuing a pilot program with UPS to include select stores as part of their Access Point network, which would provide customers additional locations to pick-up or drop-off UPS packages.
|
•
|
Continued focus on Worldpac branch openings in 2019 to drive Professional growth while investing in online and digital to drive DIY improvements.
|
|
Twelve Weeks Ended
|
|
$ Increase/(Decrease)
|
|
Basis Points
|
|||||||||||||||
(in millions)
|
July 13, 2019
|
|
July 14, 2018
|
|
|
|||||||||||||||
Net sales
|
$
|
2,332.2
|
|
|
100.0
|
%
|
|
$
|
2,326.7
|
|
|
100.0
|
%
|
|
$
|
5.5
|
|
|
—
|
|
Cost of sales
|
1,322.8
|
|
|
56.7
|
|
|
1,315.1
|
|
|
56.5
|
|
|
7.7
|
|
|
20
|
|
|||
Gross profit
|
1,009.4
|
|
|
43.3
|
|
|
1,011.6
|
|
|
43.5
|
|
|
(2.2
|
)
|
|
(20
|
)
|
|||
Selling, general and administrative expenses
|
838.7
|
|
|
36.0
|
|
|
844.0
|
|
|
36.3
|
|
|
(5.3
|
)
|
|
(32
|
)
|
|||
Operating income
|
170.8
|
|
|
7.3
|
|
|
167.5
|
|
|
7.2
|
|
|
3.3
|
|
|
12
|
|
|||
Interest expense
|
(8.7
|
)
|
|
(0.4
|
)
|
|
(12.9
|
)
|
|
(0.6
|
)
|
|
4.2
|
|
|
18
|
|
|||
Other income, net
|
4.1
|
|
|
0.2
|
|
|
2.8
|
|
|
0.1
|
|
|
1.3
|
|
|
6
|
|
|||
Provision for income taxes
|
41.4
|
|
|
1.8
|
|
|
39.6
|
|
|
1.7
|
|
|
1.8
|
|
|
7
|
|
|||
Net income
|
$
|
124.8
|
|
|
5.4
|
%
|
|
$
|
117.8
|
|
|
5.1
|
%
|
|
$
|
7.0
|
|
|
29
|
|
|
Twenty-Eight Weeks Ended
|
|
$ Increase/(Decrease)
|
|
Basis Points
|
|||||||||||||||
(in millions)
|
July 13, 2019
|
|
July 14, 2018
|
|
|
|||||||||||||||
Net sales
|
$
|
5,284.3
|
|
|
100.0
|
%
|
|
$
|
5,200.5
|
|
|
100.0
|
%
|
|
$
|
83.8
|
|
|
—
|
|
Cost of sales
|
2,970.2
|
|
|
56.2
|
|
|
2,916.7
|
|
|
56.1
|
|
|
53.5
|
|
|
12
|
|
|||
Gross profit
|
2,314.1
|
|
|
43.8
|
|
|
2,283.8
|
|
|
43.9
|
|
|
30.3
|
|
|
(12
|
)
|
|||
Selling, general and administrative expenses
|
1,935.3
|
|
|
36.6
|
|
|
1,918.1
|
|
|
36.9
|
|
|
17.2
|
|
|
26
|
|
|||
Operating income
|
378.7
|
|
|
7.2
|
|
|
365.8
|
|
|
7.0
|
|
|
12.9
|
|
|
13
|
|
|||
Interest expense
|
(23.6
|
)
|
|
(0.4
|
)
|
|
(30.5
|
)
|
|
(0.6
|
)
|
|
6.9
|
|
|
14
|
|
|||
Other income, net
|
1.9
|
|
|
0.0
|
|
|
3.2
|
|
|
0.1
|
|
|
(1.3
|
)
|
|
(3
|
)
|
|||
Provision for income taxes
|
89.6
|
|
|
1.7
|
|
|
83.9
|
|
|
1.6
|
|
|
5.7
|
|
|
8
|
|
|||
Net income
|
$
|
267.3
|
|
|
5.1
|
%
|
|
$
|
254.6
|
|
|
4.9
|
%
|
|
$
|
12.7
|
|
|
16
|
|
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
(in thousands, except per share data)
|
|
July 13, 2019
|
|
July 14, 2018
|
|
July 13, 2019
|
|
July 14, 2018
|
||||||||
Net income (GAAP)
|
|
$
|
124,820
|
|
|
$
|
117,836
|
|
|
$
|
267,320
|
|
|
$
|
254,562
|
|
Cost of sales adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Transformation expenses
|
|
—
|
|
|
5,327
|
|
|
281
|
|
|
5,327
|
|
||||
Other adjustment
(1)
|
|
—
|
|
|
—
|
|
|
13,010
|
|
|
—
|
|
||||
SG&A adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Transformation expenses
|
|
19,316
|
|
|
22,974
|
|
|
33,247
|
|
|
34,853
|
|
||||
GPI integration and store closure and consolidation expenses
|
|
—
|
|
|
716
|
|
|
—
|
|
|
2,938
|
|
||||
GPI amortization of acquired intangible assets
|
|
6,336
|
|
|
8,750
|
|
|
14,795
|
|
|
20,466
|
|
||||
Other income adjustment
(2)
|
|
—
|
|
|
—
|
|
|
10,756
|
|
|
—
|
|
||||
Provision for income taxes on adjustments
(3)
|
|
(6,413
|
)
|
|
(9,442
|
)
|
|
(18,022
|
)
|
|
(15,896
|
)
|
||||
Adjusted net income (Non-GAAP)
|
|
$
|
144,059
|
|
|
$
|
146,161
|
|
|
$
|
321,387
|
|
|
$
|
302,250
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share (GAAP)
|
|
$
|
1.73
|
|
|
$
|
1.59
|
|
|
$
|
3.71
|
|
|
$
|
3.43
|
|
Adjustments, net of tax
|
|
0.27
|
|
|
0.38
|
|
|
0.75
|
|
|
0.64
|
|
||||
Adjusted EPS (Non-GAAP)
|
|
$
|
2.00
|
|
|
$
|
1.97
|
|
|
$
|
4.46
|
|
|
$
|
4.07
|
|
(1)
|
During the sixteen weeks ended April 20, 2019, we made an out-of-period correction, which increased Cost of sales by
$13.0 million
, related to received not invoiced inventory.
|
(2)
|
During the sixteen weeks ended April 20, 2019, we incurred charges relating to a make-whole provision and debt issuance costs of
$10.1 million
and
$0.7 million
resulting from the early redemption of our 2020 Notes. For further information, see Note 7,
Long-term Debt and Fair Value of Financial Instruments
, included in our condensed consolidated financial statements.
|
(3)
|
The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustments.
|
|
Twenty-Eight Weeks Ended
|
||||||
(in thousands)
|
July 13, 2019
|
|
July 14, 2018
|
||||
Cash flows provided by operating activities
|
$
|
492,161
|
|
|
$
|
443,968
|
|
Cash flows used in investing activities
|
(102,859
|
)
|
|
(61,237
|
)
|
||
Cash flows used in financing activities
|
(538,566
|
)
|
|
(25,240
|
)
|
||
Effect of exchange rate changes on cash
|
456
|
|
|
(2,179
|
)
|
||
Net (decrease) increase in Cash and cash equivalents
|
$
|
(148,808
|
)
|
|
$
|
355,312
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
(in thousands)
|
||||||
April 21, 2019 to May 18, 2019
|
|
63
|
|
|
$
|
167.53
|
|
|
—
|
|
|
$
|
200,000
|
|
May 19, 2019 to June 15, 2019
|
|
9,170
|
|
|
156.65
|
|
|
—
|
|
|
200,000
|
|
||
June 16, 2019 to July 13, 2019
|
|
71,909
|
|
|
151.58
|
|
|
71,909
|
|
|
189,101
|
|
||
Total
|
|
81,142
|
|
|
$
|
152.16
|
|
|
71,909
|
|
|
$
|
189,101
|
|
(1)
|
The aggregate cost of repurchasing shares in connection with the net settlement of shares issued as a result of the vesting of restricted stock units was
$1.4 million
, or an average price of
$156.72
per share, during the
twelve
weeks ended
July 13, 2019
.
|
(2)
|
Our share repurchase program authorizing the repurchase of up to
$600.0 million
in common stock was authorized by our Board of Directors on
August 8, 2018
and publicly announced on
August 14, 2018
.
|
ITEM 6.
|
EXHIBITS
|
|
|
Incorporated by Reference
|
Filed
|
||
Exhibit No.
|
Exhibit Description
|
Form
|
Exhibit
|
Filing Date
|
Herewith
|
10-Q
|
3.1
|
8/14/2018
|
|
||
10-Q
|
3.2
|
5/22/2018
|
|
||
|
|
|
X
|
||
|
|
|
X
|
||
|
|
|
X
|
||
101.INS
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
|
X
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
X
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
X
|
101.LAB
|
Inline XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
X
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
X
|
|
|
ADVANCE AUTO PARTS, INC.
|
|
|
|
Date: August 13, 2019
|
|
/s/ Andrew E. Page
|
|
|
Andrew E. Page
Senior Vice President, Controller and Chief Accounting Officer
|
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