Advance Auto Parts, Inc., a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourself customers, announced its financial results for the fourth quarter and full year ended December 28, 2024.

“During 2024, we initiated transformative actions to reposition Advance for long-term success and value creation,” said Shane O’Kelly, president and chief executive officer.

“We strengthened our focus on the blended-box by divesting non-core assets, closing non-strategic stores and right-sizing our organization. Our supply chain and merchandising teams are accelerating efforts to provide faster access to thousands of parts across our network. From a team perspective, we deployed additional resources to support our frontline team members and our customers. Additionally, we augmented our leadership team with talented executives that bring knowledge of core retail fundamentals.”

“We ended 2024 with a healthy balance sheet and strong liquidity to navigate our turnaround. The team is acutely focused on execution and driving stronger accountability. We remain committed to delivering an improved operating performance in 2025 and making progress toward our FY27 goal of achieving an adjusted operating margin of approximately 7%.”

As of December 28, 2024, Advance operated 4,788 stores primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 934 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands.

Fourth Quarter 2024 Results
(All figures in USD)
Fourth quarter 2024 net sales totaled $2.0 billion, a decrease of 0.9% compared with the prior year. Comparable store sales for the fourth quarter 2024 decreased 1.0%. Comparable store sales does not include store closing sales at more than 500 corporate locations which will be closing under our restructuring plan.

The company’s fourth quarter 2024 gross profit was $347.1 million or 17.4% of net sales. Adjusted fourth quarter 2024 gross profit was $778.6 million or 39.0% of net sales, compared with $819.6 million or 40.7% of net sales in the prior year quarter. The deleverage was primarily driven by atypical items and headwinds in the period that are not included in non-GAAP adjustments. These include end of year inventory adjustments associated with an annual review of vendor balances and inventory associated with DCs closed during the year and margin headwind associated with liquidation sales at closing store and DC locations. We estimate these items collectively impacted fourth quarter 2024 gross margin by approximately 280 basis points.

The company’s fourth quarter 2024 SG&A was $1.2 billion, or 58.5% of net sales. Adjusted fourth quarter 2024 SG&A was $878.1 million or 44.0% of net sales compared with $850.7 million or 42.2% of net sales in the prior year quarter. This was primarily driven by higher labor-related expenses compared with the prior year.

The company’s fourth quarter operating loss was $820.0 million, or (41.1)% of net sales. Adjusted fourth quarter 2024 operating loss was $99.4 million or (5.0)% of net sales, compared with a loss of $31.0 million or (1.5)% of net sales in the prior year quarter. Our fourth quarter 2024 adjusted operating margin was negatively impacted by 280 basis points of atypical items and headwinds in the period that are not included in non-GAAP adjustments.

The company’s effective tax rate in the fourth quarter of 2024 was 26.2%. The company’s diluted loss per share was $10.16. Adjusted fourth quarter diluted loss per share was $1.18 compared with adjusted diluted loss per share of $0.45 in the prior year quarter. Atypical items and headwinds in the period that are not included in non-GAAP adjustments, accounted for approximately $0.68 of loss per share in the fourth quarter.

Full Year 2024 Results

Full year 2024, net sales totaled $9.1 billion, a decrease of 1.2% from 2023. Comparable store sales for full year 2024 decreased 0.7%. Comparable store sales does not include store closing sales at more than 500 corporate locations which will be closing under our restructuring plan.

The company’s full year 2024 gross profit was $3.4 billion, or 37.5% of net sales. Adjusted full year 2024 gross profit was $3.8 billion or 42.2% of net sales, compared with $3.9 billion or 41.9% of net sales in the prior year. The gross margin improvement was primarily driven by lapping the one-time impact in the change for inventory reserves in the prior year offset by strategic pricing investments, atypical items and headwinds in the period that are not included in non-GAAP adjustments. These atypical items included end of year inventory adjustments, liquidation sales at closing store and DC locations, lost revenue related to hurricanes and systems outages. We estimate these items collectively impacted full year 2024 gross margin by approximately 90 basis points.

The company’s full year 2024 SG&A was $4.1 billion, or 45.3% of net sales. Adjusted full year 2024 SG&A was $3.8 billion, or 41.8% of net sales, compared with $3.8 billion, or 41.3% of net sales, in the prior year. The deleverage was primarily driven by the lower sales volume compared with the prior year. Full year 2024 SG&A also includes atypical items that are not included in non-GAAP adjustments. These include a gain on sale of asset offset by nonrecurring team member assistance expenses and other charges. In aggregate, we estimate these items drove 30 basis points of favorability for the full year.

The company’s full year 2024 operating loss was $713.3 million, or 7.8% of net sales. Adjusted full year 2024 operating income was $35.2 million or 0.4% of net sales, compared with adjusted operating income of $56.3 million or 0.6% of net sales in the prior year. Our full year 2024 adjusted operating margin was negatively impacted by 60 basis points of atypical items and headwinds in the period that are not included in non-GAAP adjustments.

The company’s effective tax rate for full year 2024 was 23.6%. The company’s full year 2024 diluted loss per share was $9.80. Adjusted full year 2024 diluted loss per share was $0.29 compared with adjusted diluted loss per share of $0.28 in the prior year quarter. Atypical items and headwinds in the period that are not included in non-GAAP adjustments accounted for approximately $0.64 of loss per share for the full year.

Net cash provided by operating activities was $140.5 million for the full year 2024 versus $141.8 million for the prior year. The decrease was primarily driven by lower net income and deferred income taxes offset by higher working capital. Free cash flow for the full year 2024 was an outflow of $40.3 million, compared with an outflow of $83.9 million in the prior year.

Strategic Priorities and Financial Objectives (FY25 through FY27)

The company is executing a strategic plan to improve business performance with a focus on core retail improvements. This plan is anchored on three pillars outlined below to put the company on the path to deliver consistent profitable growth.

• Merchandising excellence
  • Strategic sourcing to improve first costs and bring parts to market faster.
  • Assortment management to enhance availability of parts.
  • Pricing and promotions management to improve gross margin.
• Supply chain
  • Consolidation of distribution centers to operate 12 large facilities by end-2026.
  • Opening of 60 market hub locations by mid-2027.
  • Optimization of transportation routes and freight to lower costs and improve productivity.
• Store operations
  • Standardization of store operating model.
  • Improving labor productivity.
  • Accelerate pace of new store openings.

Full Year 2025 Guidance (53 weeks)

		As of February 26, 2025
($ in millions, except per share data)		Low		High
Net sales from continuing operations(1)		$8,400		$8,600
Comparable store sales (52 weeks)(2)		0.5%		1.5%
New store growth		30 new stores
Adjusted operating income margin from continuing operations(4)		2.00%		3.00%
Adjusted diluted EPS from continuing operations(3,4)		$1.50		$2.50
Capital expenditures		Approx. $300
Free cash flow(4)		$(85)		$(25)

Investor Conference Call

The company detailed its results for the fourth quarter and full year 2024 via a webcast scheduled to begin at 8 a.m. Eastern Time on Wednesday, February 26, 2025. The webcast will be accessible via the Investor Relations page of the company’s website (ir.AdvanceAutoParts.com).

A replay of the conference call will be available on the company’s Investor Relations website for one year.