Advance Auto Parts Inc.

Welcome to the Advanced Auto Parts Second Quarter 2023 Conference Call. Before we begin, Elizabeth Eiselben, Senior Vice President, Communications and Investor Relations, will make a brief statement concerning forward-looking statements that will be discussed on this call.

Good morning, and thank you for joining us to discuss our Q2 2023 results. I'm joined by Jean Lee, Interim Executive Chair, Tom Greco, President and Chief Executive Officer, and Tony Iskander, Interim Chief Financial Officer. Following their prepared remarks, we will turn our attention to answering your questions. Before we begin, please be advised that remarks today will contain forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements regarding our leadership transition, initiatives, plans, projections, and future performance. Actual results could differ materially from those projected or implied by the forward-looking statement. Additional information about factors that could cause actual results to differ can be found under the captions forward-looking statements and risk factors in our most recent Form 10-K and subsequent filings made with the Commission. Now, let me turn the call over to Gene Lee.

Good morning, everyone, and thank you for joining us. I'm pleased to be able to join the call today and speak with all of you. I'll turn the call over to Tom and Tony shortly to review the second quarter results and outlook for the remainder of the year. But before I do that, I'd like to take a moment to address the announcements we made this morning regarding new leadership and a comprehensive strategic and operational review, as well as provide some of my own perspectives on the business, the work that we have ahead of us, and the actions we are taking. Following a thorough search, The board is named Shane O'Kelly as President, Chief Executive Officer, and Director of Vence Auto Parts, effective September 11th. We are pleased to have identified an individual of Shane's caliber to join Advance and have him come on board as we are undertaking the operational and strategic review of the business. Together with our financial advisor, Centerview Partners, we are committed to evaluating the full spectrum of alternatives and opportunities to increase shareholder value and ensure the long-term success of Advance. And I'm confident Shane will add valuable insight to this review. Shane is a highly accomplished, customer-centric executive with more than 30 years of operational, strategic development, integration, and complex supply chain experience. He has a proven record of success developing high-performing teams and cultures to drive results. He joined Advance from HD Supply, where he has served as CEO since 2020, following the company's acquisition by the Home Depot. Prior to HD Supply, Shane was CEO of Interline Brands, which also operated as the Home Depot Pro. We are confident that Shane brings the right skillset, discipline, and expertise to lead Advance into the future. I plan to remain in the interim executive chair role through the end of the year to work alongside Shane and the management team. I look forward to welcoming him to Raleigh in September. Until Shane's official start date, Tom will continue to serve as president and CEO. Thereafter, he will serve as an advisor to help ensure a seamless transition of leadership responsibilities. On behalf of the entire board, I thank Tom for his many contributions to advance, which notably includes the culture he has built with highly skilled and committed team members and a talented bench of leaders. We also announced today Tony Islanter as interim chief financial officer. Tony brings more than 25 years of finance and accounting expertise to the role and has served as the company's senior vice president, finance, and treasurer since 2020. We are beginning a search to identify the company's next permanent CFO and are pleased to have someone with Tony's experience to step into the role on an interim basis. We are also pleased to have Tony on the call today to review Q2 results along with Tom. Since expanding my role to serve as interim executive chair and partnering more closely with the leadership team, I have taken a deeper dive into the business and our strategy. As a board, we recognize that there is significant work to be done. We are conducting the operational and strategic review to develop a long-term strategy to deliver best-in-class shareholder value. We are executing a number of operational improvements, including inventory optimization initiatives, improving asset productivity across the enterprise, investment in our frontline organization to reduce turnover, and discipline cost controls, which we expect to benefit the cost structure and working capital while strengthening advance for the long term. However, we know there's more work to be done, and the team is focused on building on these actions and looking for ways to drive even stronger performance and enhance value. The company is providing updated four-year 2023 guidance today. which considers recent performance and balance of the year expectations. I would note that after Shane joins next month, I expect to work closely with him on the business plan to ensure we capitalize on both advances near-term and long-term potential. With that, I'll now turn the call over to Tom.