Advance Auto Parts Inc.

Hello everyone and welcome to the Q3 2024 Advanced Auto Parts Earnings Conference Call. My name is Charlie and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypads. I'd now like to hand the call over to our host, Lavesh Hemnani, Vice President of Investor Relations, to begin. Lavesh, please go ahead.

Good morning and thank you for participating in today's call. I'm joined by Shane O'Kelly, President and Chief Executive Officer, and Ryan Grimsland, Executive Vice President and Chief Financial Officer. Before we begin, please be advised that management's 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 a strategic and operational review, initiatives, plans, projections, and expectations for the future. Actual results could differ materially from those projected or implied by the forward-looking statements. Additional information about forward-looking statements can be found under forward-looking statements in our earnings release and risk factors in our most recent form 10-K and subsequent filings made with the SEC. During today's call, we will be referencing slides which are available to view via webcast. A copy of the slides have also been posted to our investor relations website. In addition, we have also filed historical financials for the advanced remain code that can be accessed on our website. We will begin today's discussion with an overview of our third quarter 2024 results After that, Shane will provide an update on our strategic path forward. Then, Ryan will discuss our financial objectives for the next three years. Following management's prepared remarks, we will open the line for questions. Now, let me turn the call over to Shane O'Kelly. Shane?

Thank you, LaVash, and good morning, everyone. This morning, Advance took a big step forward on its journey to operational excellence and value creation. Our entire management team is confident, focused, and excited. Today we will discuss Q3 results, our near-term outlook, and our strategic path forward through 2027. As you'll note from our earnings release this morning, we have provided you with a lot of information. With the successful completion of the WorldPAC transaction, we have outlined the financial position of Advance Auto Parts Remain Co. so that you have a clearer and fuller picture of where we are, where we are heading, and how we will measure our progress along the way. I feel that what's been done so far is working. It is very satisfying for me to see that with the team effort involved, we now have line of sight to achieve our 2027 outlook, which I'm delighted to share with you today. We are laying out a plan to deliver anticipated adjusted operating margin of approximately 7% by year end 2027. My confidence in achieving these goals stems from approximately 500 basis points of expected improvement that will be driven primarily by factors within our management team's control, including merchandising excellence, internal supply chain transformation, and store efficiency. Before we get into those details, I would like to express my gratitude to the more than 65,000 hardworking team members at Advance whose efforts during the recent hurricanes has been exceptional. We are thankful to our many associates who partnered with local communities to bring relief to those impacted, with efforts ranging from helping reopening our stores to leading donation drives. This quarter, results came in below our expectations as the sales softness that began in early Q3 persisted throughout the quarter. Macro headwinds and economic uncertainty continued to weigh on the consumer spending, while our results were also impacted by other events such as hurricanes and the CrowdStrike outage. We are pleased to have made progress on our strategic actions, including the completion of the sale of WorldPAC and a comprehensive productivity review of our assets. This review has identified opportunities to improve our adjusted operating income margin over the next three years through a broad range of actions, including a realignment of our stores and DC portfolio. Over the past year, I have spent a considerable amount of time at our stores and in our distribution centers meeting with our team members, vendors, and customers. Throughout these conversations, one common thread that emerged is Advance's rich legacy and the important role we play in the industry and in the lives of our customers. With that foundation, today we are excited to share our strategic and financial plan for the next three years. But first, let me pass it on to Ryan to discuss our Q3 results. Ryan?