Advance Auto Components Experiences Third Quarter 2021 Outcomes


RALEIGH, N.C.–(BUSINESS WIRE)–Advance Auto Components, Inc. (NYSE: AAP), a number one automotive aftermarket components supplier in North America, that serves each skilled installer and do-it-yourself prospects, introduced its monetary outcomes for the third quarter ended October 9, 2021.

“In Q3, we delivered one other quarter of improved top-line progress and margin enlargement and returned vital money to our shareholders in step with the technique we outlined in April,” mentioned Tom Greco, president and chief govt officer. “Following a number of years of investments in each our group in addition to our diversified bodily and digital asset base, we proceed to distinguish Advance within the market. Our group members and unbiased companions as soon as once more tailored to a dynamic panorama and executed our plan with excellence. Third quarter comparable gross sales grew 3.1% on high of double-digit comparable retailer gross sales within the third quarter of 2020. Importantly, we delivered a two-year stack of 13.3% within the quarter instantly in step with our Q2 2021 two-year stack comp progress of 13.3%. Our skilled enterprise as soon as once more led our gross sales enchancment in addition to the continuing restoration in key city markets the place miles pushed was most impacted in 2020. When it comes to our DIY omnichannel enterprise, we have been happy to finish the quarter barely constructive after lapping our hardest quarterly comparability of excessive double-digit progress from the prior yr.

“A number of years of deal with our stability sheet resulted in Free money movement enchancment of 19% to $734.0 million in contrast with $616.6 million year-to-date in 2020. Free money movement was up 36% when in comparison with 2019. In consequence, and in step with our dedication of returning extra money to our shareholders, we returned $291.2 million in Q3 and $952.6 million via the primary three quarters of 2021 via a mix of share repurchases and our quarterly money dividend. We’re inspired by the constructive gross sales tendencies through the first 4 weeks of our fourth quarter with our two-year stack remaining in step with Q3. We look ahead to ending 2021 with momentum and stay assured in our skill to drive whole shareholder return within the coming years.”

Q3 2021 Highlights (1)

  • Web gross sales elevated 3.1% to $2.6 billion
  • Comparable retailer gross sales (2) elevated 3.1%; On a two-year stack, Comparable retailer gross sales elevated 13.3%
  • Working revenue decreased 10.8% to $229.2 million; Adjusted working revenue (3) elevated 6.9% to $273.8 million
  • Working revenue margin decreased by 136 foundation factors to eight.7%; Adjusted working revenue margin (3) expanded 37 foundation factors to 10.4%
  • Diluted EPS of $2.68 elevated 25.8% in contrast with the third quarter of 2020 and elevated 53.1% in contrast with the third quarter of 2019; Adjusted Diluted EPS (3) elevated 21.6% to $3.21 in contrast with the third quarter of 2020 and elevated 30.5% in contrast with the third quarter of 2019
  • Yr thus far Working money movement elevated to $924.9 million; Free money movement (3) elevated to $734.0 million
  • Returned $291.2 million to shareholders via a mix of share repurchases and quarterly money dividends

_______________________________

(1)

All comparisons are based mostly on the identical time interval within the prior yr.

(2)

Comparable retailer gross sales exclude gross sales to independently owned Carquest places.

(3)

For a greater understanding of the corporate’s adjusted outcomes, confer with the reconciliation of non-GAAP changes within the accompanying monetary tables included herein.

Third Quarter 2021 Monetary Outcomes

Web gross sales for the third quarter of 2021 have been $2.6 billion, a 3.1% enhance versus the third quarter of the prior yr. Comparable retailer gross sales for the third quarter of 2021 elevated 3.1%. The rise was led by continued restoration within the firm’s skilled enterprise.

Adjusted gross revenue elevated 8.9% to $1.2 billion. Adjusted gross revenue margin was 46.2% of Web gross sales within the third quarter of 2021, a 246 foundation level enhance from the third quarter of 2020. This was pushed by enhancements in class administration, together with strategic pricing, strategic sourcing, and owned model enlargement in addition to favorable product combine. These enhancements have been partially offset by inflationary prices and unfavorable channel combine. The corporate’s GAAP Gross revenue margin elevated 72 foundation factors to 45.1% from 44.4% within the third quarter of 2020.

Adjusted SG&A elevated 9.5% to $938.2 million. Adjusted SG&A was 35.8% of Web gross sales within the third quarter of 2021, which deleveraged 209 foundation factors in contrast with the third quarter of 2020. This was primarily pushed by inflationary headwinds in retailer labor in addition to greater incentive compensation. The corporate additionally incurred begin up prices for brand new retailer openings and better supply related to the restoration of the skilled enterprise. These prices have been partially offset by a yr over yr lower in COVID-19 associated bills. The corporate’s GAAP SG&A was 36.4% of Web gross sales within the third quarter of 2021 in contrast with 34.3% within the third quarter of 2020.

The corporate’s Adjusted working revenue was $273.8 million within the third quarter of 2021, a rise of 6.9% versus the third quarter of the prior yr. Adjusted working revenue margin elevated 37 foundation factors to 10.4% of Web gross sales for the third quarter in contrast with the third quarter of the prior yr. On a GAAP foundation, the corporate’s Working revenue was $229.2 million, or 8.7% of Web gross sales, in contrast with 10.1% within the third quarter of 2020.

The corporate’s efficient tax price within the third quarter of 2021 was 23.7%, in contrast with 25.3% within the third quarter of 2020. The corporate’s Adjusted Diluted EPS was $3.21 for the third quarter of 2021, a rise of 21.6% in contrast with the third quarter of the prior yr. On a GAAP foundation, the corporate’s Diluted EPS of $2.68 elevated 25.8% in contrast with the third quarter of 2020.

Yr thus far Working money movement was $924.9 million via the third quarter of 2021 versus $809.2 million in the identical interval of the prior yr, a rise of 14.3%. The rise was primarily pushed by an enchancment in internet gross sales and better money generated from operations, in addition to different working capital enhancements. Free money movement via the third quarter of 2021 elevated to $734.0 million from $616.6 million in the identical interval of the prior yr.

Capital Allocation

Throughout the third quarter of 2021, the corporate repurchased 1.1 million shares of its frequent inventory at an mixture price of $228.3 million, or a mean value of $205.65 per share, in reference to its share repurchase program. On the finish of the third quarter of 2021, the corporate had $640.5 million remaining beneath the share repurchase program.

On November 9, 2021 the corporate declared an everyday money dividend of $1.00 per share to be paid on January 3, 2022 to all frequent stockholders of file as of December 17, 2021.

On November 9, 2021 the corporate closed the refinancing of a brand new five-year revolving credit score facility. As well as, the corporate elevated the general facility dimension to $1.2 billion. The earlier facility was set to mature in January of 2023.

Up to date Full Yr 2021 Steerage

“We’re happy with the primary three quarters of the yr and the continued momentum as we started the fourth quarter,” mentioned Jeff Shepherd, govt vp and chief monetary officer. “In consequence, we’re growing our full-year 2021 gross sales and revenue steering to replicate the constructive outcomes year-to-date and our expectations for the stability of the yr. This steering incorporates each continued top-line energy in addition to greater than deliberate inflation headwinds. Moreover, we’re lowering our steering for brand new retailer openings and capital expenditures for the yr. The development atmosphere in California stays difficult primarily associated to the continuing pandemic. We stay dedicated to the profitable conversion of our 109 California places and are assured as soon as accomplished shall be extremely accretive to our progress trajectory.”

 

Prior Outlook

 

Up to date Outlook

 

As of August 24, 2021

 

As of November 15, 2021

 

Full Yr 2021

 

Full Yr 2021

($ in hundreds of thousands)

Low

 

Excessive

 

Low

 

Excessive

Web gross sales

$10,600

 

$10,800

 

$10,900

 

$10,950

Comparable retailer gross sales

6.0%

 

8.0%

 

9.5%

 

10.0%

Adjusted working revenue margin (1)

9.2%

 

9.4%

 

9.4%

 

9.5%

Revenue tax price

24%

 

26%

 

24%

 

26%

Capital expenditures

$300

 

$350

 

Minimal $275

Free money movement (1)

Minimal $700

 

Minimal $725

Share Repurchases

$700

 

$900

 

$800

 

$900

New retailer openings

80

 

120

 

Minimal 30

(1)

For a greater understanding of the corporate’s adjusted outcomes, confer with the reconciliation of non-GAAP changes within the accompanying monetary tables included herein. Due to the forward-looking nature of the 2021 non-GAAP monetary measures, particular quantification of the quantities that may be required to reconcile these non-GAAP monetary measures to their most instantly comparable GAAP monetary measures aren’t accessible at the moment.

Investor Convention Name

The corporate will host a webcast to debate its outcomes for the third quarter of 2021 scheduled to start at 8 a.m. Jap Time on Tuesday, November 16, 2021. The webcast shall be accessible through the Investor Relations web page of the corporate’s web site (ir.AdvanceAutoParts.com).

To hitch by cellphone, please pre-register on-line for dial-in and passcode data. Upon registering, individuals will obtain a affirmation with name particulars and a registrant ID. Whereas registration is open via the dwell name, the corporate suggests registering a day prematurely or at minimal 10 minutes earlier than the beginning of the decision. A replay of the convention name shall be accessible on the Advance web site for one yr.

About Advance Auto Components

Advance Auto Components, Inc. is a number one automotive aftermarket components supplier that serves each skilled installer and do-it-yourself prospects. As of October 9, 2021, Advance operated 4,727 shops and 234 Worldpac branches in america, Canada, Puerto Rico and the U.S. Virgin Islands. The corporate additionally serves 1,325 independently owned Carquest branded shops throughout these places along with Mexico and numerous Caribbean islands. Extra details about Advance, together with employment alternatives, buyer companies, and on-line looking for components, equipment and different choices will be discovered at www.AdvanceAutoParts.com.

Ahead-Trying Statements

Sure statements herein are “forward-looking statements” throughout the which means of the Personal Securities Litigation Reform Act of 1995. Ahead-looking statements are often identifiable by phrases akin to “anticipate,” “imagine,” “may,” “estimate,” “count on,” “forecast,” “steering,” “intend,” “seemingly,” “might,” “plan,” “place,” “attainable,” “potential,” “possible,” “mission,” “ought to,” “technique,” “will,” or related language. All statements apart from statements of historic reality are forward-looking statements, together with, however not restricted to, statements concerning the firm’s strategic initiatives, operational plans and targets, expectations for financial restoration and future enterprise and monetary efficiency, in addition to statements relating to underlying assumptions associated thereto. Ahead-looking statements replicate the corporate’s views based mostly on historic outcomes, present data and assumptions associated to future developments. Besides as could also be required by legislation, the corporate undertakes no obligation to replace any forward-looking statements made herein. Ahead-looking statements are topic to quite a few dangers and uncertainties that might trigger precise outcomes to vary materially from these projected or implied by the forward-looking statements. They embody, amongst others, elements associated to the timing and implementation of strategic initiatives, together with with respect to labor shortages or disruptions and the impression on our skill to finish retailer openings, the extremely aggressive nature of the corporate’s business, demand for the corporate’s services and products, complexities in its stock and provide chain, challenges with remodeling and rising its enterprise and elements associated to the present world pandemic. Please confer with “Merchandise 1A. Threat Elements.” of the corporate’s most up-to-date Annual Report on Type 10-Ok, as up to date by its Quarterly Report on Type 10-Q and different filings made by the corporate with the Securities and Trade Fee, for an outline of those and different dangers and uncertainties that might trigger precise outcomes to vary materially from these projected or implied by the forward-looking statements.

Advance Auto Components, Inc. and Subsidiaries

Condensed Consolidated Stability Sheets

(In 1000’s) (unaudited)

 

 

October 9, 2021(1)

 

January 2, 2021(2)

Belongings

Present belongings:

 

 

 

Money and money equivalents

$

604,645

 

 

$

834,992

 

Receivables, internet

931,758

 

 

749,999

 

Inventories

4,450,452

 

 

4,538,199

 

Different present belongings

174,406

 

 

146,811

 

Complete present belongings

6,161,261

 

 

6,270,001

 

Property and gear, internet

1,483,246

 

 

1,462,602

 

Working lease right-of-use belongings

2,514,375

 

 

2,379,987

 

Goodwill

994,562

 

 

993,590

 

Intangible belongings, internet

658,545

 

 

681,127

 

Different belongings

52,182

 

 

52,329

 

 

$

11,864,171

 

 

$

11,839,636

 

Liabilities and Stockholders’ Fairness

Present liabilities:

 

 

 

Accounts payable

$

3,750,835

 

 

$

3,640,639

 

Accrued bills

731,786

 

 

606,804

 

Different present liabilities

472,608

 

 

496,472

 

Complete present liabilities

4,955,229

 

 

4,743,915

 

Lengthy-term debt

1,034,002

 

 

1,032,984

 

Noncurrent working lease liabilities

2,154,364

 

 

2,014,499

 

Deferred revenue taxes

375,069

 

 

342,445

 

Different long-term liabilities

148,972

 

 

146,281

 

Complete stockholders’ fairness

3,196,535

 

 

3,559,512

 

 

$

11,864,171

 

 

$

11,839,636

 

(1)

This preliminary condensed consolidated stability sheet has been ready on a foundation in line with the corporate’s beforehand ready consolidated stability sheets filed with the Securities and Trade Fee (“SEC”), however doesn’t embody the footnotes required by accounting ideas typically accepted in america of America (“GAAP”).

(2)

The stability sheet at January 2, 2021 has been derived from the audited consolidated monetary statements at that date, however doesn’t embody the footnotes required by GAAP.

Advance Auto Components, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In 1000’s, besides per share knowledge) (unaudited)

 

 

Twelve Weeks Ended

 

Forty Weeks Ended

 

October 9, 2021(1)

 

October 3, 2020(1)

 

October 9, 2021(1)

 

October 3, 2020(1)

Web gross sales

$

2,621,229

 

 

$

2,541,928

 

 

$

8,601,014

 

 

$

7,741,190

 

Value of gross sales, together with buying and warehousing prices

1,438,775

 

 

1,413,457

 

 

4,744,383

 

 

4,343,272

 

Gross revenue

1,182,454

 

 

1,128,471

 

 

3,856,631

 

 

3,397,918

 

Promoting, basic and administrative bills

953,256

 

 

871,660

 

 

3,130,376

 

 

2,799,837

 

Working revenue

229,198

 

 

256,811

 

 

726,255

 

 

598,081

 

Different, internet:

 

 

 

 

 

 

 

Curiosity expense

(8,587)

 

 

(11,925)

 

 

(28,085)

 

 

(37,590)

 

Loss on early redemptions of senior unsecured notes

 

 

(48,022)

 

 

 

 

(48,022)

 

Different revenue (expense), internet

1,810

 

 

674

 

 

7,790

 

 

(2,198)

 

Complete different, internet

(6,777)

 

 

(59,273)

 

 

(20,295)

 

 

(87,810)

 

Revenue earlier than provision for revenue taxes

222,421

 

 

197,538

 

 

705,960

 

 

510,271

 

Provision for revenue taxes

52,608

 

 

50,062

 

 

171,521

 

 

129,247

 

Web revenue

$

169,813

 

 

$

147,476

 

 

$

534,439

 

 

$

381,024

 

 

 

 

 

 

 

 

 

Fundamental earnings per frequent share

$

2.70

 

 

$

2.14

 

 

$

8.28

 

 

$

5.51

 

Weighted-average frequent shares excellent

62,854

 

 

68,965

 

 

64,555

 

 

69,097

 

 

 

 

 

 

 

 

 

Diluted earnings per frequent share

$

2.68

 

 

$

2.13

 

 

$

8.22

 

 

$

5.50

 

Weighted-average frequent shares excellent

63,348

 

 

69,267

 

 

65,008

 

 

69,325

 

(1)

These preliminary condensed consolidated statements of operations have been ready on a foundation in line with the corporate’s beforehand ready consolidated statements of operations filed with the SEC, however don’t embody the footnotes required by GAAP.

Advance Auto Components, Inc. and Subsidiaries

Condensed Consolidated Statements of Money Flows

(In 1000’s) (unaudited)

 

 

 

 

 

Forty Weeks Ended

 

October 9, 2021(1)

 

October 3, 2020(1)

Money flows from working actions:

 

 

 

Web revenue

$

534,439

 

 

 

$

381,024

 

 

Changes to reconcile internet revenue to internet money supplied by working actions:

 

 

 

Depreciation and amortization

 

194,737

 

 

 

 

192,911

 

 

Share-based compensation

 

49,631

 

 

 

 

34,927

 

 

Loss on early redemption of senior unsecured notes

 

 

 

 

 

48,022

 

 

Provision for deferred revenue taxes

 

32,425

 

 

 

 

8,975

 

 

Different, internet

 

8,958

 

 

 

 

2,794

 

 

Web change in:

 

 

 

Receivables, internet

 

(180,605

)

 

 

 

(154,888

)

 

Inventories

 

90,993

 

 

 

 

62,181

 

 

Accounts payable

 

108,393

 

 

 

 

106,831

 

 

Accrued bills

 

137,395

 

 

 

 

111,136

 

 

Different belongings and liabilities, internet

 

(51,430

)

 

 

 

15,305

 

 

Web money supplied by working actions

 

924,936

 

 

 

 

809,218

 

 

Money flows from investing actions:

 

 

 

Purchases of property and gear

 

(190,983

)

 

 

 

(192,632

)

 

Buy of an indefinite-lived intangible asset

 

 

 

 

 

(230

)

 

Proceeds from gross sales of property and gear

 

2,102

 

 

 

 

914

 

 

Web money utilized in investing actions

 

(188,881

)

 

 

 

(191,948

)

 

Money flows from financing actions:

 

 

 

Proceeds from borrowing on revolving credit score facility

 

 

 

 

 

500,000

 

 

Fee on revolving credit score facility

 

 

 

 

 

(500,000

)

 

Proceeds from issuances of senior unsecured notes, internet

 

 

 

 

 

847,092

 

 

Early redemptions of senior unsecured notes, internet

 

 

 

 

 

(602,568

)

 

Dividends paid

 

(160,925

)

 

 

 

(56,210

)

 

Proceeds from the issuance of frequent inventory

 

1,737

 

 

 

 

2,211

 

 

Repurchases of frequent inventory

 

(809,504

)

 

 

 

(148,330

)

 

Different, internet

 

(46

)

 

 

 

(8,735

)

 

Web money (utilized in) supplied by financing actions

 

(968,738

)

 

 

 

33,460

 

 

Impact of trade price adjustments on money

 

2,336

 

 

 

 

(1,190

)

 

 

 

 

 

Web (lower) enhance in money and money equivalents

 

(230,347

)

 

 

 

649,540

 

 

Money and money equivalents, starting of interval

 

834,992

 

 

 

 

418,665

 

 

Money and money equivalents, finish of interval

$

604,645

 

 

 

$

1,068,205

 

 

(1)

These preliminary condensed consolidated statements of money flows have been ready on a constant foundation with the corporate’s beforehand ready statements of money flows filed with the SEC, however don’t embody the footnotes required by GAAP.

Reconciliation of Non-GAAP Monetary Measures

The corporate’s monetary outcomes embody sure monetary measures not derived in accordance with accounting ideas typically accepted in america of America (“GAAP”). Non-GAAP monetary measures shouldn’t be used as an alternative choice to GAAP monetary measures, or thought-about in isolation, for the aim of analyzing the corporate’s working efficiency, monetary place or money flows. The corporate has introduced these non-GAAP monetary measures because it believes that the presentation of its monetary outcomes that exclude (1) LIFO impacts; (2) transformation bills beneath the corporate’s strategic marketing strategy; (3) non-cash amortization associated to the acquired Normal Components Worldwide, Inc. (“GPI”) intangible belongings; and (4) different non-recurring changes is beneficial and indicative of the corporate’s base operations as a result of the bills fluctuate from interval to interval by way of dimension, nature and significance and/or relate to retailer closure and consolidation exercise in extra of historic ranges. These measures help in evaluating the corporate’s present working outcomes with previous intervals and with the operational efficiency of different firms in its business. The disclosure of those measures permits traders to guage the corporate’s efficiency utilizing the identical measures administration makes use of in growing inner budgets and forecasts and in evaluating administration’s compensation. Included beneath is an outline of the bills that the corporate has decided aren’t regular, recurring money working bills essential to function its enterprise and the rationale for why offering these measures is beneficial to traders as a complement to the GAAP measures.

LIFO impacts — Starting within the first quarter of 2021, to help in evaluating the corporate’s present working outcomes with the operational efficiency of different firms within the business, the impression of LIFO on the corporate’s outcomes of operations is a reconciling merchandise to reach at non-GAAP monetary measures.

Transformation bills — Prices incurred in reference to the corporate’s marketing strategy that focuses on particular transformative actions that relate to the mixing and streamlining of its working construction throughout the enterprise, that the corporate doesn’t view to be regular money working bills. These bills embody, however aren’t restricted to the next:

  • Restructuring prices – Prices primarily regarding the early termination of lease obligations, asset impairment prices, different facility closure prices and group member severance in reference to our voluntary retirement program and continued optimization of our group.
  • Third-party skilled companies – Prices primarily regarding companies rendered by distributors for helping the corporate with the event of varied data expertise and provide chain initiatives in reference to the corporate’s enterprise integration initiatives.
  • Different vital prices – Prices primarily regarding accelerated depreciation of varied legacy data expertise and provide chain programs in reference to the corporate’s enterprise integration initiatives and short-term off-site workspace for mission groups who’re primarily engaged on the event of particular transformative actions that relate to the mixing and streamlining of the corporate’s working construction throughout the enterprise.

GPI amortization of acquired intangible belongings — As a part of the corporate’s acquisition of GPI, the corporate obtained numerous intangible belongings, together with buyer relationships, non-compete contracts and favorable lease agreements, which they count on to be topic to amortization via 2025.

Reconciliation of Adjusted Web Revenue and Adjusted EPS:

 

 

 

 

 

 

 

Twelve Weeks Ended

 

Forty Weeks Ended

(in 1000’s, besides per share knowledge)

October 9, 2021

 

October 3, 2020

 

October 9, 2021

 

October 3, 2020

Web revenue (GAAP)

$

169,813

 

 

 

$

147,476

 

 

 

$

534,439

 

 

 

$

381,024

 

 

Value of gross sales changes:

 

 

 

 

 

 

 

Transformation bills:

 

 

 

 

 

 

 

Different vital prices

143

 

 

 

79

 

 

 

2,611

 

 

 

1,627

 

 

LIFO impacts (1)

29,410

 

 

 

(15,855

)

 

 

71,599

 

 

 

(3,908

)

 

SG&A changes:

 

 

 

 

 

 

 

GPI amortization of acquired intangible belongings

6,341

 

 

 

6,324

 

 

 

21,246

 

 

 

21,086

 

 

Transformation bills:

 

 

 

 

 

 

 

Restructuring prices

2,360

 

 

 

2,581

 

 

 

27,063

 

 

 

12,221

 

 

Third-party skilled companies

4,823

 

 

 

4,660

 

 

 

18,394

 

 

 

8,924

 

 

Different vital prices

1,492

 

 

 

1,438

 

 

 

7,406

 

 

 

13,560

 

 

Different revenue adjustment

36

 

 

 

48,022

 

 

 

 

 

 

48,022

 

 

Provision for revenue taxes on changes (2)

(11,151

)

 

 

(11,812

)

 

 

(37,080

)

 

 

(25,383

)

 

Adjusted internet revenue (Non-GAAP)

$

203,267

 

 

 

$

182,913

 

 

 

$

645,678

 

 

 

$

457,173

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (GAAP)

$

2.68

 

 

 

$

2.13

 

 

 

$

8.22

 

 

 

$

5.50

 

 

Changes, internet of tax

0.53

 

 

 

0.51

 

 

 

1.71

 

 

 

1.09

 

 

Adjusted EPS (Non-GAAP)

$

3.21

 

 

 

$

2.64

 

 

 

$

9.93

 

 

 

$

6.59

 

 

(1)

The twelve and forty weeks ended October 3, 2020 non-GAAP bills have been adjusted to be comparable with the corporate’s 2021 presentation.

(2)

The revenue tax impression of non-GAAP changes is calculated utilizing the estimated tax price in impact for the respective non-GAAP changes.

Reconciliation of Adjusted Gross Revenue:

 

Twelve Weeks Ended

 

Forty Weeks Ended

(in 1000’s)

October 9, 2021

 

October 3, 2020

 

October 9, 2021

 

October 3, 2020

Gross revenue (GAAP)

$

1,182,454

 

 

$

1,128,471

 

 

 

$

3,856,631

 

 

$

3,397,918

 

 

Gross revenue changes

29,553

 

 

(15,776

)

 

 

74,210

 

 

(2,281

)

 

Adjusted gross revenue (Non-GAAP)

$

1,212,007

 

 

$

1,112,695

 

 

 

$

3,930,841

 

 

$

3,395,637

 

 

Reconciliation of Adjusted Promoting, Normal and Administrative Bills:

 

Twelve Weeks Ended

 

Forty Weeks Ended

(in 1000’s)

October 9, 2021

 

October 3, 2020

 

October 9, 2021

 

October 3, 2020

SG&A (GAAP)

$

953,256

 

 

 

$

871,660

 

 

 

$

3,130,376

 

 

 

$

2,799,837

 

 

SG&A changes

(15,016

)

 

 

(15,003

)

 

 

(74,109

)

 

 

(55,791

)

 

Adjusted SG&A (Non-GAAP)

$

938,240

 

 

 

$

856,657

 

 

 

$

3,056,267

 

 

 

$

2,744,046

 

 

Reconciliation of Adjusted Working Revenue:

 

Twelve Weeks Ended

 

Forty Weeks Ended

(in 1000’s)

October 9, 2021

 

October 3, 2020

 

October 9, 2021

 

October 3, 2020

Working revenue (GAAP)

$

229,198

 

 

$

256,811

 

 

 

$

726,255

 

 

$

598,081

 

Value of gross sales and SG&A changes

44,569

 

 

(773

)

 

 

148,319

 

 

53,510

 

Adjusted working revenue (Non-GAAP)

$

273,767

 

 

$

256,038

 

 

 

$

874,574

 

 

$

651,591

 

NOTE: Adjusted gross revenue, Adjusted gross revenue margin (calculated by dividing Adjusted gross revenue by Web gross sales), Adjusted SG&A, Adjusted SG&A as a share of Web gross sales, Adjusted working revenue and Adjusted working revenue margin (calculated by dividing Adjusted working revenue by Web gross sales) are non-GAAP measures. Administration believes these non-GAAP measures are vital metrics in assessing the general efficiency of the enterprise and makes use of these metrics in its ongoing reporting. On that foundation, administration believes it’s helpful to offer these metrics to traders and potential traders to guage the corporate’s working efficiency throughout intervals adjusting for this stuff (confer with the reconciliations of non-GAAP changes above). These non-GAAP measures may not be calculated in the identical method as, and thus may not be corresponding to, equally titled measures reported by different firms. Non-GAAP measures shouldn’t be utilized by traders or third events as the only real foundation for formulating funding choices, as they could exclude quite a few vital money and non-cash recurring gadgets.

Reconciliation of Free Money Stream:

 

Forty Weeks Ended

(in 1000’s)

October 9, 2021

 

October 3, 2020

Money flows from working actions

$

924,936

 

 

 

$

809,218

 

 

Purchases of property and gear

(190,983

)

 

 

(192,632

)

 

Free money movement

$

733,953

 

 

 

$

616,586

 

 

NOTE: Administration makes use of Free money movement as a measure of its liquidity and believes it’s a helpful indicator to traders or potential traders of the corporate’s skill to implement progress methods and repair debt. Free money movement is a non-GAAP measure and must be thought-about along with, however not as an alternative choice to, data contained within the firm’s condensed consolidated assertion of money flows as a measure of liquidity.

Adjusted Debt to Adjusted EBITDAR:

 

 

 

 

4 Quarters Ended

(In 1000’s, besides adjusted debt to adjusted EBITDAR ratio)

October 9, 2021

 

January 2, 2021

Complete GAAP debt

$

1,034,002

 

 

 

$

1,032,984

 

Add: Working lease liabilities

2,610,491

 

 

 

2,477,087

 

Adjusted debt

3,644,493

 

 

 

3,510,071

 

 

 

 

 

GAAP Web revenue

646,436

 

 

 

493,021

 

Depreciation and amortization

251,907

 

 

 

250,081

 

Curiosity expense

37,381

 

 

 

46,886

 

Different (expense) revenue, internet

(6,004

)

 

 

3,984

 

Provision for revenue taxes

200,268

 

 

 

157,994

 

Restructuring prices

31,607

 

 

 

16,765

 

Third-party skilled companies

23,587

 

 

 

14,117

 

Different vital prices

13,956

 

 

 

19,126

 

Transformation bills

69,150

 

 

 

50,008

 

Different changes (1)

 

 

 

48,022

 

Complete internet changes

552,702

 

 

 

556,975

 

Adjusted EBITDA

1,199,138

 

 

 

1,049,996

 

Lease expense

563,693

 

 

 

553,751

 

Share-based compensation

59,975

 

 

 

45,271

 

Adjusted EBITDAR

$

1,822,806

 

 

 

$

1,649,018

 

 

 

 

 

Adjusted Debt to Adjusted EBITDAR

2.0

 

 

 

2.1

 

 

 

 

 

(1)

The changes to the 4 quarters ended October 9, 2021 and January 2, 2021 symbolize prices incurred ensuing from the early redemption of the corporate’s 2022 and 2023 senior unsecured notes.

NOTE: Administration believes its Adjusted Debt to Adjusted EBITDAR ratio (“leverage ratio”) is a key monetary metric for debt securities, as reviewed by score companies, and believes its debt ranges are finest analyzed utilizing this measure. The corporate’s purpose is to take care of an funding grade score. The corporate’s credit standing instantly impacts the rates of interest on borrowings beneath its present credit score facility and will impression the corporate’s skill to acquire further funding. If the corporate was unable to take care of its funding grade score this might negatively impression future efficiency and restrict progress alternatives. Comparable measures are utilized within the calculation of the monetary covenants and ratios contained within the firm’s financing preparations. The leverage ratio calculated by the corporate is a non-GAAP measure and shouldn’t be thought-about an alternative choice to debt to internet earnings, internet earnings or debt as decided in accordance with GAAP. The corporate adjusts the calculation to take away hire expense and so as to add again the corporate’s present working lease liabilities associated to their right-of-use belongings to offer a extra significant comparability with the corporate’s friends and to account for variations in debt constructions and leasing preparations. The corporate’s calculation of its leverage ratio may not be calculated in the identical method as, and thus may not be corresponding to, equally titled measures by different firms.

Retailer Data

Throughout the forty weeks ended October 9, 2021, 25 shops and branches have been opened and 40 have been closed or consolidated, leading to a complete of 4,961 shops and branches as of October 9, 2021, in comparison with a complete of 4,976 shops and branches as of January 2, 2021.



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