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O'Reilly Warns Sales Could Flatline as Car-Parts Retailers Slump
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By Counterman
Advance Auto Parts reported net sales of $11.2 billion for 2022, up 1.4% from 2021, while comparable-store sales were flat.
Fourth-quarter net sales increased 3.2% to $2.5 billion, while comparable-store sales were up 2.1%.
“In 2022, our team members once again worked to serve our customers with relentless focus and dedication,” said Tom Greco, president and chief executive officer. “Despite challenges throughout 2022, we made progress on our strategic initiatives, including the expansion of our footprint, further strengthening of our DieHard brand and improved customer loyalty. However, we are not satisfied with our results in 2022 and are taking decisive actions to improve performance in 2023. Importantly, the disciplined inventory and pricing actions we discussed last quarter to adapt to an evolving competitive landscape contributed to stronger results in Q4 and we ended the year with positive momentum.
“We expect to see further improvements in inventory availability throughout 2023, which we view as the single most important driver to accelerate topline growth. After several years of significant investments in complex transformation initiatives and the majority of the integration behind us, we’re now able to focus more time and resources on leveraging our differentiated asset base and improving execution to drive long-term shareholder value.”
Advance’s 2023 guidance is for net sales between $11.4 billion and $11.6 billion, and year-over-year growth in comparable-store sales between 1% and 3%.
“In 2023 we are shifting to GAAP as our reporting method for annual guidance,” said Jeff Shepherd, executive vice president and chief financial officer. “As the GPI integration nears completion, we expect transformation costs to be less impactful, which reduces the need for non-GAAP adjustments. In addition, we believe that focusing on GAAP results will improve the understanding and comparability with our closest peers. In 2023 we are elevating our performance to improve topline growth and share gains while delivering operating income margin expansion.”
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By AutoZone
MEMPHIS, Tenn. , Feb. 28, 2023 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $3.7 billion for its second quarter (12 weeks) ended February 11, 2023 , an increase of 9.5% from the second quarter of fiscal 2022 (12 weeks). Domestic same store sales, or sales for stores
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By Counterman
“The GPC team capped off a record-setting year with a strong fourth quarter highlighted by double-digit sales and earnings growth and continued margin expansion,” said Paul Donahue, chairman and CEO. “We are incredibly proud of our progress throughout the year and thankful to our teammates across the globe for their ongoing commitment to excellence. Working together, we have been agile in navigating the dynamics of the macro-economy and continue to deliver market share gains and drive positive momentum in our top and bottom-line results.”
Full-year net sales for the Global Automotive Parts group were $13.7 billion, up from $12.5 billion in 2021.
In the fourth quarter, net sales for the Global Automotive Parts group were $3.4 billion, up 7.6% from fourth-quarter 2021. Comparable-store sales were up 8.2% in the auto parts segment.
Industrial sales were $2.1 billion, up 29.6% fourth-quarter 2021, and reflecting a 16.7% increase in comparable sales and a 14.3% contribution from the KDG acquisition.
“The strength in Automotive sales was broad-based, with double-digit total sales growth in local currency in each of our global operations,” said Will Stengel, president and chief operating officer. “In addition, Industrial generated its seventh consecutive quarter of double-digit sales comps and 10th consecutive quarter of margin expansion, while continuing to execute well and create value with the accelerated integration of KDG. Our strong fourth quarter and record financial performance in 2022 are testaments to our teams’ hard work and dedication to serve our customers.”
For full-year 2023, GPC is projecting total year-over-year sales growth between 4% and 6%, according to its guidance. GPC is estimating year-over-year sales growth between 4% and 6% for both the Automotive Parts Group and the Industrial Parts Group.
“We had an exceptional 2022, which included celebrating our 95th year of operations,” Donahue said. “We have quickly turned our attention to the year ahead and, while the macro environment remains uncertain, we are confident in our strategic plans to drive sustained sales and earnings growth, continued margin expansion and strong cash flow. We believe our progress in these key areas, combined with a strong balance sheet, position GPC with the financial strength and flexibility to pursue strategic growth opportunities while also returning capital to shareholders
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By Counterman
With each new season, we’re presented with different challenges and different sales opportunities. It’s up to us to capitalize on these opportunities, and help boost our margins and keep our stores in the green. So, as the temperature starts to drop outside, let’s take a look at what we can do inside our stores to boost add-on sales, and what trends we can expect to see in the coming months.
‘Tis the season
The first category we’re going to look at is what I call “winter seasonal products.” These are the types of products that only come out to the shelf during this season. Ice scrapers, snow brushes, winter hats and gloves all fall into this category. Many stores will display these types of products on an end cap, or a special cardboard stand or display.
There are lots of opportunities to get add-on sales with this category. If a customer is buying a snow brush or ice scraper, ask them if they’d also like to pick up a pair of winter gloves, or a jug of de-icing windshield-washer fluid. Every little bit will help to boost your margins.
There are some products that fit into this category, but they stay out on the shelf all year long. One example would be fuel and oil additives. While these additives can be found all year long, they’ll likely move off the shelf faster in the winter. Why? Colder temperatures are especially harsh on vehicles that run on diesel fuel. When the temperature drops, diesel fuel can gel. This can lead to clogged fuel lines and filters. That’s why many diesel owners will pick up fuel-system treatments in the winter.
Batteries
Battery sales tend to jump twice a year: when the temperatures climb in the summer, and again when they drop in the winter. Cold weather takes a toll on batteries and electrical systems. Engine oil is thicker when it’s cold, so the engine is harder to start than it would be at warmer temperatures. On top of that, the colder temperatures will sap the cranking power the battery has to offer. There’s a good reason why batteries are rated for cranking amps (CA) and cold-cranking amps (CCA). The temperature outside has a big impact on how much power the battery has to offer.
When it comes to selling batteries, always remember to offer dielectric compound, as well as the fiber insulators that slide over the battery posts and sit underneath the battery cables. I’ve also had good luck selling small, compact battery jump packs to customers in the past. These small battery jumpers aren’t much bigger than a cellphone, but they pack a big power punch when you need it most. They’re relatively inexpensive, but they offer some serious peace of mind.
Wiper Blades
I’ve talked before about how I dreaded two types of days in the parts store: heavy snowfall and heavy rainfall. Why? Because I knew that we would be selling a ton of wiper blades on those days. It also meant that I would be installing all of those wiper blades outside, so I’d either end up soaking wet from the rain, or frozen stiff from the snow and ice. Worst of all, our margin on wiper blades was pretty thin, so our store numbers wouldn’t fare very well that day.
So, what did we do to boost our margins? We would do our best to upsell the better wiper blades, as well as offering washer fluid and other add-ons along with the wipers. For SUVs and wagons, we would always ask them about the rear wiper blade. Experience has taught me that many customers will neglect that small rear wiper blade, so it’s important to ask.
Our final tip in this category is to tell your customers about the benefits of using a washer fluid with a de-icing formula. Many customers aren’t aware of how this type of washer fluid can help them day-to-day, and it’s an easy add-on sale.
Belts & Hoses
This final category will only represent a small percentage of your winter sales, but it’s important to be aware of what you can expect. Belts and hoses can become brittle, crack or break altogether when the temperature drops. Modern modular hoses usually will have plastic connectors or tees that are especially susceptible to the cold, and if they break, the customer will need to buy the entire hose. It’s important for your customers to check belts and hoses for signs of wear or damage before the winter weather hits. It’s much better to catch this sort of issue early, rather than wait until the vehicle breaks down on the side of the road.
I had a few customers who would stock up on detailing supplies once the weather started to turn. They told me that they would wax their car before the snow came so the paint would be better-protected from the elements. These days, ceramic coatings are available that do an even better job of protecting the paint from the hazards seen during the winter.
So, take a walk around your store and think about what you expect to see selling this winter. Come up with a game plan for how you can maximize your sales numbers heading into the winter season, and what types of add-on sales opportunities you can find.
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By AutoZone
MEMPHIS, Tenn. , Dec. 06, 2022 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.0 billion for its first quarter (12 weeks) ended November 19, 2022 , an increase of 8.6% from the first quarter of fiscal 2022 (12 weeks). Domestic same store sales, or sales for stores open
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