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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 Counterman
You can’t turn a corner these days without seeing a headline about electric vehicles. In recent years, this caused some consternation in the automotive aftermarket, with internal combustion engine (ICE) vehicles being the bread and butter for this industry. However, new data shows there will continue to be room for – and a need for – products for both incoming electric and ICE vehicles.
According to data from the Joint EV Trends and Outlook Forecast from MEMA and Auto Care Association, while EVs are beginning to penetrate the U.S. car parc, ICE vehicles will maintain the majority share through 2040. By 2030, the average estimate for approximately 30% of new car sales will be electric vehicles, according to PwC, which partnered with the associations on the joint forecast.
That being said, over the past several months, we have seen a significant uptick in industry activation surrounding vehicle electrification, in a variety of ways.
Within the automotive aftermarket, we are beginning to see a mindset shift, moving from skepticism surrounding the idea of EVs into more companies seeing the opportunities available in this rapidly growing space. Take for example longtime diagnostic products provider Autel entering the market this past June with the launch of its new Autel Energy division, which released the MaxiCharger Home and Commercial Level 2 AC chargers, available in 40-amp and 50-amp flexible charging configurations, compatible with all plug-in electric vehicles.
In the automotive repair equipment space, BendPak recently introduced its EV2400SL EV battery pack and powertrain lifting system. This push-around full-rise scissor lift table is designed to make replacing both electric vehicle battery packs and internal combustion powertrain components more efficient, the company said. The patent-pending design offers all the benefits of BendPak’s former SL24EVT lifting system with several user-friendly enhancements.
Just this past month, GM announced plans to invest a total of $20.5 million across three of its Customer Care and Aftersales parts distribution centers in Tennessee and Michigan to modernize warehouse operations as the automaker prepares for industry growth and electric vehicle readiness.
NAPA also saw the need to invest in preparation for the incoming change and this past fall announced its “NexDrivePowered by NAPA” training program in the U.S. to prepare repair shops for the changes electrification brings in the repair segment.
In January, Shell paid a cool $169 million to acquire EV charging company Volta to “unlock long-term growth opportunities in electric vehicle charging,” the company stated.
Bridgestone unveiled at CES this January it’s new Smart Corner solution, a demonstration of the ability to enhance the performance, comfort and efficiency of electric and autonomous vehicles, while maximizing the lifespan of tires and air springs. The solution combines premium Bridgestone tires and Firestone Airide (previously Firestone Industrial Products) air springs that are engineered specifically for electric and autonomous vehicle applications.
Standard Motor Products said it is committed to providing replacement parts for hybrids and EVs and has added new part numbers specifically for hybrids and EVs through its Standard and Four Seasons brands.
Valvoline and ENEOS both have developed automotive fluids specifically for use in Hybrid and Plug-in EVs.
These are just a handful of examples of businesses that have long been involved in the traditional ICE market segment creating opportunities in the EV market, as well.
From a consumer standpoint, the rate adoption of EVs varies from country to country, with cost (be it cost-savings or cost barriers) being one of the top factors.
According to AMN’s sister publication dedicated to EVs, The Buzz, “While internal combustion engine (ICE) vehicles still dominate future vehicle purchase intentions, preference for electrified powertrains continues to rise. Overall, the global shift to EVs is occurring at different speeds as individual markets face varying challenges to adoption, including cost and availability of charging infrastructures.”
Citing data from Deloitte’s 2023 Global Automotive Consumer Study, The Buzz noted that “Despite mounting concerns about climate change and reducing emissions, lower fuel expenses are the top reason consumers choose EVs in the U.S., Germany, India, Japan, the Republic of Korea and Southeast Asia, in an effort to reduce vehicle operating costs.”
In the U.S., intent to purchase hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV) and all-battery powered electric vehicles (BEV) are each up by 3 percentage points from 2022. Globally, consumer interest in BEVs is highest in China (27%, up 10 points year-over-year).
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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
In our cover story for
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AMN/CM: What did your organization accomplish in 2022 that you are most proud of?
ST: I am so proud of our team here at APA/TruStar headquarters as well as our shareholders and members. The acquisition of TruStar at the beginning of 2022 not only significantly increased our membership but also opened the door to access additional product categories for all APA/TruStar distributors and increased our footprint to better access national account opportunities. Probably just as big for us is the increase in investments we have made in technology. Providing our distributors with easy access to data that is tailored to their market area is absolutely key in being able to structure inventories to best serve our customers. The adoption rate of these new tools has exceeded my expectation, and I know this will continue to be a big part of the services we provide. Finally, we have grown APA by recruiting distributors who may have not currently been part of a group and see the value of joining APA, and also by recognizing the opportunities bringing those members into APA provides to not only recruit but to our existing shareholders. Bringing non-direct purchases back into the group makes us all stronger not only for the group itself, but it also makes us more valuable to our supplier partners as well. Life is good here at APA!
AMN/CM: How can the independent aftermarket parts and service segments best prepare to repair the car of tomorrow as ADAS, EVs and other technologies become more prominent?
ST: This has become a “go-to” topic just about any time we gather. Aside from getting better access to the information we need to effectively make repairs, I just don’t see a major problem. The amount of parts and repairs actually involving the current internal combustion powerplant in today’s vehicle is minimal compared to repairs being performed on the remainder of the vehicle systems. The chassis and braking systems on EVs and ICE vehicles are very similar, and parts availability for EVs is rapidly improving, so I am quite optimistic we will be able to adequately service these vehicles just as we do with today’s ICE-powered platforms. The other technologies such as ADAS, LiDAR, etc., are being repaired to some degree today and as vehicles with those technologies become an even bigger piece of the car parc, I believe our customers will embrace the repair opportunities just as they have with other new technologies. One can argue that repair frequency for EVs and emerging technologies will be less than what we currently see. However, I think the types of repairs will be more “high-tech,” and as such the repair dollars associated with the change should improve in both parts and labor segments. As an industry, we need to remain agile. We must be prepared to support EVs and vehicles that are dependent on ADAS, while at the same time providing parts and service to older vehicles. Our professional customers should be able to rely on us to keep them abreast of trends, tools and the training necessary as they continue to service a wide range of vehicles. We’ll be making this a top priority, especially as the electrification and ADAS categories continue to become major growth contributors. I would also mention this increases the importance of Right to Repair for our industry. As systems become more complex, we need to ensure that professional shops have access to critical data that helps repair vehicles. We will continue to advocate for Right to Repair with industry partners.
AMN/CM: What do you feel is the greatest threat facing the automotive aftermarket right now?
ST: I strongly believe that threats are just opportunities you haven’t yet mastered. Getting access to information from the OEMs that will allow our technician customers to keep doing what they do is one of the biggest threat/opportunities we face today in my opinion. Another major issue is not peculiar to our industry and that is one of finding and retaining employees. From the repair facility through the distribution chain and to our supplier partners we are all facing the same challenges on this issue. For a lot of us this industry has been more of a lifestyle than just a career, and we need to pass this passion on to those standard bearers of the future.
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