Hello and welcome to the Advance Auto Parts' Third Quarter 2023 Conference Call. Before we begin, Elisabeth Eisleben, 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 Q3 2023 results. I'm joined by Gene Lee, our Interim Executive Chair; Shane O'Kelly, President and Chief Executive Officer; and Tony Iskander, Interim Chief Financial Officer. Following Shane and Tony's 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 the historical fact are forward-looking statements, including but not limited to statements regarding our ongoing strategic and operational review, initiatives, plans, projections and future performance. Actual results could differ materially from those projected or implied by the forward-looking statements. 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 Shane.

Good morning, everyone, and thank you for joining us. I'm pleased to be here for my first earnings call as the CEO of Advance. We have several topics to discuss with you this morning. But before I begin, I'd like to thank all of Advance's team members who I've come to know during my first 60 days with the company. During that time, I visited our stores across multiple markets, met with numerous customers, spent time in our distribution centers, got to know our Carquest Independence and attended our Annual Vendor Summit where I had the chance to meet with many of our major suppliers. Through all of this, I came away impressed with the passion and dedication of our frontline team members and I remain optimistic about the future of the company. In addition to spending time in the field, I have partnered closely with the Board and Management team to make progress on our strategic and operational review. As the new CEO, I place a premium on capabilities learned during my time in the military. This includes aligning the company around fewer measurable goals while ensuring discipline and accountability in the process to achieve those goals. During my review of Advance, we identified the need to simplify our overall strategy while also improving execution, both of which will create value. Consistent with that, we are moving forward with a sense of urgency to help stabilize the company and return to profitable growth. Today, we are announcing decisive actions that we have initiated to achieve these objectives. Those actions are, number one, the initiation of a sale process for Worldpac; number two, the initiation of a separate sales process for our Canadian business; number three, significant cost reductions; number four, reinvestment in the field and number five, the appointment…

Thanks, Shane and good morning. I would also like to thank all our team members for their continued dedication and focus on the customer. In Q3, our net sales of $2.7 billion increased 2.9% compared with Q3 2022, due to continued strength across our professional business. Comparable store sales increased 1.2%. All our regions were positive during the quarter with the West, Florida and Northeast regions posted mid-single-digit growth. From a category perspective, we saw strength in filters, engine management, motor oil and batteries. Importantly, we've delivered meaningful growth in heating and cooling as we significantly improved our in-stock levels year-over-year. In terms of the cadence of the quarter, both Pro and DIY omni-channel saw strength in the first two periods and softened the last four weeks of the quarter. Our Pro business was positive throughout Q3 and outperformed DIY omni-channel as transactions continued to improve and were up mid-single digits from the previous year on top of the improvement in Q2. As expected, average ticket in Pro was down slightly as part of our ongoing efforts to maintain competitive price targets. However, units have increased slightly year-over-year. DIY omni-channel average ticket was up mid-single-digit with transactions down low single-digit in Q3. Before turning to the balance of our P&L, we've made strong progress towards remediating the material weakness and as part of our diligence in this process, we uncovered non-material issues with our previously reported financial results. The balance of our financial results will compare our Q3 actual results to the corrective results for the prior year. The remediation of our material weakness remains a top priority. Despite improving top-line trends, our gross profit margin was negatively impacted by several factors and deleveraged 830 basis points compared with Q3 2022. First, in line with the decisive actions Shane highlighted…

As I mentioned earlier, we recognize there is substantial work to be done and are focused on executing a strategy centered on our customers and our frontline team members, while continuing to look at additional opportunities to simplify our operations. We are taking and will continue to take decisive action to stabilize the business and position Advance for long-term sustainable success. All of us at Advance, the Board and the entire Management team are committed to returning to profitable growth and creating value for shareholders. I look forward to providing you with further updates on our next earnings call. I would now like to open it up to address your questions. Operator?

Thank you. [Operator Instructions] Our first question today goes to Michael Lasser of UBS. Michael, please go ahead, your line is open.

Good morning. Thank you so much for taking my question. Shane, I know it's been very early in your tenure at Advance Auto Parts, but there's so many moving pieces in the business right now. As you think about the long term, what's the realistic operating margin for the core business, you know, excluding some of the businesses that you're looking to sell, and it seems like the implied gross margin is going to settle around the 41% range, is that the correct run rate that we should think about for the long-term?

Hey, Michael, thanks for the question. It's too early for me to set what the long-term OI looks like for this company, other than to say that I'm optimistic about where it can go and that if we do these five decisive actions as we implement them, they'll all help in boosting where we sit there and then same for margin, early days, but know that we are absolutely focused on where we can increase the margins and we'll be looking to do that in '24. Just one other small comment there, a way to help think about making that happen is with our org structure where one dimension of that is having merchandising via direct report to me and I view that as a critical component for managing margin in a retail company.

Okay. And my follow-up question is are you seeing any impact from the negative credit rating downgrade and how are you thinking about capital needs of the business and, if anything, you could comment around the size of Worldpac or the Canadian business that will help that as you go through the process?

So a lot there, I'm going to ask Tony to comment, but we don't have liquidity issues or issues on supply chain financing and then, I'm not going to comment on the size of Worldpac or Canada, we've engaged Centerview to manage that process and interested parties can reach out to them, but Tony, can you tell us about the liquidity and financing?

Yeah. Hey, Michael. Good to talk to you again. As you heard in my prepared remarks, we have continued to maintain the same level or very similar levels for our supply chain finance program, which really supports our vendors and our finance programs. So we're not seeing any impact, and as you saw in our earnings release, we continue to grow cash flow, our cash balance on the balance sheet grew and we did not have any outstanding on the revolver as we have paid that down during the quarter as well.

Thank you very much.

And the last thing, there is no -- and Michael, there is no urgency or requirements around the sale of Worldpac or Canada, they are both good businesses. This is really around our strategy and what we want to focus on as a company going forward, which is that domestic blended box model.

Understood. Thank you very much and good luck.

Thank you. And our next question goes to Chris Horvers of JPMorgan. Chris, please go ahead, your line is open.

Hi, good morning. It's Christian Carlino on for Chris. I guess, stepping back, how would you characterize, you know, what went wrong with the supply chain and any color on the path forward in terms of the timeline or the cost to fix it? You laid out the timeline for the cost saves, but it seems like you'll also be paring back maybe some of the smaller Carquest DCs. So, will you then need to add, you know, more modern or better located facilities or is it more, you know, on the operational front fixing the inventory management process?

So a lot there, thanks for the question. The first thing I'll say is, you know that our supply chain stems from the two entities from Carquest and from Advance. That'll be one of the next areas where I'll be putting focus is really around validating the design of our future supply chain and, as we do that, there'll be some rationalizations, there may be some facility additions, but we're comfortable, we'll develop that plan as we go forward. In terms of availability, those efforts can be discrete of just what occurs on the actual supply chain design and there's been a lot of work going on there, which we've improved across a number of areas, think about that as undercar, engine management, heating and cooling, brakes and that comes from the pick and shovel work going on with the merchandise and inventory teams.

Got it. That's helpful and then just one quick one on the guide. What are you including for the one-time reorganization costs in 4Q. And then I guess also, you know, how -- in terms of how you're managing the supply chain finance program, are -- is it -- is the implication that you're maybe giving suppliers back some margin in exchange for, you know, holding the payable days somewhat constant. How should we think about, you know, the puts and takes there?

Yeah, two good questions. So first, let's address the supply chain financing, we are not seeing that kind of impact in our programs. We have very strong bank partners and we have a tremendous amount of support from our key vendors and we are not seeing any of that at this time. So in terms of that, we feel good. In terms of the guide in the back half, we have not laid out the impact from the restructuring, it is included in our guide. We're really not commenting on that just due to the sensitivity around our team members as we kick this off.

Yeah. Those reorganization dimensions are taking place this week and we want to be sensitive to our associates. That's a difficult process for any company to go through.

Got it. That makes sense. I appreciate that.

Thank you. The next question goes to Elizabeth Suzuki of Bank of America Merrill Lynch. Elizabeth, please go ahead, your line is open.

Great. Thank you. Just a question on the decision to increase the new store opening pace. I mean, particularly in the context of simplifying the business and preserving cash flow. Just curious what you're seeing in terms of, you know, new store profitability and whether that's been exceeding your expectations?

Yeah. So hey, Liz, good to talk to you again. We increased that based on a couple of opportunities that we have had in terms of opening stores, or accelerating some of those openings -- new store openings. So we believe that, you know, we will continue to be very prudent in our approach to new stores and we will continue to focus on asset productivity that we've talked about the last two quarters, and that's an important part of our business.

And just that, just a question on the businesses that you're planning to sell and, you know, what was acquired back in 2014. Just thinking about how that -- how those assets have evolved and whether, you know, because -- so you are selling the Canadian part of the Carquest business but keeping the US part and selling the Worldpac part of the GPI acquisition, so just trying to frame or size those, you know, businesses as much as possible just, you know, for our own analysis?

Yeah, we don't do segment reporting. So not prepared to break those out now. But just reiterating, they are both good businesses and that sales processes we're just starting that now So we'll do price discovery with potential suitors, no requirement to sell the business if we're not satisfied with what we see in the market and so we're just starting that now.

Okay, fair enough. Thank you.

Thank you. The next question goes to Steven Zaccone of Citigroup. Steven, please go ahead, your line is open.

Good morning. Thanks very much for taking my question. To follow up on the prior question, could you please talk about the Worldpac business, is it much higher than reported operating margin that you have today and then help us think about the priorities for the cash proceeds from these sales, how would you rank using that cash?

Yeah, so good question. Unfortunately, back on the segment reporting, not going to talk about the business other than to say it's a great business. We don't have a requirement to sell it. Selling it lets us simplify our approach going forward, which is to that blended box model. Your question on the proceeds is a good one and first and always in a business if you have the economic dollars from an event like this, we're going to deploy it to initiatives that clear our internal rates for what we want to do with the business. So there's investment for our business, the growth of the remaining business, we're excited about that. Secondly, always prudent to deploy funds to strengthen the balance sheet, so that becomes an option for the proceeds. And then third, we can look at shareholders and where excess capital might be returned to that. Those would be the three major efforts of how we think about that.

Okay. I understood. My follow-up question is just on the DIFM side. So with your fresh perspective on the business, why do you think the core Advance business has been losing share in DIFM and I guess specific -- specifically there, you know, average ticket has been a bit of a drag. How long do you expect that to be a drag to the Pro side of the business?

Yeah, so I'm going to ask Tony to break out a bit of flavor on our DIY versus DIFM performance, but know that, you know, my focus coming into the organization is to take those decisive actions that help us simplify the business and then provide the focus at that store level for both the DIY and DIFM customer. And as we do that, I think that's where we gain success. But Tony, can you just characterize what you're seeing on DIFM right now?

Yeah, correct. So as you've heard us talk about the last two to three quarters, we continue to focus on a very targeted CPI number. And as part of that, that will bring down our average ticket. And as a result, though, our transactions continue to increase.

Okay, thanks very much.

Thank you. The next question goes to Greg Melich of Evercore ISI. Greg, please go ahead, your line is open.

Greg, can you hear us? You can go ahead and switch to next one.

Thank you. The next question goes to Bret Jordan of Jefferies. Bret, please go ahead, your line is open.

Hey, good morning, guys. I guess coming into this with -- coming into this -- hey, good morning, this sort of clean, looking at the business with fresh eyes and, obviously, the perception has always been sort of a mash up of various supply chain systems. How close do you see this to being sort of consolidated to being a common supply chain across all of the stores ex-Worldpac? You know, we had real progress been made from a system standpoint.

You know, so the supply chain team is diligently on task for that. And for me that, you think about the five decisive actions we've covered that's where my immediate focus is. Our pivot to supply chain shortly after that, and my sense is, we'll come back to you on future calls on what the timeline looks like, but we're working on it. It's not something that will be done overnight, but confident that we can get to a unified supply chain for the company.

Okay. And then I guess on Worldpac, you know what do you see I guess a dis-synergy in the sale, were there common customers or sales to Advance that were a result of your having the Worldpac business that you might lose or is it relatively separate?

So it is a different business and it runs as a separate business. So I really don't seek dis-synergies there, but what I see for us as we sell that business is a simplification of our focus. And going back to the fundamentals, we're going to sell Auto Parts out of a blended box model. We think that's a good recipe for success. And as we do that, Worldpac doesn't fit in that future model, so we will explore the sales process, which we're kicking off today.

Okay. And a quick housekeeping for Tom, what was the price contribution to comp, what was inflation versus traffic?

Yes, so I think that's for Tony. Yes, so in terms of price inflation, we priced just enough to cover a portion of costs. So it was very minimal to our comp in the third quarter.

Okay, thanks.

Thank you. The next question goes to Scot Ciccarelli of Truist. Scott, please go ahead, your line is open.

Good morning, guys. Scot Ciccarelli. I wanted to ask about the restatements under the -- where there's smoke there's fire concept. What gives you guys confidence there aren't bigger issues in your historical financials, because it seems like what you disclosed today was uncovered after a pretty short stint for the new finance team, so could we end up in a situation where more digging reveals more issues?

Thanks, Scot. Tony here. You know, remediating the material weakness is our top priority in finance and we continue to dig in and we are committed to getting this material weakness remediated and behind us as quick as possible. It is possible, but it is possible that -- to not either. So, we'll continue to share as we find more information, but we will keep you abreast of that material weakness remediation as well.

Got it. And then can you repeat the comments you made on LIFO. Did your numbers this quarter actually include a sizable year-over-year benefit from LIFO. Is that what I heard?

That's correct, Scot.

Got it. Okay. Thank you, very much.

Thank you. The next question goes to Simeon Gutman of Morgan Stanley. Simeon, please go ahead. Your line is open.

Hey, guys. This is Jackie Sussman on for Simeon. Thanks so much for taking our question. You guys mentioned in your prepared remarks that some of the cost savings will go towards reinvesting to improve employee retention. In your view, has Advance kind of done enough to retain its best people and what are some areas to improve improvement that you see or conversely areas where you feel like you're executing pretty well?

So as I've been in the field, I'm impressed with our frontline associates. Got energized team members engaging every day, doing their level best to take care of customers. What we found is in certain key positions in the company, where we were from a wage perspective was below where we want it to be. So we've started to make some of those investments and we see correspondingly where we make the investment, the turnover has reduced and so we think taking some of the monies from the cost reduction and putting that into wage will help further reduce turnover for key positions, but the initiative will extend beyond wage and as our team, our field team and our HR teams work together, we also think that training, career pathing, showing folks how they can develop over time with Advance, that's all part of it as well. And the idea is that for our frontline associates as they come in, they're energized to be here and then they feel that they can have their career with the company and they can see where they can go. So that's all part of the program that we're putting together and the early read from early investments is that it's doing exactly what we wanted to do.

Got you. That's super helpful. And just one more kind of housekeeping question, you know regarding the cost savings that you mentioned. Where will that kind of fit in across the P&L, is that mostly on the SG&A side or almost on gross as well, I mean if you can give some color on that? Thank you.

Yeah. It's predominantly in SG&A, you'll see most of that savings come through there.

Great. Thanks so much.

Next year, of course. Yeah.

Thank you. The next question goes to Chris Bottiglieri of BNP Paribas. Chris, please go ahead. Your line is open.

Hey, everybody, thanks for taking the questions. I was hoping you could elaborate more on this inventory write-down. I appreciate you guys are cleaning accounting up. I think it's really great to see it's someone like concerns for a while now, but this is all related like the capitalized supply chain costs that it has been growing for years and beyond kind of like the one-time write down, was there some over-earning in prior periods because of this adjustment. Just wanted to kind of understand what the impact is going forward?

Yeah. Hey Chris, it's Tony. Good to talk to you. We changed the way we estimate excess inventory and as a result, we took a one-time change or charge to our P&L of $119 million. It is not, it's not relevant to say that it's part of the capitalized supply chain costs. The capitalized supply chain costs continue, those are in and out as a result of how much inventory by yourself, so this is just a result of our change in estimate.

Got you. Okay. That's really helpful. And then the second, what do you think like the right SG&A growth rate of this business is moving forward. It seems like peers are kind of ramping up their investment in terms of SG&A per store. I think it's great that you're reinvesting $50 million of the $150 million, but one on all $150. Like how do you think about reinvestment. It seems like if you're cutting costs and your peers are accelerating investments, it's like, you know, I think it's one of the challenges the business has faced the last five years?

So I'll start. Yeah, it's a good question. I'll start, I'll start and ask Tony to comment. We're not suggesting through this cost cutting that we're not going to reinvest in the business or not going to invest in the business going forward. This was really around looking at the current state of the business and where we're spending money and where we were heavy or where we weren't getting productivity, but we will absolutely be investing for growth in the future, I think that's a key part of it. And then on SG&A, the way I think about just the retail businesses in general, we want to be creating leverage as we go forward, but Tony, if you have any character on how we think about that, that would be great.

Yeah, Chris. So the way to think about it is over the last few years, our SG&A or our cost structure has outpaced, you know, has outgrown our topline. So we did -- the actions we took and we're announcing today are not to stop investing in our stores or in the business. This is to stop doing certain projects or, you know, focus on what's really the fundamental of the business, so and that's how we approach this cost reduction program.

Got it. That's all helpful. Thank you for the color.

Thank you. The next question goes to Steven Forbes of Guggenheim Partners. Steven, please go ahead, your line is open.

Good morning, Shane, Tony. Shane, I wanted to revisit the decision to sell Worldpac. Really, if we could just take a step back, Shane, so early on into the 100-day review process, why such urgency and the message and the decision to sell the Worldpac asset. What is the urgency really stemming from?

Yeah. So first, I don't want you to think that these are knee-jerk decisions, the benefit of counsel and continuity from our Executive Chair, Gene, also talking with statured leaders in the company in terms of assessing what the right direction is so that perspective doesn't just come from me being in the business for 60 days, what I do bring in terms of fresh eyes is a validation of that perspective and then a bias for action, and I think that's really important. One of the things that this company needed to do to reset is to make the decisions that will set us on the trajectory for success going forward. It doesn't mean I have all the answers, readily admit, it doesn't mean that in some of these initiatives that we won't make mistakes and where we do, will correct of course, but clearly as you looked at the performance of the company over time, which I did before I came in, it's clear that where we were with our status quo activities wasn't working and so that's where that comes from. And we think strategically, going forward at that blended box model is a tenant for our success.

And then, I appreciate that, Shane. Just a quick follow-up. I realize you're not providing financial color on the assets for sale, but I'm not sure if you can maybe help reframe what the remaining assets would be free cash flowing this year, right as we sort of think through the $50 million to $100 million guidance for the full year, what is the core asset free cash flow positive this year?

Yeah. Since we don't segment report, we can't break that out for you. We don't anticipate an -- the sale to happen this year. So the $50 million to $100 million is inclusive of our consolidated financial operations.

Thank you.

Thank you. The next question goes to Seth Basham of Wedbush. Seth, please go ahead, your line is open.

Thanks a lot. Good morning. My question is around gross margin. If you could please give us more color on the step-down gross margin from last quarter, this quarter, even excluding the inventory charge we saw step-down. I'm just trying to understand the right [indiscernible] your gross margin.

Yeah, I'll take that. So when you -- when you look at the -- when you exclude the inventory, there's a couple of key factors. One is we continue to not cover cost with price, cost is what we called out that's the predominantly the bigger chunk excluding the inventory. We've also seen some additional deleverage in our supply chain costs, but the predominant cost structure is really coming from not covering costs. And then the other thing that I'd add to that is really the channel mix as we continue to see our Pro rebound that does have lower margin than our DIY business.

So on a per unit basis, are you seeing your costs continue to rise. And is that partly due to higher financing costs for your vendors on the supply chain financing program?

No, we're not, it's not that, it's -- there's inflationary costs that are already built in, but we are not building an additional price to cover that cost.

All right. Thank you very much.

Thank you. The next question goes to Zach Fadem of Wells Fargo. Zach, please go ahead. Your line is open.

Hey, good morning. So first of all, Shane, congrats on the first earnings call. So the question that, could you talk a bit about the game plan for growing your do-it-for-me business today, whether you think the current 60-40-ish do-it-for-me DIY mix is optimal? And then as you think about balancing growth and profitability, should we expect a culling of the business to remove less profitable customers or is there a plan to prioritize the topline over profitability, any color there?

Great. So let's talk about those each in turn. First on growing the Pro, we certainly want to have the Pro be a prominent part of our growth and the way you do that is engagement in the market. It starts with the CPPs in the stores. Those are our store base Pro representatives, also our field-based representatives, our camps and so we've done some moves in terms of how we're organizing that Pro part of our business under Junior Ward and so we've made some streamline moves and, in particular, as we get ready to divest Worldpac. So that will help us on the Pro side of the house and we'll have that focus there. Obviously, it also means we got to have the right parts on hand for the Pros. In this business, you want to be first call and that's where we're aligning our efforts so that as our, as our Pro customers need product, they call us and we go ahead and get it. As it relates to how we think about less profitable customers, I can just put this broadly under just an effort around asset assessment and utilization across the company. We just need to look at how we operate and where we operate and make rational decisions around where we can grow and grow profitably. And I don't want to just do topline without the expense of contributing operating income, I think that's important. So that's what we're looking -- we're looking to get Advance back on a trajectory of consistent profitable growth. And as we look at all of our assets, inclusive of our stores, our supply chain, how we merchandise and then who we sell to, I think it's appropriate to make logical decisions about -- about, with each of those about getting to that profitable growth.

Got it. I appreciate the color there. And then I think you suggested that your operating margin is expected to grow in 2024, so just curious if you could talk a little bit about the makeup there in more detail with respect to top-line growth versus margin recovery versus structural change like taking Worldpac and other costs out of the business?

Yeah, I think it's too soon to start talking about 2024 in terms of margin. You know, we'll come back to you in February and provide you a lot of additional color. What we have said so far is, you know, the cost reduction program that we have announced today, that will benefit full run rate in 2024. So, but more to come in February as we continue down the strategic and operational review of our business.

Got it. Thanks for the time.

Thank you.

Thank you. The next question goes to Priya Ohri-Gupta of Barclays. Priya, please go ahead, your line is open.

Hi. Thank you for taking our question. This is [Orges] (ph) in for Priya. We have a question in terms of the credit ratings. Are you considering soliciting a Fitch rating at this moment? Thank you.

Yeah. As we continue to assess our overall capital structure, we will always consider what makes the most sense for the business. You know if we decide to solicit a Fitch rating for public, we will announce that in the future. At this time, we are maintaining what we have today, we are focused on turning our business and we continue to improve our cash flow and working capital metrics that you've seen us announce this quarter.

Thank you.

Thank you. The next question goes to Michael Montani of Evercore ISI. Michael, please go ahead, your line is open.

Hey, good morning. This is Mike Montani on for Greg Melich. Thanks for taking the questions. I just wanted to ask, first off, on the cash flow side, if you could discuss, you know, the plans to inflect that positive for the full year. I think you're running about $150 million negative through the first three quarters. So it's probably something simple, but how do you get that inflected positive in the fourth quarter?

Yeah, as you've seen over the last two quarters, we continue to generate positive cash flow each of those quarters. As we continue to focus on the business, focus on sales and our working capital, metrics continue to improve. We expect that to continue into Q4 at this time based on what we know and that's what we are looking at based on the recovery of all of our working capital as well as higher sales that you've seen in Q2 and Q3.

Got it. And then if I could just follow up on the sales line, you did mention some deterioration in the final period, was curious if you could discuss if that's continued into the fourth quarter and also, if there's any color in terms of what the DIY that slowed versus Pro or what would have driven this slowdown?

Yeah, we're very conscious of the DIY consumer and the pressures that they're facing. But as we started the fourth quarter, we're actually tracking slightly better in the first four weeks, but we know that we have a challenging December ahead of us, given the lack of last year where we had a significantly colder period than we are expecting this year. But we continue to be very conscious of the DIY consumer and we expect Pro to continue to remain positive as well.

Thank you.

Thank you. Our final question goes to Andrew [indiscernible] of Oppenheimer. Andrew, please go ahead, your line is open.

Hey, it's Brian Nagel from Oppenheimer here. Thanks for taking our questions. We appreciate it. So a couple of questions. You know, first off, just with respect to the competitive environment, you know, given the, you know, this transition -- transformation, if you will and Advance now is pretty well documented. Are you seeing anything change competitively or whether, either from your larger competitors or some of your smaller competitors, particularly on the professional side? And then my second question, Shane, you've laid out welcome first off and then you laid out just some initial steps here in the transformation of Advance. You know, should we be expecting as analysts, investors watching the company, should we be expecting at some point in the not-too-distant future your kind of a longer-term operating plan from you and your team, you know, kind of indicating where this business could ultimately head?

So let's -- thanks, Brian. On the competitive environment, we obviously compete in a market with a number of competent larger players and smaller players. But what I see notably in the -- in my early days is internal excitement with our team, and we've got great frontline team members who I think we're waiting for the unlock around simplifying our focus and as we do these decisive actions, that's what -- that's what's going to occur. We're enabling our frontline to be successful with our customers, which I think helps in that competitive environment. So, you know, early days to talk about where there might be progress economically, but certainly from a philosophy perspective and an engagement perspective, having that field first mentality I think is going to create momentum for us. On the longer term plan, you know, we're still mapping out my first 60 days and we certainly will be in the future looking at what the long-term trajectory for the business is inclusive of the initiatives that we're currently undertaking and then the future areas where I'll be digging in.

Got it. I appreciate it. Thank you.

That is all the questions we have today. Thank you all for joining us. We're grateful for your continued support. Wish you all very Happy Thanksgiving next week and look forward to sharing more in February. Have a nice day.

Thank you. This now concludes today's call. Thank you for joining. You may now disconnect your lines.