Release Date: February 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you help us reconcile operational improvements for some of the underperformance in North American comp growth, and when would you expect to see these improvements start to show through on relative sales or market share? A: William Stengel, President and COO, explained that while some improvements are quick wins, others are longer-term efforts. He emphasized that they are proud of the progress and are working actively with independent owners to compete effectively. The company is focused on improving its commercial business and addressing softness in discretionary areas, with expectations of continued progress.
Q: Can you give guidance on how you think about the progression of comps over the year, particularly for Motion in the US and NAPA business? A: Herbert Nappier, EVP and CFO, stated that they expect weak conditions to persist through the first half of the year, with improvement anticipated in the second half. The company is looking for sequential improvement across the year, supported by a better sales environment and easing market conditions.
Q: What is driving EBITDA margins flat to up in the automotive segment, and is there a target for buying back independents in 2025? A: Herbert Nappier noted that gross margin expansion, a better sales environment, and cost actions are expected to drive EBITDA margins. William Stengel added that while there will be less material impact from buying back independents, the company is focused on optimizing operations and harmonizing costs post-acquisition.
Q: How should we model or think about the sensitivity of earnings to the top line if the industry doesn't accelerate as expected? A: Herbert Nappier highlighted that the company has expanded its cost actions and restructuring to balance long-term and short-term needs. They have the ability to lean further into cost actions if necessary, focusing on protecting customer-facing roles and service.
Q: With one large competitor exiting the West Coast, do you see any opportunity to gain market share there? A: William Stengel confirmed that changes in the competitive landscape present opportunities. The company is focused on executing well to capture these opportunities, leveraging its national account business and network of auto care facilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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