Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How do you differentiate between company-specific challenges and broader market dynamics affecting the retail business, especially with increased competition in auto retail? A: Angus McKay, CEO: The retail market is competitive, not just in auto but across the board. Our retail business is undergoing a reset, particularly in how it trades. We've shifted from all-store sales to category-based promotions funded by suppliers. This is a significant change in our promotional strategy, and while I can't attribute challenges solely to market dynamics or internal issues, these steps are crucial for resetting our retail operations.
Q: Can you elaborate on the strategic inventory ranging and pricing mentioned in your future focus areas? A: Angus McKay, CEO: We hold a vast array of parts, which is a competitive advantage. However, we need to be strategic about where we hold this inventorywhether at distribution centers, micro fulfillment centers, or stores. The goal is to optimize the range for the cars in the local area and ensure pricing is competitive, both externally and internally, to eliminate unnecessary competition within our own business.
Q: Are you expecting a build-up in latent demand leading to volume growth in the trade segment after a period of flat volumes? A: Angus McKay, CEO: There is hope for volume growth as customers return to regular servicing after managing their budgets during high inflation. Our focus is on optimizing volume versus value, maintaining margin structures, and taking advantage of returning customer demand without sacrificing margins.
Q: What is the expected timeline for the IT platform modernization and consolidation across the group? A: Angus McKay, CEO: This will be a slow process due to our complex and aged IT landscape. We are focused on structured improvements, consolidating systems where possible, and prioritizing resources effectively. The timeline is not fixed, as it depends on our capacity to manage change and leverage existing platforms for scale and benefit across the group.
Q: With the cost savings target of $20 to $30 million nearly complete, are there further opportunities for cost reduction? A: Angus McKay, CEO: While we are confident in reaching the top end of the current savings range, we are already considering further opportunities, such as additional warehouse consolidations and optimizing store-based costs relative to micro DC costs. More details will be shared in our strategic update in April.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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