Advance Auto Parts 2014 Annual Report Download - page 3

I am pleased to present to you our 2014 Annual Report.
I would like to thank all our Team Members for their hard
work and commitment to better serve our customers and
grow our business during the past year.
In 2014, overall we achieved the objectives we set out
to accomplish at the start of the year. Our priorities
centered on methodically improving our business while
successfully executing on our integration of General
Parts. For the full year, Advance achieved record sales,
we outperformed our nancial expectations set at the
start of the year and generated strong free cash flow.
Our business positions us as one of the most diversied
automotive aftermarket suppliers with the largest
commercial, on-line and import offerings. Collectively, our
base business had a good year led by the strength of our
commercial business which delivered consistent results
throughout 2014. Our comprehensive commercial value
proposition resulting from our General Parts acquisition
was instrumental in generating consistent performance
during the year. We continued to see strong sales gains
from our national and regional account growth and
sustained the growth of our leading e-commerce and
e-service businesses. The team also continued to make
good progress with our commercial service programs
including our banner programs and customer training
services which produced record levels of performance
in 2014.
Our DIY business improved modestly in 2014 compared
to 2013. DIY protability remains strong and increasing
comparable sales growth is a key focus for 2015. We
continue to make investments in DIY to ensure Advance
delivers sales growth and provides a superior experience
to our DIY customers. We are scaling our new loyalty
program called Speed Perks, leveraging our hard parts
availability and continuing to invest in Team Member
training which we believe will be accretive to business in
2015 and beyond.
During the year, we fueled our growth by the addition
of 143 new stores and 8 WORLDPAC branches. We
continued to improve our supply chain capabilities
with the addition of a new distribution center in Hartford,
Connecticut enabling more of our stores with daily
delivery service. We maintained our commitment to
increase in-market availability by opening 47 hub stores
during the year, including expanding our product offering
into Canada with our rst hub in London, Ontario.
Turning to our integration, we were very pleased with
the outcomes of our first full year of integrating General
Parts. The cultural assimilation of the teams ranks
at the top of our accomplishments. It allowed us to
continue delivering great service to customers without
disrupting our business during the integration.
We delivered several key integration outcomes in 2014.
We improved inventory availability to our customers
through sourcing inventory between our stores. Simply
put, it allowed us to say “Yes” more often to our
customers. Advance entered our first new major market
in five years with the opening of stores in Dallas, where
we leveraged the combined assets of Advance and
Carquest. These stores have exceeded expectations
and we will look to continue our expansion in this and
other western markets using the Dallas approach.
LETTER TO STOCKHOLDERS