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FORM 10-K
RESULTS OF OPERATIONS
The following table includes income statement data as a percentage of sales for the years ended December 31, 2015, 2014 and 2013:
For the Year Ended
December 31,
2015 2014 2013
Sales 100.0% 100.0% 100.0%
Cost of goods sold, including warehouse and distribution expenses 47.7 48.6 49.3
Gross profit 52.3 51.4 50.7
Selling, general and administrative expenses 33.2 33.8 34.1
Operating income (1) 19.0 17.6 16.6
Interest expense (0.7) (0.7) (0.7)
Interest income — — —
Income before income taxes 18.3 16.9 15.9
Provision for income taxes 6.6 6.1 5.8
Net income 11.7% 10.8% 10.1%
(1) Each percentage of sales amount is computed independently and may not compute to presented totals.
2015 Compared to 2014
Sales:
Sales for the year ended December 31, 2015, increased $751 million to $7.97 billion from $7.22 billion for the same period one year ago,
representing an increase of 10%. Comparable store sales for stores open at least one year increased 7.5% and 6.0% for the years ended
December 31, 2015 and 2014, respectively. Comparable store sales are calculated based on the change in sales of stores open at least
one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members.
The following table presents the components of the increase in sales for the year ended December 31, 2015 (in millions):
Increase in Sales for the Year Ended
December 31, 2015,
Compared to the Same Period in 2014
Store sales:
Comparable store sales $ 531
Non-comparable store sales:
Sales for stores opened throughout 2014, excluding stores open at least one year that are
included in comparable store sales 117
Sales for stores opened throughout 2015 102
Sales in 2014 for stores that have closed (6)
Non-store sales:
Includes sales of machinery and sales to independent parts stores and Team Members 7
Total increase in sales $ 751
We believe the increased sales achieved by our stores were the result of store growth and the high levels of customer service provided
by our well-trained and technically proficient Team Members, superior inventory availability, including same day and over-night access
to inventory in our regional distribution centers, enhanced services and programs offered in our stores, a broader selection of product
offerings in most stores with a dynamic catalog system to identify and source parts, a targeted promotional and advertising effort through
a variety of media and localized promotional events, continued improvement in the merchandising and store layouts of our stores,
compensation programs for all store Team Members that provide incentives for performance and our continued focus on serving both
DIY and professional service provider customers.
Our comparable store sales increase for the year ended December 31, 2015, was driven by increases in average ticket values and customer
transaction counts for both our DIY and professional service provider customers. The improvement in average ticket values was the
result of the increasing complexity and cost of replacement parts necessary to maintain the current population of better engineered and
more technically advanced vehicles, and this improvement was without the benefit of an increase in the selling price of like kind items.