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FORM 10-K
25
2018. As of February 27, 2015, the Company had repurchased approximately 46.5 million shares of its common stock at an
aggregate cost of $4.2 billion under this program.
RESULTS OF OPERATIONS
The following table includes income statement data as a percentage of sales for the years ended December 31, 2014, 2013 and 2012:
For the Year Ended
December 31,
2014 2013 2012
Sales 100.0% 100.0% 100.0%
Cost of goods sold, including warehouse and distribution expenses 48.6 49.3 49.9
Gross profit 51.4 50.7 50.1
Selling, general and administrative expenses 33.8 34.1 34.3
Operating income 17.6 16.6 15.8
Interest expense (0.7) (0.7) (0.7)
Interest income — — 0.1
Income before income taxes 16.9 15.9 15.2
Provision for income taxes 6.1 5.8 5.7
Net income 10.8% 10.1% 9.5%
2014 Compared to 2013
Sales:
Sales for the year ended December 31, 2014, increased $567 million to $7.22 billion from $6.65 billion for the same period one year ago,
representing an increase of 9%. Comparable store sales for stores open at least one year increased 6.0% and 4.3% for the years ended
December 31, 2014 and 2013, 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, 2014 (in millions):
Increase in Sales for the Year
Ended December 31, 2014,
Compared to the Same Period
in 2013
Store sales:
Comparable store sales $ 389
Non-comparable store sales:
Sales for stores opened throughout 2013, excluding stores open at least one year that are included
in comparable store sales 90
Sales in 2013 for stores that have closed (4)
Sales for stores opened throughout 2014 85
Non-store sales:
Includes sales of machinery and sales to independent parts stores and Team Members 7
Total increase in sales $ 567
We believe the increased sales achieved by our stores are 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, 2014, was driven by increases in average ticket values and customer
transaction counts for both DIY and professional service provider customers. The improvements in average ticket values were the result