Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Jan. 02, 2021 | Feb. 17, 2021 | Jul. 10, 2020 | |
Cover [Abstract] | |||
Entity Central Index Key | 0001158449 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 2, 2021 | ||
Current Fiscal Year End Date | --01-02 | ||
Document Transition Report | false | ||
Entity File Number | 001-16797 | ||
Entity Registrant Name | ADVANCE AUTO PARTS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 54-2049910 | ||
Entity Address, Address Line One | 2635 East Millbrook Road | ||
Entity Address, City or Town | Raleigh | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27604 | ||
City Area Code | 540 | ||
Local Phone Number | 362-4911 | ||
Title of 12(b) Security | Common Stock, $0.0001 par value | ||
Trading Symbol | AAP | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 9,274,738,343 | ||
Entity Common Stock, Shares Outstanding | 65,524,420 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2021 Annual Meeting of Stockholders, to be held on May 26, 2021, are incorporated by reference into Part III of this Form 10-K. | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 834,992 | $ 418,665 |
Receivables, net | 749,999 | 689,469 |
Inventories | 4,538,199 | 4,432,168 |
Other current assets | 146,811 | 155,241 |
Total current assets | 6,270,001 | 5,695,543 |
Property and equipment, net of accumulated depreciation of $2,189,165 and $2,037,849 | 1,462,602 | 1,433,213 |
Operating lease right-of-use assets | 2,379,987 | 2,365,325 |
Goodwill | 993,590 | 992,240 |
Intangible assets, net | 681,127 | 709,756 |
Other assets | 52,329 | 52,448 |
Assets, Total | 11,839,636 | 11,248,525 |
Current liabilities: | ||
Accounts payable | 3,640,639 | 3,421,987 |
Accrued expenses | 606,804 | 535,863 |
Other current liabilities | 496,472 | 519,852 |
Total current liabilities | 4,743,915 | 4,477,702 |
Long-term debt | 1,032,984 | 747,320 |
Noncurrent operating lease liabilities | 2,014,499 | 2,017,159 |
Deferred income taxes | 342,445 | 334,013 |
Other long-term liabilities | 146,281 | 123,250 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Preferred stock, nonvoting, $0.0001 par value, 10,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, voting, $0.0001 par value, 200,000 shares authorized; 76,305 shares issued and 66,361 outstanding at January 2, 2021 and 76,051 shares issued and 69,232 outstanding at December 28, 2019 | 8 | 8 |
Additional paid-in capital | 783,709 | 735,183 |
Treasury stock, at cost, 9,944 and 6,819 shares | (1,394,080) | (924,389) |
Accumulated other comprehensive loss | (26,759) | (34,569) |
Retained earnings | 4,196,634 | 3,772,848 |
Total stockholders' equity | 3,559,512 | 3,549,081 |
Liabilities and Stockholders' Equity, Total | $ 11,839,636 | $ 11,248,525 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Accumulated depreciation | $ 2,189,165 | $ 2,037,849 |
Preferred stock, non-voting, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common stock, voting, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (shares) | 200,000,000 | 200,000,000 |
Common stock issued (shares) | 76,305,000 | 76,051,000 |
Common stock outstanding (shares) | 66,361,000 | 69,232,000 |
Treasury stock (shares) | 9,944,000 | 6,819,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Net sales | $ 10,106,321 | $ 9,709,003 | $ 9,580,554 |
Cost of sales, including purchasing and warehousing costs | 5,624,707 | 5,454,257 | 5,361,141 |
Gross profit | 4,481,614 | 4,254,746 | 4,219,413 |
Selling, general and administrative expenses | 3,731,707 | 3,577,566 | 3,615,138 |
Operating income | 749,907 | 677,180 | 604,275 |
Other, net: | |||
Interest expense | (46,886) | (39,898) | (56,588) |
Loss on early redemptions of senior unsecured notes | (48,022) | (10,756) | 0 |
Other income, net | (3,984) | 11,220 | 7,577 |
Total other, net | (98,892) | (39,434) | (49,011) |
Income before provision for income taxes | 651,015 | 637,746 | 555,264 |
Provision for income taxes | 157,994 | 150,850 | 131,417 |
Net income | $ 493,021 | $ 486,896 | $ 423,847 |
Basic earnings per common share (in usd per share) | $ 7.17 | $ 6.87 | $ 5.75 |
Weighted average common shares outstanding | 68,748 | 70,869 | 73,728 |
Diluted earnings per common share (in usd per share) | $ 7.14 | $ 6.84 | $ 5.73 |
Weighted average common shares outstanding | 69,003 | 71,165 | 73,991 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Net income | $ 493,021 | $ 486,896 | $ 423,847 |
Other comprehensive income (loss): | |||
Changes in net unrecognized other postretirement benefit costs, net of tax of $54, $67 and $103 | (152) | (142) | (294) |
Currency translation adjustments | 7,962 | 9,766 | (18,945) |
Total other comprehensive income (loss) | 7,810 | 9,624 | (19,239) |
Comprehensive income | $ 500,831 | $ 496,520 | $ 404,608 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Changes in net unrecognized other postretirement benefit costs, tax | $ 54 | $ 67 | $ 103 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative effect of accounting change from adoption of ASU 2016-02 | Common Stock | Additional Paid-In Capital | Treasury Stock, at cost | Accumulated Other Comprehensive Loss | Retained Earnings | Retained EarningsCumulative effect of accounting change from adoption of ASU 2016-02 |
Balance at Dec. 30, 2017 | $ 3,415,196 | $ 8 | $ 664,646 | $ (144,600) | $ (24,954) | $ 2,920,096 | ||
Balance (in shares) at Dec. 30, 2017 | 73,936 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 423,847 | 423,847 | ||||||
Total other comprehensive income (loss) | (19,239) | (19,239) | ||||||
Restricted stock, restricted stock units and deferred stock units vested | 0 | |||||||
Restricted stock, restricted stock units and deferred stock units vested (in shares) | 215 | |||||||
Share-based compensation | 27,760 | 27,760 | ||||||
Stock issued under employee stock purchase plan | 3,200 | 3,200 | ||||||
Stock issued under employee stock purchase plan (in shares) | 36 | |||||||
Repurchase of common stock | (281,354) | (281,354) | ||||||
Repurchase of common stock (in shares) | (1,738) | |||||||
Cash dividends declared | (17,788) | (17,788) | ||||||
Other (in shares) | 11 | |||||||
Other | (809) | (809) | ||||||
Balance at Dec. 29, 2018 | $ 3,550,813 | $ (23,165) | $ 8 | 694,797 | (425,954) | (44,193) | 3,326,155 | $ (23,165) |
Balance (in shares) at Dec. 29, 2018 | 72,460 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | |||||||
Net income | $ 486,896 | 486,896 | ||||||
Total other comprehensive income (loss) | 9,624 | 9,624 | ||||||
Restricted stock, restricted stock units and deferred stock units vested | 0 | |||||||
Restricted stock, restricted stock units and deferred stock units vested (in shares) | 192 | |||||||
Share-based compensation | 37,438 | 37,438 | ||||||
Stock issued under employee stock purchase plan | 3,334 | 3,334 | ||||||
Stock issued under employee stock purchase plan (in shares) | 23 | |||||||
Repurchase of common stock | (498,435) | (498,435) | ||||||
Repurchase of common stock (in shares) | (3,448) | |||||||
Cash dividends declared | (17,038) | (17,038) | ||||||
Other (in shares) | 5 | |||||||
Other | (386) | (386) | ||||||
Balance at Dec. 28, 2019 | $ 3,549,081 | $ 8 | 735,183 | (924,389) | (34,569) | 3,772,848 | ||
Balance (in shares) at Dec. 28, 2019 | 69,232 | 69,232 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | $ 493,021 | 493,021 | ||||||
Total other comprehensive income (loss) | 7,810 | 7,810 | ||||||
Restricted stock, restricted stock units and deferred stock units vested | 0 | |||||||
Restricted stock, restricted stock units and deferred stock units vested (in shares) | 234 | |||||||
Share-based compensation | 45,271 | 45,271 | ||||||
Stock issued under employee stock purchase plan | 3,270 | 3,270 | ||||||
Stock issued under employee stock purchase plan (in shares) | 20 | |||||||
Repurchase of common stock | (469,691) | (469,691) | ||||||
Repurchase of common stock (in shares) | (3,125) | |||||||
Cash dividends declared | (69,235) | (69,235) | ||||||
Other (in shares) | 0 | |||||||
Other | (15) | (15) | ||||||
Balance at Jan. 02, 2021 | $ 3,559,512 | $ 8 | $ 783,709 | $ (1,394,080) | $ (26,759) | $ 4,196,634 | ||
Balance (in shares) at Jan. 02, 2021 | 66,361 | 66,361 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per common share | $ 1 | $ 0.24 | $ 0.24 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 493,021 | $ 486,896 | $ 423,847 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 250,081 | 238,371 | 238,184 |
Share-based compensation | 45,271 | 37,438 | 27,760 |
Loss and impairment of long-lived assets | 4,727 | 6,671 | 15,956 |
Loss on early redemption of senior unsecured notes | 48,022 | 10,756 | 0 |
Other, net | 1,467 | 1,681 | 2,195 |
Provision for deferred income taxes | 8,136 | 23,148 | 15,956 |
Net change in: | |||
Receivables, net | (59,014) | (62,837) | (21,471) |
Inventories | (101,449) | (63,130) | (206,125) |
Accounts payable | 216,488 | 245,785 | 285,493 |
Accrued expenses | 78,507 | (72,288) | 93,940 |
Other assets and liabilities, net | (15,569) | 14,418 | (64,707) |
Net cash provided by operating activities | 969,688 | 866,909 | 811,028 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (267,576) | (270,129) | (193,715) |
Purchase of an indefinite-lived intangible asset | (230) | (201,519) | 0 |
Proceeds from sales of property and equipment | 909 | 8,709 | 1,888 |
Other, net | 0 | 0 | 0 |
Net cash used in investing activities | (266,897) | (462,939) | (191,827) |
Cash flows from financing activities: | |||
(Decrease) increase in bank overdrafts | 0 | (59,339) | 32,014 |
Redemption of senior unsecured note | (602,568) | (310,047) | 0 |
Borrowings under credit facilities | 500,000 | 0 | 0 |
Payments on credit facilities | (500,000) | 0 | 0 |
Proceeds from issuance of senior unsecured notes, net | 847,092 | 0 | 0 |
Dividends paid | (56,347) | (17,185) | (17,819) |
Proceeds from the issuance of common stock | 3,270 | 3,334 | 3,200 |
Repurchases of common stock | (469,691) | (498,435) | (281,354) |
Other, net | (7,753) | (481) | 44 |
Net cash used in financing activities | (285,997) | (882,153) | (263,915) |
Effect of exchange rate changes on cash | (467) | 321 | (5,696) |
Net increase (decrease) in cash and cash equivalents | 416,327 | (477,862) | 349,590 |
Cash and cash equivalents, beginning of period | 418,665 | 896,527 | 546,937 |
Cash and cash equivalents, end of period | 834,992 | 418,665 | 896,527 |
Supplemental cash flow information: | |||
Interest paid | 34,011 | 41,099 | 45,322 |
Income tax payments | 146,073 | 108,163 | 143,213 |
Non-cash transactions: | |||
Accrued purchases of property and equipment | $ 4,963 | $ 26,201 | $ 15,365 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Jan. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation: Description of Business Advance Auto Parts, Inc. and subsidiaries is a leading automotive aftermarket parts provider in North America, serving both professional installers (“Professional”) and “do-it-yourself” (“DIY”) customers. The accompanying consolidated financial statements have been prepared by us and include the accounts of Advance Auto Parts, Inc., including, its wholly owned subsidiaries, Advance Stores Company, Incorporated (“Advance Stores”) and Neuse River Insurance Company, Inc., and their subsidiaries (collectively referred to as “Advance,” “we,” “us,” or “our”). As of January 2, 2021, our operations are comprised of 4,806 stores and 170 branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. Our stores operate primarily under the trade names “Advance Auto Parts,” “Carquest” and “Autopart International,” and our branches operate under the “Worldpac” trade name. In addition, we served 1,277 independently owned Carquest branded stores across the same geographic locations served by our stores and branches in addition to Mexico, Grand Cayman, the Bahamas, Turks and Caicos and British Virgin Islands. In March 2020, the World Health Organization categorized the COVID-19 outbreak as a pandemic. As a majority of our stores and facilities have remained open, we have taken additional measures to help protect the health and safety of our Team Members and customers. Such measures, among others, include the implementation of other labor-related benefits for Team Members and increased sanitation practices across Advance. Since the assumptions underpinning our long-term revenue and cash flow growth rates, operating models and business strategies have not been significantly impacted, there was no material impairment of our various assets during the fifty-three weeks ended January 2, 2021. The COVID-19 pandemic remains an evolving situation. If a period of decreased demand were to reoccur, it may lead to increased asset recovery and valuation risks in the future, such as impairment of goodwill, intangible assets and store and other assets. We will continue to assess the impact of the pandemic on our financial position. The extent to which the COVID-19 pandemic will impact our operations, liquidity, compliance with debt covenants or financial results in subsequent periods is uncertain, but such impact could be material. Accounting Period Our fiscal year ends on the Saturday nearest the end of December. All references herein for the years “2020,” “2019” and “2018” represent the fiscal year ended January 2, 2021, which consist of 53 weeks, and fiscal years ended December 28, 2019 and December 29, 2018, which both had 52 weeks. Basis of Presentation The consolidated financial statements include the accounts of Advance and its wholly owned subsidiaries prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the prior years’ consolidated statements of changes in stockholders’ equity and statements of cash flows have been reclassified to conform to the current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies: Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and money market funds with original maturities of three months or less. Also, included in cash equivalents are credit card and debit card receivables from banks, which generally settle in less than four business days. Inventory Our inventory consists primarily of parts, batteries, accessories and other products used on vehicles that have reasonably long shelf lives and is stated at the lower of cost or market. The cost of our merchandise inventory is primarily determined using the last-in, first-out (“LIFO”) method. Under the LIFO method, our cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs relating to prices paid in 2020 and prior years. We regularly review inventory quantities on-hand, consider whether we may have excess inventory based on our current approach for managing slower moving inventory and adjust the carrying value as necessary. Vendor Incentives We receive incentives in the form of reductions to amounts owed to and/or payments from vendors related to volume rebates and other promotional considerations. Many of these incentives are under long-term agreements in excess of one year, while others are negotiated on an annual basis or shorter. Advertising allowances provided as a reimbursement of specific, incremental and identifiable costs incurred to promote a vendor’s products are included as an offset to selling, general and administrative expenses (“SG&A”) when the cost is incurred. Volume rebates and allowances that do not meet the requirements for offsetting in SG&A are recorded as a reduction to inventory as they are earned based on inventory purchases. Total deferred vendor incentives recorded as a reduction of Inventories were $141.9 million and $173.8 million as of January 2, 2021 and December 28, 2019. We recognize other promotional incentives earned under long-term agreements not specifically related to volume of purchases as a reduction to cost of sales. However, these incentives are not deferred as a reduction of inventory and are recognized based on the cumulative net purchases as a percentage of total estimated net purchases over the life of the agreement. Short-term incentives with terms less than one year are generally recognized as a reduction to cost of sales over the duration of the agreements. Amounts received or receivable from vendors that are not yet earned are reflected as deferred revenue in the accompanying consolidated balance sheets. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged directly to expense when incurred; major improvements are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the account balances, with any gain or loss reflected in the consolidated statements of operations. Depreciation of land improvements, buildings, furniture, fixtures and equipment and vehicles is provided over the estimated useful lives of the respective assets using the straight-line method. Depreciation of building and leasehold improvements is provided over the shorter of the original useful lives of the respective assets or the term of the lease using the straight-line method. Goodwill and Indefinite-Lived Intangible Assets We perform our evaluation for the impairment of goodwill and indefinite-lived intangible assets for our reporting units annually as of the first day of the fourth quarter, or when indications of potential impairment exist. These indicators would include a significant change in operating performance, the business climate, legal factors, competition, or a planned sale or disposition of a significant portion of the business, among other factors. We assess qualitative factors such as current company performance and overall economic factors to determine if it is more-likely-than-not that the goodwill might be impaired and whether it is necessary to perform a quantitative goodwill impairment test. In the quantitative goodwill test, we compare the carrying value of a reporting unit to its fair value. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the reporting unit's fair value. Our indefinite-lived intangible assets are tested for impairment at the asset group level. Indefinite-lived intangibles are evaluated by comparing the carrying amount of the asset to the future discounted cash flows that the asset is expected to generate. If the fair value based on the future discounted cash flows exceeds the carrying value, we conclude that no intangible asset impairment has occurred. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, we recognize an impairment loss. We have five operating segments, defined as “Northern Division,” “Southern Division,” “Carquest Canada,” “Independents” and “Worldpac.” As each operating segment represents a reporting unit, goodwill is assigned to each reporting unit. Valuation of Long-Lived Assets We evaluate the recoverability of our long-lived assets, including finite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable and exceeds its fair value. When such an event occurs, we estimate the undiscounted future cash flows expected to result from the use of the long-lived asset or asset group and its eventual disposition. These impairment evaluations involve estimates of asset useful lives and future cash flows. If the undiscounted expected future cash flows are less than the carrying amount of the asset and the carrying amount of the asset exceeds its fair value, an impairment loss is recognized. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis). Self-Insurance We are self-insured for general and automobile liability, workers’ compensation and health care claims of its employees, or Team Members, while maintaining stop-loss coverage with third-party insurers to limit its total liability exposure. Expenses associated with these liabilities are calculated for (i) claims filed, (ii) claims incurred but not yet reported and (iii) projected future claims using actuarial methods followed in the insurance industry as well as our historical claims experience. We include the current and long-term portions of its self-insurance reserves in Accrued expenses and Other long-term liabilities in the accompanying consolidated balance sheets. Warranty Liabilities The warranty obligation on the majority of merchandise sold by us with a manufacturer’s warranty is the responsibility of our vendors. However, we have an obligation to provide customers replacement of certain merchandise at no cost or merchandise at a prorated cost if under a warranty and not covered by the manufacturer. As of January 2, 2021 and December 28, 2019, our warranty liability primarily consisted of batteries with warranty coverage sold by us. We estimate our warranty obligation at the time of sale based on the historical return experience, sales level and cost of the respective product sold. To the extent vendors provide upfront allowances in lieu of accepting the obligation for warranty claims and the allowance is in excess of the related warranty expense, the excess is recorded as a reduction to cost of sales. Leases We lease certain store locations, distribution centers, office spaces, equipment and vehicles. We recognize lease expense on a straight-line basis over the initial term of the lease unless external economic factors exist such that renewals are reasonably certain. In those instances, the renewal period would be included in the lease term to determine the period in which to recognize the lease expense. Most leases require us to pay taxes, maintenance, insurance and other certain costs applicable to the leased premises. Effective December 30, 2018, we adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), using the alternative transition method provided in ASU 2018-11, Leases (Topic 842): Targeted Improvements . Using the alternative transition method, we applied the transition requirements at the effective date of ASU 2016-02 with the impact of initially applying ASU 2016-02 recognized as a cumulative-effect adjustment to retained earnings in the first quarter of 2019. We elected the package of practical expedients permitted under the transition guidance within the new standard. In addition, as a practical expedient relating to our store locations, distribution centers, office spaces and vehicle leases, we elected not to separate lease components from nonlease components. The adoption of ASU 2016-02 resulted in the recording of operating lease assets and lease liabilities of $2.4 billion as of December 30, 2018. At the date of adoption, there was a difference between the operating lease right-of-use assets and lease liabilities recorded that included an adjustment to retained earnings, net of a $7.9 million deferred tax impact, which primarily resulted from the impairment of operating lease right-of-use assets. For 2019, the adoption of the new standard did not have a material impact on our condensed consolidated statements of operations and condensed consolidated statements of cash flows as substantially all of our leases are operating in nature. Fair Value Measurements A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. These two types of inputs create the following fair value hierarchy: Level 1 - Quoted prices for identical instruments in active markets; Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose significant inputs are observable; and Level 3 - Instruments whose significant inputs are unobservable. Financial instruments are transferred in and/or out of Level 1, 2 or 3 at the beginning of the accounting period in which there is a change in the valuation inputs. Share-Based Payments We provide share-based compensation to our eligible Team Members and Board of Directors. We are required to exercise judgment and make estimates when determining the (i) fair value of each award granted and (ii) projected number of awards expected to vest. We calculate the fair value of all share-based awards at the date of grant and use the straight-line method to amortize this fair value as compensation cost over the requisite service period. Revenues Effective December 31, 2017, we adopted ASC 606, Revenue From Contracts With Customers (Topic 606) (“ASC 606”). The results of applying Topic 606 using the modified retrospective approach were insignificant and did not have a material impact on our consolidated financial condition, results of operations, cash flows, business process, controls or systems. ASC 606 defines a performance obligation as a promise in a contract to transfer a distinct good or service to the customer and is considered the unit of account. The majority of our contracts have one single performance obligation as the promise to transfer the individual goods is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Discounts and incentives are treated as separate performance obligations. We allocate the contract’s transaction price to each of these performance obligations separately using explicitly stated amounts or our best estimate using historical data. Additionally, we estimate and record gift card breakage as redemptions occur. In accordance with ASC 606 revenue is recognized at the time the sale is made, at which time our walk-in customers take immediate possession of the merchandise or same-day delivery is made to our Professional delivery customers, which include certain independently-owned store locations. Payment terms are established for our Professional delivery customers based on pre-established credit requirements. Payment terms vary depending on the customer and generally range from 1 to 30 days. Based on the nature of receivables, no significant financing components exist. For e-commerce sales, revenue is recognized either at the time of pick-up at one of our store locations or at the time of shipment depending on the customer's order designation. Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. We estimate the reduction to Net sales and Cost of sales for returns based on current sales levels and our historical return experience. We provide assurance type warranty coverage primarily on batteries, brakes and struts whereby we are required to provide replacement product at no cost or a reduced cost for a set period of time. The following table summarizes financial information for each of our product groups. Year Ended January 2, 2021 December 28, 2019 December 29, 2018 Percentage of Sales, by Product Group Parts and Batteries 66 % 67 % 66 % Accessories and Chemicals 21 21 20 Engine Maintenance 12 11 13 Other 1 1 1 Total 100 % 100 % 100 % Receivables, net consist primarily of receivables from Professional customers. We grant credit to certain Professional customers who meet our pre-established credit requirements. Accounts receivable is stated at net realizable value. We regularly review accounts receivable balances and maintains allowances for doubtful accounts for estimated losses whenever events or circumstances indicate the carrying value may not be recoverable. We consider the following factors when determining if collection is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic and industry trends and changes in customer payment terms. We control credit risk through credit approvals, credit limits and accounts receivable and credit monitoring procedures. Cost of Sales Cost of sales includes actual product cost, warranty costs, vendor incentives, cash discounts on payments to vendors, costs associated with operating our distribution network, including payroll and benefits costs, occupancy costs and depreciation, in-bound freight-related costs from our vendors, impairment of inventory resulting from store closures and costs associated with moving merchandise inventories from our distribution centers to stores, branch locations and customers. Selling, General and Administrative Expenses SG&A includes payroll and benefits costs for store and corporate Team Members, occupancy costs of store and corporate facilities, depreciation and amortization related to store and corporate assets, share-based compensation expense, advertising, self-insurance, costs of consolidating, converting or closing facilities, including early termination of lease obligations, severance and impairment charges, professional services and costs associated with our Professional delivery program, including payroll and benefit costs, and transportation expenses associated with moving merchandise inventories from stores and branches to customer locations. Advertising Costs We expense advertising costs as incurred. Advertising expense, net of qualifying vendor promotional funds, was $132.3 million, $117.3 million and $120.9 million in 2020, 2019 and 2018. Vendor promotional funds, which reduced advertising expense, amounted to $48.5 million and $45.7 million and $26.9 million in 2020, 2019 and 2018. Foreign Currency Translation The assets and liabilities of our foreign operations are translated into U.S. dollars at current exchange rates, and revenues, expenses and cash flows are translated at average exchange rates for the year. Resulting translation adjustments are reflected as a separate component in the consolidated statements of comprehensive income. Losses from foreign currency transactions, which are included in Other income, net, were $6.9 million, 1.7 million and 5.0 million in 2020, 2019 and 2018. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under the asset and liability method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income taxes reflect the net income tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and for income tax reporting purposes. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We recognize tax benefits and/or tax liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts as we must determine the probability of various possible outcomes. We reevaluate these uncertain tax positions on a quarterly basis or when new information becomes available to management. The reevaluations are based on many factors, including but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit, expirations due to statutes of limitations and new federal or state audit activity. Any change in either our recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual. Earnings per Share Basic earnings per share of common stock has been computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by including the effect of dilutive securities. Diluted earnings per share of common stock reflects the weighted-average number of shares of common stock outstanding, outstanding deferred stock units and the impact of outstanding stock options and stock appreciation rights (collectively “share-based awards”). Share-based awards containing performance conditions are included in the dilution impact as those conditions are met. Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. Our CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by information about our five operating segments, for purposes of allocating resources and evaluating financial performance. We have one reportable segment as the five operating segments are aggregated due primarily to the economic and operational similarities of each operating segment as the stores and branches have similar characteristics, including the nature of the products and services, customer base and the methods used to distribute products and provide service to its customers. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes. This ASU will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. We expect the adoption of this new standard to have an insignificant impact on our consolidated financial condition, results of operations or cash flows. During the first quarter of 2020, we adopted Financial Accounting Standard Board (“FASB”) Accounting Standards Update 2016-13 (“ASU 2016-13”), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which required us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaced the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements. During the second quarter of 2020, we early adopted the SEC’s, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities rules, which simplify the disclosure requirements related to the Company’s registered securities under Rule 3-10 of Regulation S-X. The final rule also allows for the simplified disclosure to be included within Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Inventories
Inventories | 12 Months Ended |
Jan. 02, 2021 | |
Inventory, Net [Abstract] | |
Inventories | Inventories: We used the LIFO method of accounting for approximately 88.3% of Inventories at January 2, 2021 and December 28, 2019. As a result of changes in the LIFO reserve, we recorded a reduction to Cost of sales of $13.8 million in 2020, an increase to Cost of sales of $101.3 million in 2019 and a reduction to cost of sales of $39.8 million in 2018. Purchasing and warehousing costs included in Inventories as of January 2, 2021 and December 28, 2019, were $464.7 million and $476.3 million. Inventory balances were as follows: (in thousands) January 2, 2021 December 28, 2019 Inventories at first in, first out (“FIFO”) $ 4,382,779 $ 4,290,565 Adjustments to state inventories at LIFO 155,420 141,603 Inventories at LIFO $ 4,538,199 $ 4,432,168 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: Goodwill At January 2, 2021 and December 28, 2019, the carrying amount of Goodwill in the accompanying consolidated balance sheets was $993.6 million and $992.2 million. The change in goodwill during 2020 and 2019 was $1.4 million and $2.0 million related to foreign currency translation. Intangible Assets Other Than Goodwill On December 23, 2019, we purchased the DieHard ® brand for a cash purchase price of $200.0 million, exclusive of $1.5 million of capitalizable transaction costs. This purchase gives us the right to sell DieHard ® batteries and enables us to extend the DieHard ® brand into other automotive and vehicular categories. We granted the seller an exclusive royalty-free, perpetual license to develop, market, and sell DieHard ® branded products in non-automotive categories. We accounted for this transaction as a purchase of an indefinite-lived intangible asset, which is included within the Brands, trademarks and tradenames category below, and is not subject to amortization. Amortization expense was $31.6 million, $31.7 million and $40.7 million for 2020, 2019 and 2018. A summary of the composition of the gross carrying amounts and accumulated amortization of acquired intangible assets are presented in the following table: January 2, 2021 December 28, 2019 (in thousands) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets: Customer relationships $ 351,056 $ (209,440) $ 141,616 350,352 (179,220) $ 171,132 Non-compete and other 38,492 (37,632) 860 38,256 (37,318) 938 389,548 (247,072) 142,476 388,608 (216,538) 172,070 Indefinite-lived intangible assets: Brands, trademark and tradenames 538,651 — 538,651 537,686 — 537,686 Total intangible assets $ 928,199 $ (247,072) $ 681,127 $ 926,294 $ (216,538) $ 709,756 Future Amortization Expense The table below shows expected amortization expense for the next five years and thereafter for acquired intangible assets recorded as of January 2, 2021: Year Amount (in thousands) 2021 $ 30,227 2022 $ 30,131 2023 $ 27,243 2024 $ 27,421 2025 $ 27,370 Thereafter $ 84 $ 142,476 |
Receivables, net
Receivables, net | 12 Months Ended |
Jan. 02, 2021 | |
Receivables [Abstract] | |
Receivables, net | Receivables, net: Receivables, net consist of the following: (in thousands) January 2, 2021 December 28, 2019 Trade $ 449,403 $ 422,403 Vendor 278,180 249,009 Other 34,345 32,306 Total receivables 761,928 703,718 Less: allowance for doubtful accounts (11,929) (14,249) Receivables, net $ 749,999 $ 689,469 |
Long-term Debt and Fair Value o
Long-term Debt and Fair Value of Financial Instruments | 12 Months Ended |
Jan. 02, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Fair Value of Financial Instruments | Long-term Debt and Fair Value of Financial Instruments: Long-term debt consists of the following: (in thousands) January 2, 2021 December 28, 2019 4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $559 at December 28, 2019) due January 15, 2022 — 299,441 4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $683 and $2,121 at January 2, 2021 and December 28, 2019) due December 1, 2023 192,990 447,879 1.75% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $4,145 at January 02, 2021) due October 1, 2027 345,854 — 3.90% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $5,600 at January 2, 2021) due April 15, 2030 494,140 — Long-term debt, excluding current portion $ 1,032,984 $ 747,320 Fair value of long-term debt $ 1,145,000 $ 795,000 Fair Value of Financial Assets and Liabilities The fair value of our senior unsecured notes was determined using Level 2 inputs based on quoted market prices. We believe the carrying value of its other long-term debt approximates fair value. The carrying amounts of our cash and cash equivalents, receivables, accounts payable and accrued expenses approximate their fair values due to the relatively short-term nature of these instruments. Bank Debt On January 31, 2017, we entered into a new 5 year credit agreement that provides a $1.0 billion unsecured revolving credit facility (the “2017 Credit Agreement”) with Advance Stores, as Borrower, the lenders party thereto, and Bank of America, N.A., as the administrative agent and replaces a prior credit agreement entered into in 2013. The 2017 Credit Agreement provides for the issuance of letters of credit with a sublimit of $200.0 million. We may request that the total revolving commitment be increased by an amount not exceeding $250.0 million during the term of the 2017 Credit Agreement. Voluntary prepayments and voluntary reductions of the revolving loan balance, if any, are permitted in whole or in part, at our option, in minimum principal amounts as specified in the 2017 Credit Agreement. On January 31, 2018, we entered into Amendment No. 1 to the 2017 Credit Agreement (the “Amendment”), among Advance Stores, as Borrower, the lenders party thereto, and Bank of America, N.A., Administrative Agent. The Amendment: (i) provided for LIBOR replacement rates in the event that LIBOR is unavailable in the future; (ii) modified the definitions of the financial covenants (and the testing level relating thereto) with respect to a maximum leverage ratio and a minimum coverage ratio that we are required to comply with; and (iii) extended the termination date of the 2017 Credit Agreement from January 31, 2022 until January 31, 2023. We have the option to make one additional written request of the lenders to extend the termination date then in effect for one additional year. On January 10, 2019, we entered into Amendment No. 2 to the 2017 Credit Agreement (the “ Second Amendment”), among Advance Stores Company, Incorporated, as Borrower, Advance Auto Parts, Inc., as Parent, the banks, financial institutions and other institutional lenders parties thereto and Bank of America, N.A., as Administrative Agent. The Second Amendment: (i) added a new definition of "Insurance Subsidiary" to the 2017 Credit Agreement meaning each wholly owned subsidiary of Parent that is maintained as a special purpose self-insurance subsidiary and any of its subsidiaries; (ii) provided that an Insurance Subsidiary does not serve as a Guarantor of the 2017 Credit Agreement; and (iii) provided that Insurance Subsidiaries are permitted to incur intercompany indebtedness. Insurance Subsidiaries will not be required to serve as Guarantors of the Parent's senior unsecured notes so long as they are not guarantors of the 2017 Credit Agreement. As of January 2, 2021, we had no outstanding borrowings under 2017 Credit Agreement and borrowing availability was $1.0 billion. Under the 2017 Credit Agreement, we had no letters of credit outstanding as of January 2, 2021. Interest on any borrowings on the revolver will be based at our option, on an adjusted LIBOR, plus a margin, or an alternate base rate, plus a margin. After an initial interest period, we may elect to convert a particular borrowing to a different type. The initial margins per annum for the revolving loan ar e 1.10% for the adjusted LIBOR and 0.10% for alternate base rate borrowings. A facility fee of 0.15% per annum is charged on the total revolving facility commitment, payable quarterly in arrears. Under the terms of the 2017 Credit Agreement, the interest rate spread and facility fee are based on our credit rating. The interest rate spread ranges from 0.91% to 1.50% for adjusted LIBOR borrowings and 0.00% to 0.50% for alternate base rate borrowings. The 2017 Credit Agreement contains customary covenants restricting the ability of: (a) Advance Stores and its subsidiaries to, among other things, (i) create, incur or assume additional debt (only with respect to subsidiaries of Advance Stores), (ii) incur liens, (iii) guarantee obligations, and (iv) change the nature of its business conducted by itself and its subsidiaries; (b) Advance, Advance Stores and their subsidiaries to, among other things (i) enter into certain hedging arrangements, (ii) enter into restrictive agreements limiting their ability to incur liens on any of their property or assets, pay distributions, repay loans, or guarantee indebtedness of their subsidiaries; and (c) Advance, among other things, to change the holding company status of Advance. Advance Stores is required to comply with financial covenants with respect to a maximum leverage ratio and a minimum coverage ratio. The 2017 Credit Agreement also provides for customary events of default, including non-payment defaults, covenant defaults and cross-defaults of Advance Stores’ other material indebtedness. We were in compliance with our financial covenants with respect to the 2017 Credit Agreement as of January 2, 2021. As of January 2, 2021 and December 28, 2019, we had $100.0 million and $111.6 million of bilateral letters of credit issued separately from the 2017 Credit Agreement, none of which were drawn upon. These bilateral letters of credit generally have a term of one year or less and primarily serve as collateral for our self-insurance policies. Senior Unsecured Notes Our 4.50% senior unsecured notes due January 15, 2022 (the “2022 Notes”) were issued in January 2012 at 99.97% of the principal amount of $300.0 million. The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and July 15 of each year. Our 4.50% senior unsecured notes due December 1, 2023 (the “2023 Notes”) were issued in December 2013 at 99.69% of the principal amount of $450.0 million. The 2023 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on June 1 and December 1 of each year. On April 16, 2020, we issued $500.0 million aggregate principal amount of senior unsecured notes (the “Original Notes”). The Original Notes were issued at 99.65% of the principal amount of $500.0 million, are due April 15, 2030 and bear interest at 3.90% per year payable semi-annually in arrears on April 15 and October 15 of each year (collectively with the 2023 Notes and 2027 Notes, referred to as our “senior unsecured notes”). During the second quarter of 2020, we commenced an exchange offer to exchange the Original Notes in the aggregate principal amount of $500.0 million, which were not registered under the Securities Act of 1933, as amended (the “Securities Act”), for a like principal amount of 3.90% senior unsecured notes due 2030 (the “Exchange Notes” or “2030 Notes”), which have been registered under the Securities Act. The Original Notes were substantially identical to the Exchange Notes, except that the Exchange Notes are registered under the Securities Act and are not subject to the transfer restrictions and certain registration rights agreement provisions applicable to the Original Notes. On July 28, 2020, the Original Notes were successfully exchanged for the Exchange Notes. On September 16, 2020, we redeemed all $300.0 million aggregate principal amount of our outstanding 2022 Notes. In connection with this early redemption, we incurred charges relating to a make-whole provision and debt issuance costs of $15.8 million and $0.3 million. On September 29, 2020, we issued $350.0 million aggregate principal amount of senior unsecured notes (the “2027 Notes”). The 2027 Notes were issued at 99.67% of the principal amount of $350.0 million, are due October 1, 2027 and bear interest at 1.75% per year payable semi-annually in arrears on April 1 and October 1 of each year. In connection with the 2027 Notes offering, we incurred $2.9 million of debt issuance costs. Pursuant to a cash tender offer that was completed on September 29, 2020, we repurchased $256.3 million of our 2023 Notes with the net proceeds from the 2027 Notes. In connection with this tender offer, we incurred charges relating to tender premiums and debt issuance costs of $30.5 million and $1.4 million . The terms of the senior unsecured notes are governed by an indenture (as amended, supplemented, waived or otherwise modified, the “Indenture”) among Advance, the subsidiary guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee. We may redeem some or all of the senior unsecured notes at any time or from time to time, at the redemption price described in the Indenture. In addition, in the event of a Change of Control Triggering Event (as defined in the Indenture for the senior unsecured notes), we will be required to offer to repurchase the senior unsecured notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the repurchase date. The senior unsecured notes are currently fully and unconditionally guaranteed, jointly and severally, on an unsubordinated and unsecured basis by each of the subsidiary guarantors. We will be permitted to release guarantees without the consent of holders of the senior unsecured notes under the circumstances described in the Indenture: (i) upon the release of the guarantee of our other debt that resulted in the affected subsidiary becoming a guarantor of this debt; (ii) upon the sale or other disposition of all or substantially all of the stock or assets of the subsidiary guarantor; or (iii) upon our exercise of our legal or covenant defeasance option. The Indenture contains customary provisions for events of default including for: (i) failure to pay principal or interest when due and payable; (ii) failure to comply with covenants or agreements in the Indenture or the Notes and failure to cure or obtain a waiver of such default upon notice; (iii) a default under any debt for money borrowed by us or any of our subsidiaries that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25.0 million without such debt having been discharged or acceleration having been rescinded or annulled within 10 days after receipt by us of notice of the default by the Trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding; and (iv) events of bankruptcy, insolvency or reorganization affecting us and certain of its subsidiaries. In the case of an event of default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated. The Indenture also contains covenants limiting the ability of us and our subsidiaries to incur debt secured by liens and to enter into sale and lease-back transactions. Future Payments As of January 2, 2021, the aggregate future annual maturities of long-term debt instruments are as follows: Amount (in thousands) 2021 $ — 2022 — 2023 193,673 2024 — 2025 — Thereafter 850,000 $ 1,043,673 Debt Guarantees We are a guarantor of loans made by banks to various independently owned Carquest-branded stores that are customers of ours totaling $23.6 million as of January 2, 2021. These loans are collateralized by security agreements on merchandise inventory and other assets of the borrowers. The approximate value of the inventory collateralized by these agreements is $57.5 million as of January 2, 2021. We believe that the likelihood of performance under these guarantees is remote. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 02, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property And Equipment | Property and Equipment: Property and equipment consists of the following: (in thousands) January 2, 2021 December 28, 2019 Land and land improvements 0 - 10 years $ 469,640 $ 457,960 Buildings 30 - 40 years 514,199 498,871 Building and leasehold improvements 1 - 15 years 560,070 535,082 Furniture, fixtures and equipment 2 - 20 years 1,969,011 1,850,485 Vehicles 8 years 14,574 14,612 Construction in progress 124,273 114,052 3,651,767 3,471,062 Less - Accumulated depreciation (2,189,165) (2,037,849) Property and equipment, net $ 1,462,602 $ 1,433,213 Depreciation expense relating to Property and equipment was $218.5 million, $206.7 million and $201.6 million for 2020, 2019 and 2018. We capitalized $58.4 million, $29.1 million and $13.0 million incurred for the development of internal use computer software during 2020, 2019 and 2018. These costs are currently classified in the Construction in progress category above, but once placed into service within the Furniture, fixtures equipment category, these costs will be depreciated on the straight-line method over 3 to 10 years. In 2020, 2019 and 2018 we recognized impairment losses of $0.2 million, $2.3 million and $13.4 million, primarily on store and corporate assets. |
Leases and Other Commitments
Leases and Other Commitments | 12 Months Ended |
Jan. 02, 2021 | |
Leases and Other Commitments [Abstract] | |
Leases and Other Commitments | Leases and Other Commitments: Leases Substantially all of our leases are for facilities and vehicles. The initial term for facilities are typically 5 years to 10 years, with renewal options at 5 year intervals, with the exercise of lease renewal options at our sole discretion. Our vehicle and equipment leases are typically 3 years to 6 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease liabilities consist of the following: (in thousands) January 2, 2021 December 28, 2019 Total operating lease liabilities $ 2,477,087 $ 2,495,141 Less: Current portion of operating lease liabilities (462,588) (477,982) Noncurrent operating lease liabilities $ 2,014,499 $ 2,017,159 The current portion of operating lease liabilities is included in Other current liabilities in the accompanying condensed consolidated balance sheet. Total lease cost is included in Cost of sales and SG&A in the accompanying condensed consolidated statements of operations and is recorded net of immaterial sublease income. Total lease cost is comprised of the following: Year Ended (in thousands) January 2, 2021 December 28, 2019 Operating lease cost $ 526,005 $ 522,928 Variable lease cost 142,546 155,892 Total lease cost $ 668,551 $ 678,820 The future maturity of lease liabilities are as follows: Year Amount (in thousands) 2021 $ 539,068 2022 455,024 2023 417,127 2024 338,564 2025 290,466 Thereafter 791,056 Total lease payments 2,831,305 Less: Imputed interest (354,218) Total operating lease liabilities $ 2,477,087 Operating lease payments include $97.1 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $50.6 million of legally binding lease payments for leases signed, but not yet commenced. The weighted-average remaining lease term and weighted-average discount rate for our operating leases ar e 7.0 years and 3.6% as of January 2, 2021. We calculated the weighted-average discount rates using incremental borrowing rates, which equal the rates of interest that we would pay to borrow funds on a fully collateralized basis over a similar term. Other information relating to our lease liabilities is as follows: Year Ended (in thousands) January 2, 2021 December 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 575,186 $ 517,945 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 424,393 $ 398,510 Other Commitments We have entered into certain arrangements which require the future purchase of goods or services. Our obligations primarily consist of payments for the purchase of hardware, software and maintenance. As of January 2, 2021, future payments amount to $122.8 million and are not accrued in our consolidated balance sheet. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Jan. 02, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses: Accrued expenses consist of the following: (in thousands) January 2, 2021 December 28, 2019 Payroll and related benefits $ 154,388 $ 109,371 Taxes payable 100,487 96,834 Self-insurance reserves 63,990 64,845 Warranty reserves 14,120 36,820 Capital expenditures 4,963 26,201 Accrued rebates 26,096 24,532 Accrued interest 8,441 10,241 Other 234,319 167,019 Total accrued expenses $ 606,804 $ 535,863 The following table presents changes in our warranty reserves: Year Ended (in thousands) January 2, 2021 December 28, 2019 December 29, 2018 Warranty reserve, beginning of period $ 36,820 $ 45,280 $ 49,024 Additions to reserve 14,907 34,117 43,200 Reduction and utilization of reserve (37,607) (42,577) (46,944) Warranty reserve, end of period $ 14,120 $ 36,820 $ 45,280 |
Share Repurchase Program
Share Repurchase Program | 12 Months Ended |
Jan. 02, 2021 | |
Share Repurchase Program [Abstract] | |
Share Repurchase Program | . Share Repurchase Program: On November 8, 2019, our Board of Directors authorized a $700.0 million share repurchase program. This new authorization was in addition to the $400.0 million share repurchase program that was authorized by our Board of Directors in August 2019. Our share repurchase program permits the repurchase of our common stock on the open market and in privately negotiated transactions from time to time. Our share repurchase program allows us to repurchase our common stock on the open market or in privately negotiated transactions from time to time. During 2020, we repurchased 3.0 million shares of our common stock at an aggregate cost of $458.5 million, or an average price of $150.65 per share, in connection with our share repurchase program. We had $432.2 million remaining under our share repurchase program as of January 2, 2021. During 2019, we repurchased 3.4 million shares of our common stock at an aggregate cost of $487.4 million, or an average price of $144.23 per share, under our share repurchase program. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Jan. 02, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share: The computation of basic and diluted earnings per share is as follows: Year Ended (in thousands, except per share data) January 2, 2021 December 28, 2019 December 29, 2018 Numerator Net income applicable to common shares $ 493,021 $ 486,896 $ 423,847 Denominator Basic weighted average common shares 68,748 70,869 73,728 Dilutive impact of share-based awards 255 296 263 Diluted weighted average common shares (1) 69,003 71,165 73,991 Basic earnings per common share $ 7.17 $ 6.87 $ 5.75 Diluted earnings per common share $ 7.14 $ 6.84 $ 5.73 (1) For the fifty-three weeks ended January 2, 2021 119 thousand restricted stock units (“RSUs”) were excluded from the diluted calculation as their inclusion would have been anti-dilutive. For the fifty-t wo weeks ended December 28, 2019 115 thousand restricted stock units (“RSUs”) were excluded from the diluted calculation as their inclusion would have been anti-dilutive. For the fifty-t wo weeks ended December 29, 2018, these anti-dilutive RSUs were insignificant. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: U.S. Tax Reform During 2018, in conjunction with the completion of our 2017 U.S. income tax return, we identified a change in estimate to amounts previously estimated in 2017 in relation with the U.S. Tax Cuts and Jobs Act (the “Act”) for the remeasurement of the net deferred tax liability and nonrecurring repatriation tax on accumulated earnings of foreign subsidiaries that resulted in a net tax benefit of $5.7 million. Our analysis under Staff Accounting Bulletin No. 118 was completed in 2018. Provision for Income Taxes Provision for income taxes consists of the following: (in thousands) Current Deferred Total 2020 Federal $ 112,096 $ 7,718 $ 119,814 State 23,779 1,066 24,845 Foreign 13,983 (648) 13,335 $ 149,858 $ 8,136 $ 157,994 2019 Federal $ 84,490 $ 13,618 $ 98,108 State 26,924 8,117 35,041 Foreign 16,288 1,413 17,701 $ 127,702 $ 23,148 $ 150,850 2018 Federal $ 72,598 $ 14,745 $ 87,343 State 19,571 3,439 23,010 Foreign 23,292 (2,228) 21,064 $ 115,461 $ 15,956 $ 131,417 The provision for income taxes differed from the amount computed by applying the federal statutory income tax rate due to: Year Ended (in thousands) January 2, 2021 December 28, 2019 December 29, 2018 Income before provision for income taxes at statutory U.S. federal income tax rate (21% for 2020, 2019 and 2018) $ 136,713 $ 133,927 $ 116,605 State income taxes, net of federal income tax benefit 18,610 27,682 18,178 Impact of the Act — — (5,655) Other, net 2,671 (10,759) 2,289 $ 157,994 $ 150,850 $ 131,417 Deferred Income Tax Assets (Liabilities) Temporary differences that give rise to significant deferred income tax assets (liabilities) are as follows: (in thousands) January 2, 2021 December 28, 2019 Deferred income tax assets: Accrued expenses not currently deductible for tax $ 53,433 $ 38,064 Share-based compensation 10,541 9,540 Accrued medical and workers compensation 14,825 22,202 Net operating loss carryforwards 4,348 5,565 Operating lease liabilities 630,267 627,707 Other, net 3,514 8,430 Total deferred income tax assets before valuation allowances 716,928 711,508 Less: Valuation allowance (3,183) (3,592) Total deferred income tax assets 713,745 707,916 Deferred income tax liabilities: Property and equipment (123,402) (116,277) Inventories (187,559) (183,428) Intangible assets (140,094) (136,078) Operating lease right-of-use assets (605,135) (606,146) Total deferred income tax liabilities (1,056,190) (1,041,929) Net deferred income tax liabilities $ (342,445) $ (334,013) As of January 2, 2021 and December 28, 2019, our net operating loss (“NOL”) carryforwards comprised of state NOLs of $137.9 million and $159.4 million. These NOLs may be used to reduce future taxable income and expire periodically through 2037. Due to uncertainties related to the realization of these NOLs in certain jurisdictions, as well as other credits available to us, we have recorded a valuation allowance of $3.2 million and $3.6 million as of January 2, 2021 and December 28, 2019. The amount of deferred income tax assets realizable, however, could change in the future if projections of future taxable income change. We have not recorded deferred taxes when earnings from foreign operations are considered to be indefinitely invested outside of the U.S. As of January 2, 2021, these accumulated net earnings generated by our foreign operations were approximately $41.2 million , which did not include earnings deemed to be repatriated as part of the Act. It is not practicable to determine the income tax liability that would be payable if such earnings were repatriated. Unrecognized Tax Benefits The following table summarizes the activity of our gross unrecognized tax benefits: (in thousands) January 2, 2021 December 28, 2019 December 29, 2018 Unrecognized tax benefits, beginning of period $ 29,762 $ 30,824 $ 22,665 Increases related to prior period tax positions 1,808 4,243 5,435 Decreases related to prior period tax positions — (2,277) (1,356) Increases related to current period tax positions 1,528 3,741 5,425 Settlements — (331) (14) Expiration of statute of limitations (7,971) (6,438) (1,331) Unrecognized tax benefits, end of period $ 25,127 $ 29,762 $ 30,824 |
Contingencies
Contingencies | 12 Months Ended |
Jan. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies: We are currently and from time to time subject to litigation, claims and other disputes, including legal and regulatory proceedings, arising in the normal course of business. We record a loss contingency liability when a loss is considered probable and the amount can be reasonably estimated. Although the final outcome of these legal matters cannot be determined, based on the facts presently known, it is management’s opinion that the final outcome of any pending matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.Our Western Auto subsidiary, together with other defendants (including Advance and other of its subsidiaries), has been named as a defendant in lawsuits alleging injury as a result of exposure to asbestos-containing products. The plaintiffs have alleged that certain products contained asbestos and were manufactured, distributed and/or sold by the various defendants. Many of the cases pending against us are in the early stages of litigation. While the damages claimed against the defendants in some of these proceedings are substantial, we believe many of these claims are at least partially covered by insurance and historically asbestos claims against us have been inconsistent in fact patterns alleged and immaterial. We do not believe the cases currently pending will have a material adverse effect on our financial position, results of operations or cash flows. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Jan. 02, 2021 | |
Postemployment Benefits [Abstract] | |
Benefit Plans | Benefit Plans: 401(k) Plan We maintain a defined contribution benefit plan, which covers substantially all Team Members after one year of service and who have attained the age of 21. The plan allows for Team Member salary deferrals, which are matched at our discretion. Company contributions to these plans were $21.3 million , $17.9 million and $15.0 million in 2020, 2019 and 2018. Deferred Compensation We maintain a non-qualified deferred compensation plan for certain Team Members. This plan provides for a minimum and maximum deferral percentage of the Team Member’s base salary and bonus, as determined by the Retirement Plan Committee. We established and maintained a deferred compensation liability for this plan. As of January 2, 2021 and December 28, 2019, these liabilities were $16.1 million and $15.0 million. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Jan. 02, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation: Overview We grant share-based compensation awards to our Team Members and members of our Board of Directors as provided for under our 2014 Long-Term Incentive Plan (“2014 LTIP”), which was approved by our shareholders on May 14, 2014. In 2020, 2019 and 2018, we granted share-based compensation in the form of restricted stock units (“RSUs”) or deferred stock units (“DSUs”). No share-based compensation was granted in the form of stock appreciation rights (“SARs”) in 2020, 2019 and 2018. Our grants, which have three methods of measuring fair value, generally include a time-based service, a performance-based or a market-based portion, which collectively represent the target award. As of January 2, 2021, the aggregate intrinsic value of outstanding and exercisable time-based and performance-based SARs was insignificant. In 2020, 2019 and 2018, all related activity related to SARs, including grants, exercises and forfeitures, was insignificant. At January 2, 2021, there were 4.6 million shares of common stock available for future issuance under the 2014 LTIP based on management’s current estimate of the probable vesting outcome for performance-based awards. We issue new shares of common stock upon exercise of SARs. Shares forfeited and shares withheld for payment of taxes due become available for reissuance and are included in availability. Availability also includes shares that became available for reissuance in connection with the exercise of SARs. Restricted Stock Units For time-based RSUs, the fair value of each award was determined based on the market price of our common stock on the date of grant. Time-based RSUs generally vest over a three-year period in equal annual installments beginning on the first anniversary of the grant date. During the vesting period, holders of RSUs are entitled to receive dividend equivalents, but are not entitled to voting rights. For performance-based RSUs, the fair value of each award was determined based on the market price of our common stock on the date of grant. Performance-based awards generally may vest following a three-year period subject to our achievement of certain financial goals as specified in the grant agreements. Depending on our results during the three-year performance period, the actual number of awards vesting at the end of the period generally ranges from 0% to 200% of the performance award. Performance-based RSUs generally do not have dividend equivalent rights and do not have voting rights until the shares are earned and issued following the applicable performance period. The number of performance-based awards outstanding is based on the number of awards that we believed were probable of vesting at January 2, 2021. Performance-based RSU’s granted during 2020 are presented as grants in the table at their respective target levels. The change in units based on performance represents the change in the number of granted awards expected to vest based on the updated probability assessment as of January 2, 2021. Compensation expense for performance-based awards of $9.4 million, $7.8 million, and $5.4 million in 2020, 2019 and 2018, was determined based on management’s estimate of the probable vesting outcome. For market-based RSUs, the fair value of each award was determined using a Monte Carlo simulation model. The model uses multiple input variables that determined the probability of satisfying the market condition requirements as follows: Monte Carlo Simulation Model Assumptions 2021 2019 2018 Risk-free interest rate (1) 0.9 % 2.5 % 2.4 % Expected dividend yield 0.8 % 0.2 % 0.2 % Expected stock price volatility (2) 34.0 % 33.5 % 34.0 % (1) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate having term consistent with the vesting period of the award. (2) Expected volatility is determined based on historical volatility over a matching look-back period and is consistent with the correlation coefficients between our stock prices and our peer group. Additionally, we estimated a liquidity discount of 10.1% using the Chaffe Protective Put Method to adjust the fair value for the post-vest restrictions. Market-based RSU’s vesting depends on our relative total shareholder return among a designated group of peer companies during a three-year period and will be subject to a one-year holding period after vesting. The following table summarizes activity for time-based, performance-based and market-based RSUs in 2020: Time-Based Performance-Based Market-Based (in thousands, except per share data) Number of Awards Weighted-Average Number of Awards Weighted-Average Number of Awards Weighted-Average Nonvested at December 28, 2019 460 $ 145.95 127 $ 132.03 73 $ 145.08 Granted 343 $ 137.47 74 $ 130.03 37 $ 145.04 Change in units based on performance — $ — (24) $ 139.46 — $ — Vested (1) (213) $ 141.99 (8) $ 143.03 (19) $ 138.81 Forfeited (50) $ 142.27 (7) $ 124.20 (2) $ 146.34 Nonvested at January 2, 2021 540 $ 142.47 162 $ 129.74 89 $ 146.34 (1) The vested shares of Market-Based RSUs were not exercised due to low multiplier effect for 2017 awards. The following table summarizes certain information concerning activity for time-based, performance-based and market-based RSUs: Year Ended (in thousands, except per share data) January 2, 2021 December 28, 2019 December 29, 2018 Time-based: Weighted average fair value of RSUs granted $ 137.47 $ 157.31 $ 130.12 Total grant date fair value of RSUs vested $ 30,231 $ 21,955 $ 17,527 Performance-based: Weighted average fair value of RSUs granted $ 130.03 $ 159.80 $ 119.08 Total grant date fair value of RSUs vested $ 1,123 $ 2,666 $ 9,224 Market-based: Weighted average fair value of RSUs granted $ 145.04 $ 165.70 $ 131.48 Total grant date fair value of RSUs vested $ 2,646 $ — $ — As of January 2, 2021, the maximum potential payout under our currently outstanding performance-based and market-based RSUs were 350 thousand and 178 thousand units. Other Considerations Total income tax benefit related to share-based compensation expense for 2020, 2019 and 2018 was $11.5 million, $9.4 million and $6.8 million. As of January 2, 2021, there was $67.1 million of unrecognized compensation expense related to all share-based awards that was expected to be recognized over a weighted average period of 1.5 years. Deferred Stock Units (“DSUs”) We grant share-based awards annually to our Board of Directors in connection with its annual meeting of stockholders. These awards are granted in the form of DSUs as provided for in the Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors and Selected Executives (“DSU Plan”). Each DSU is equivalent to one share of our common stock and will be distributed in common shares after the director’s service on the Board ends. DSUs granted vest over a one year service period. Additionally, the DSU Plan provides for the deferral of compensation earned in the form of (i) an annual retainer for directors, and (ii) wages for certain highly compensated Team Members. These DSUs are settled in common stock with the participants at a future date, or over a specified time period, as elected by the participants in accordance with the DSU Plan. We granted 12 thousand DSUs in 2020. The weighted average fair value of DSUs granted during 2020, 2019 and 2018 was $130.14, $156.47, and $127.14. The DSUs are awarded at a price equal to the market price of our underlying common stock on the date of the grant. For 2020, 2019 and 2018, we recognized $1.6 million, $1.9 million and $1.9 million of share-based compensation expense for these DSU grants. Employee Stock Purchase Plan We also offer an employee stock purchase plan (“ESPP”). Under the ESPP, eligible Team Members may elect salary deferrals to purchase our common stock at a discount of 10% from its fair market value on the date of purchase. There are annual limitations on the amounts a Team Member may elect of either $25 thousand per Team Member or 10% of compensation, whichever is less. As of January 2, 2021, there were 0.9 million shares available to be issued under the ESPP. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Jan. 02, 2021 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss: Accumulated other comprehensive loss, net of tax, consisted of the following: (in thousands) Unrealized Gain (Loss) on Foreign Currency Translation Accumulated Other Comprehensive Balance, December 30, 2017 $ 1,758 $ (26,712) $ (24,954) 2018 activity (294) (18,945) (19,239) Balance, December 29, 2018 1,464 (45,657) (44,193) 2019 activity (142) 9,766 9,624 Balance, December 28, 2019 1,322 (35,891) (34,569) 2020 activity (152) 7,962 7,810 Balance, January 2, 2021 $ 1,170 $ (27,929) $ (26,759) |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Jan. 02, 2021 | |
Quarterly Financial Data (unaudited) [Abstract] | |
Quarterly Financial Information (unaudited) | Quarterly Financial Data (unaudited): The following table summarizes quarterly financial data for 2020 and 2019: 2020 First Second Third Fourth (in thousands, except per share data) (16 weeks) (12 weeks) (12 weeks) (13 weeks) Net sales $ 2,697,882 $ 2,501,380 $ 2,541,928 $ 2,365,131 Gross profit $ 1,172,733 $ 1,096,714 $ 1,128,471 $ 1,083,696 Net income $ 43,588 $ 189,960 $ 147,476 $ 111,996 Basic earnings per common share $ 0.63 $ 2.75 $ 2.14 $ 1.66 Diluted earnings per common share $ 0.63 $ 2.74 $ 2.13 $ 1.65 2019 First Second Third Fourth (in thousands, except per share data) (16 weeks) (12 weeks) (12 weeks) (12 weeks) Net sales $ 2,952,036 $ 2,332,246 $ 2,312,106 $ 2,112,614 Gross profit $ 1,304,612 $ 1,009,438 $ 1,011,926 $ 928,769 Net income $ 142,500 $ 124,820 $ 123,669 $ 95,907 Basic earnings per common share $ 1.99 $ 1.74 $ 1.76 $ 1.39 Diluted earnings per common share $ 1.98 $ 1.73 $ 1.75 $ 1.38 Note: Due to 2020 having 53 weeks, Q4 2020 included 13 weeks of operations, while the comparable prior year period included 12 weeks. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Jan. 02, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Advance Auto Parts, Inc. Schedule II - Valuation and Qualifying Accounts (in thousands) Allowance for doubtful accounts receivable Balance at Beginning of Period Charges to Expenses Deductions (1) Balance at End of Period December 29, 2018 $ 18,219 $ 18,445 $ (18,622) $ 18,042 December 28, 2019 $ 18,042 $ 11,949 $ (15,742) $ 14,249 January 2, 2021 $ 14,249 $ 14,933 $ (17,253) $ 11,929 (1) Accounts written off during the period. These amounts did not impact our statement of operations for any year presented. Other valuation and qualifying accounts have not been reported in this schedule because they are either not applicable or because the information has been included elsewhere in this report . |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Accounting Period | Accounting Period Our fiscal year ends on the Saturday nearest the end of December. All references herein for the years “2020,” “2019” and “2018” represent the fiscal year ended January 2, 2021, which consist of 53 weeks, and fiscal years ended December 28, 2019 and December 29, 2018, which both had 52 weeks. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Advance and its wholly owned subsidiaries prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and money market funds with original maturities of three months or less. Also, included in cash equivalents are credit card and debit card receivables from banks, which generally settle in less than four business days. |
Inventory | Inventory Our inventory consists primarily of parts, batteries, accessories and other products used on vehicles that have reasonably long shelf lives and is stated at the lower of cost or market. The cost of our merchandise inventory is primarily determined using the last-in, first-out (“LIFO”) method. Under the LIFO method, our cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs relating to prices paid in 2020 and prior years. We regularly review inventory quantities on-hand, consider whether we may have excess inventory based on our current approach for managing slower moving inventory and adjust the carrying value as necessary. |
Vendor Incentives | Vendor Incentives We receive incentives in the form of reductions to amounts owed to and/or payments from vendors related to volume rebates and other promotional considerations. Many of these incentives are under long-term agreements in excess of one year, while others are negotiated on an annual basis or shorter. Advertising allowances provided as a reimbursement of specific, incremental and identifiable costs incurred to promote a vendor’s products are included as an offset to selling, general and administrative expenses (“SG&A”) when the cost is incurred. Volume rebates and allowances that do not meet the requirements for offsetting in SG&A are recorded as a reduction to inventory as they are earned based on inventory purchases. Total deferred vendor incentives recorded as a reduction of Inventories were $141.9 million and $173.8 million as of January 2, 2021 and December 28, 2019. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged directly to expense when incurred; major improvements are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the account balances, with any gain or loss reflected in the consolidated statements of operations. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets We perform our evaluation for the impairment of goodwill and indefinite-lived intangible assets for our reporting units annually as of the first day of the fourth quarter, or when indications of potential impairment exist. These indicators would include a significant change in operating performance, the business climate, legal factors, competition, or a planned sale or disposition of a significant portion of the business, among other factors. We assess qualitative factors such as current company performance and overall economic factors to determine if it is more-likely-than-not that the goodwill might be impaired and whether it is necessary to perform a quantitative goodwill impairment test. In the quantitative goodwill test, we compare the carrying value of a reporting unit to its fair value. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the reporting unit's fair value. Our indefinite-lived intangible assets are tested for impairment at the asset group level. Indefinite-lived intangibles are evaluated by comparing the carrying amount of the asset to the future discounted cash flows that the asset is expected to generate. If the fair value based on the future discounted cash flows exceeds the carrying value, we conclude that no intangible asset impairment has occurred. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, we recognize an impairment loss. |
Valuation of Long-Lived Assets | Valuation of Long-Lived AssetsWe evaluate the recoverability of our long-lived assets, including finite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable and exceeds its fair value. When such an event occurs, we estimate the undiscounted future cash flows expected to result from the use of the long-lived asset or asset group and its eventual disposition. These impairment evaluations involve estimates of asset useful lives and future cash flows. If the undiscounted expected future cash flows are less than the carrying amount of the asset and the carrying amount of the asset exceeds its fair value, an impairment loss is recognized. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis). |
Self-Insurance | Self-InsuranceWe are self-insured for general and automobile liability, workers’ compensation and health care claims of its employees, or Team Members, while maintaining stop-loss coverage with third-party insurers to limit its total liability exposure. Expenses associated with these liabilities are calculated for (i) claims filed, (ii) claims incurred but not yet reported and (iii) projected future claims using actuarial methods followed in the insurance industry as well as our historical claims experience. We include the current and long-term portions of its self-insurance reserves in Accrued expenses and Other long-term liabilities |
Warranty Liabilities | Warranty Liabilities The warranty obligation on the majority of merchandise sold by us with a manufacturer’s warranty is the responsibility of our vendors. However, we have an obligation to provide customers replacement of certain merchandise at no cost or merchandise at a prorated cost if under a warranty and not covered by the manufacturer. As of January 2, 2021 and December 28, 2019, our warranty liability primarily consisted of batteries with warranty coverage sold by us. We estimate our warranty obligation at the time of sale based on the historical return experience, sales level and cost of the respective product sold. To the extent vendors provide upfront allowances in lieu of accepting the obligation for warranty claims and the allowance is in excess of the related warranty expense, the excess is recorded as a reduction to cost of sales. |
Leases | Leases We lease certain store locations, distribution centers, office spaces, equipment and vehicles. We recognize lease expense on a straight-line basis over the initial term of the lease unless external economic factors exist such that renewals are reasonably certain. In those instances, the renewal period would be included in the lease term to determine the period in which to recognize the lease expense. Most leases require us to pay taxes, maintenance, insurance and other certain costs applicable to the leased premises. Effective December 30, 2018, we adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), using the alternative transition method provided in ASU 2018-11, Leases (Topic 842): Targeted Improvements . Using the alternative transition method, we applied the transition requirements at the effective date of ASU 2016-02 with the impact of initially applying ASU 2016-02 recognized as a cumulative-effect adjustment to retained earnings in the first quarter of 2019. We elected the package of practical expedients permitted under the transition guidance within the new standard. In addition, as a practical expedient relating to our store locations, distribution centers, office spaces and vehicle leases, we elected not to separate lease components from nonlease components. |
Fair Value Measurements | Fair Value Measurements |
Share-Based Payments | Share-Based PaymentsWe provide share-based compensation to our eligible Team Members and Board of Directors. We are required to exercise judgment and make estimates when determining the (i) fair value of each award granted and (ii) projected number of awards expected to vest. We calculate the fair value of all share-based awards at the date of grant and use the straight-line method to amortize this fair value as compensation cost over the requisite service period. |
Revenue Recognition | Revenues Effective December 31, 2017, we adopted ASC 606, Revenue From Contracts With Customers (Topic 606) (“ASC 606”). The results of applying Topic 606 using the modified retrospective approach were insignificant and did not have a material impact on our consolidated financial condition, results of operations, cash flows, business process, controls or systems. ASC 606 defines a performance obligation as a promise in a contract to transfer a distinct good or service to the customer and is considered the unit of account. The majority of our contracts have one single performance obligation as the promise to transfer the individual goods is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Discounts and incentives are treated as separate performance obligations. We allocate the contract’s transaction price to each of these performance obligations separately using explicitly stated amounts or our best estimate using historical data. Additionally, we estimate and record gift card breakage as redemptions occur. In accordance with ASC 606 revenue is recognized at the time the sale is made, at which time our walk-in customers take immediate possession of the merchandise or same-day delivery is made to our Professional delivery customers, which include certain independently-owned store locations. Payment terms are established for our Professional delivery customers based on pre-established credit requirements. Payment terms vary depending on the customer and generally range from 1 to 30 days. Based on the nature of receivables, no significant financing components exist. For e-commerce sales, revenue is recognized either at the time of pick-up at one of our store locations or at the time of shipment depending on the customer's order designation. Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. We estimate the reduction to Net sales and Cost of sales for returns based on current sales levels and our historical return experience. |
Receivables | Receivables, net consist primarily of receivables from Professional customers. We grant credit to certain Professional customers who meet our pre-established credit requirements. Accounts receivable is stated at net realizable value. We regularly review accounts receivable balances and maintains allowances for doubtful accounts for estimated losses whenever events or circumstances indicate the carrying value may not be recoverable. We consider the following factors when determining if collection is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic and industry trends and changes in customer payment terms. We control credit risk through credit approvals, credit limits and accounts receivable and credit monitoring procedures. |
Cost of Sales | Cost of Sales Cost of sales includes actual product cost, warranty costs, vendor incentives, cash discounts on payments to vendors, costs associated with operating our distribution network, including payroll and benefits costs, occupancy costs and depreciation, in-bound freight-related costs from our vendors, impairment of inventory resulting from store closures and costs associated with moving merchandise inventories from our distribution centers to stores, branch locations and customers. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses |
Advertising Costs | Advertising Costs We expense advertising costs as incurred. Advertising expense, net of qualifying vendor promotional funds, was $132.3 million, $117.3 million and $120.9 million in 2020, 2019 and 2018. Vendor promotional funds, which reduced advertising expense, amounted to $48.5 million and $45.7 million and $26.9 million in 2020, 2019 and 2018. |
Foreign Currency Translation | Foreign Currency TranslationThe assets and liabilities of our foreign operations are translated into U.S. dollars at current exchange rates, and revenues, expenses and cash flows are translated at average exchange rates for the year. Resulting translation adjustments are reflected as a separate component in the consolidated statements of comprehensive income. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under the asset and liability method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income taxes reflect the net income tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and for income tax reporting purposes. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We recognize tax benefits and/or tax liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts as we must determine the probability of various possible outcomes. |
Earnings per Share | Earnings per Share Basic earnings per share of common stock has been computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by including the effect of dilutive securities. Diluted earnings per share of common stock reflects the weighted-average number of shares of common stock outstanding, outstanding deferred stock units and the impact of outstanding stock options and stock appreciation rights (collectively “share-based awards”). Share-based awards containing performance conditions are included in the dilution impact as those conditions are met. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. Our CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by information about our five operating segments, for purposes of allocating resources and evaluating financial performance. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes. This ASU will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. We expect the adoption of this new standard to have an insignificant impact on our consolidated financial condition, results of operations or cash flows. During the first quarter of 2020, we adopted Financial Accounting Standard Board (“FASB”) Accounting Standards Update 2016-13 (“ASU 2016-13”), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which required us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaced the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements. During the second quarter of 2020, we early adopted the SEC’s, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities rules, which simplify the disclosure requirements related to the Company’s registered securities under Rule 3-10 of Regulation S-X. The final rule also allows for the simplified disclosure to be included within Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Internal Use Software | We capitalized $58.4 million, $29.1 million and $13.0 million incurred for the development of internal use computer software during 2020, 2019 and 2018. These costs are currently classified in the Construction in progress category above, but once placed into service within the Furniture, fixtures equipment category, these costs will be depreciated on the straight-line method over 3 to 10 years. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Revenue From External Customers By Products And Services | The following table summarizes financial information for each of our product groups. Year Ended January 2, 2021 December 28, 2019 December 29, 2018 Percentage of Sales, by Product Group Parts and Batteries 66 % 67 % 66 % Accessories and Chemicals 21 21 20 Engine Maintenance 12 11 13 Other 1 1 1 Total 100 % 100 % 100 % |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Inventory, Net [Abstract] | |
Schedule Of Inventory | Inventory balances were as follows: (in thousands) January 2, 2021 December 28, 2019 Inventories at first in, first out (“FIFO”) $ 4,382,779 $ 4,290,565 Adjustments to state inventories at LIFO 155,420 141,603 Inventories at LIFO $ 4,538,199 $ 4,432,168 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Indefinite-Lived Intangible Assets | A summary of the composition of the gross carrying amounts and accumulated amortization of acquired intangible assets are presented in the following table: January 2, 2021 December 28, 2019 (in thousands) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets: Customer relationships $ 351,056 $ (209,440) $ 141,616 350,352 (179,220) $ 171,132 Non-compete and other 38,492 (37,632) 860 38,256 (37,318) 938 389,548 (247,072) 142,476 388,608 (216,538) 172,070 Indefinite-lived intangible assets: Brands, trademark and tradenames 538,651 — 538,651 537,686 — 537,686 Total intangible assets $ 928,199 $ (247,072) $ 681,127 $ 926,294 $ (216,538) $ 709,756 |
Schedule Of Expected Amortization Expense | The table below shows expected amortization expense for the next five years and thereafter for acquired intangible assets recorded as of January 2, 2021: Year Amount (in thousands) 2021 $ 30,227 2022 $ 30,131 2023 $ 27,243 2024 $ 27,421 2025 $ 27,370 Thereafter $ 84 $ 142,476 |
Receivables, net (Tables)
Receivables, net (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Receivables [Abstract] | |
Schedule Of Accounts Receivable | Receivables, net consist of the following: (in thousands) January 2, 2021 December 28, 2019 Trade $ 449,403 $ 422,403 Vendor 278,180 249,009 Other 34,345 32,306 Total receivables 761,928 703,718 Less: allowance for doubtful accounts (11,929) (14,249) Receivables, net $ 749,999 $ 689,469 |
Long-term Debt and Fair Value_2
Long-term Debt and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt | Long-term debt consists of the following: (in thousands) January 2, 2021 December 28, 2019 4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $559 at December 28, 2019) due January 15, 2022 — 299,441 4.50% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $683 and $2,121 at January 2, 2021 and December 28, 2019) due December 1, 2023 192,990 447,879 1.75% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $4,145 at January 02, 2021) due October 1, 2027 345,854 — 3.90% Senior Unsecured Notes (net of unamortized discount and debt issuance costs of $5,600 at January 2, 2021) due April 15, 2030 494,140 — Long-term debt, excluding current portion $ 1,032,984 $ 747,320 Fair value of long-term debt $ 1,145,000 $ 795,000 |
Schedule Of Maturities Of Long-term Debt | As of January 2, 2021, the aggregate future annual maturities of long-term debt instruments are as follows: Amount (in thousands) 2021 $ — 2022 — 2023 193,673 2024 — 2025 — Thereafter 850,000 $ 1,043,673 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment consists of the following: (in thousands) January 2, 2021 December 28, 2019 Land and land improvements 0 - 10 years $ 469,640 $ 457,960 Buildings 30 - 40 years 514,199 498,871 Building and leasehold improvements 1 - 15 years 560,070 535,082 Furniture, fixtures and equipment 2 - 20 years 1,969,011 1,850,485 Vehicles 8 years 14,574 14,612 Construction in progress 124,273 114,052 3,651,767 3,471,062 Less - Accumulated depreciation (2,189,165) (2,037,849) Property and equipment, net $ 1,462,602 $ 1,433,213 |
Leases and Other Commitments (T
Leases and Other Commitments (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Leases and Other Commitments [Abstract] | |
Schedule of Operating Lease Liabilities | Operating lease liabilities consist of the following: (in thousands) January 2, 2021 December 28, 2019 Total operating lease liabilities $ 2,477,087 $ 2,495,141 Less: Current portion of operating lease liabilities (462,588) (477,982) Noncurrent operating lease liabilities $ 2,014,499 $ 2,017,159 |
Lease, Cost | Total lease cost is comprised of the following: Year Ended (in thousands) January 2, 2021 December 28, 2019 Operating lease cost $ 526,005 $ 522,928 Variable lease cost 142,546 155,892 Total lease cost $ 668,551 $ 678,820 |
Lessee, Operating Lease, Liability, Maturity | The future maturity of lease liabilities are as follows: Year Amount (in thousands) 2021 $ 539,068 2022 455,024 2023 417,127 2024 338,564 2025 290,466 Thereafter 791,056 Total lease payments 2,831,305 Less: Imputed interest (354,218) Total operating lease liabilities $ 2,477,087 |
Schedule of Other Information Relating to Lease Liabilities | Other information relating to our lease liabilities is as follows: Year Ended (in thousands) January 2, 2021 December 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 575,186 $ 517,945 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 424,393 $ 398,510 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Payables and Accruals [Abstract] | |
Schedule Of Accrued Liabilities | Accrued expenses consist of the following: (in thousands) January 2, 2021 December 28, 2019 Payroll and related benefits $ 154,388 $ 109,371 Taxes payable 100,487 96,834 Self-insurance reserves 63,990 64,845 Warranty reserves 14,120 36,820 Capital expenditures 4,963 26,201 Accrued rebates 26,096 24,532 Accrued interest 8,441 10,241 Other 234,319 167,019 Total accrued expenses $ 606,804 $ 535,863 |
Schedule Of Product Warranty Liability | The following table presents changes in our warranty reserves: Year Ended (in thousands) January 2, 2021 December 28, 2019 December 29, 2018 Warranty reserve, beginning of period $ 36,820 $ 45,280 $ 49,024 Additions to reserve 14,907 34,117 43,200 Reduction and utilization of reserve (37,607) (42,577) (46,944) Warranty reserve, end of period $ 14,120 $ 36,820 $ 45,280 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Earnings Per Share [Abstract] | |
Schedule Of Earnings Per Share, Basic And Diluted | The computation of basic and diluted earnings per share is as follows: Year Ended (in thousands, except per share data) January 2, 2021 December 28, 2019 December 29, 2018 Numerator Net income applicable to common shares $ 493,021 $ 486,896 $ 423,847 Denominator Basic weighted average common shares 68,748 70,869 73,728 Dilutive impact of share-based awards 255 296 263 Diluted weighted average common shares (1) 69,003 71,165 73,991 Basic earnings per common share $ 7.17 $ 6.87 $ 5.75 Diluted earnings per common share $ 7.14 $ 6.84 $ 5.73 (1) For the fifty-three weeks ended January 2, 2021 119 thousand restricted stock units (“RSUs”) were excluded from the diluted calculation as their inclusion would have been anti-dilutive. For the fifty-t wo weeks ended December 28, 2019 115 thousand restricted stock units (“RSUs”) were excluded from the diluted calculation as their inclusion would have been anti-dilutive. For the fifty-t wo weeks ended December 29, 2018, these anti-dilutive RSUs were insignificant. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Provision For Income Taxes, Current And Deferred | Provision for income taxes consists of the following: (in thousands) Current Deferred Total 2020 Federal $ 112,096 $ 7,718 $ 119,814 State 23,779 1,066 24,845 Foreign 13,983 (648) 13,335 $ 149,858 $ 8,136 $ 157,994 2019 Federal $ 84,490 $ 13,618 $ 98,108 State 26,924 8,117 35,041 Foreign 16,288 1,413 17,701 $ 127,702 $ 23,148 $ 150,850 2018 Federal $ 72,598 $ 14,745 $ 87,343 State 19,571 3,439 23,010 Foreign 23,292 (2,228) 21,064 $ 115,461 $ 15,956 $ 131,417 |
Schedule Of Effective Income Tax Rate Reconciliation | The provision for income taxes differed from the amount computed by applying the federal statutory income tax rate due to: Year Ended (in thousands) January 2, 2021 December 28, 2019 December 29, 2018 Income before provision for income taxes at statutory U.S. federal income tax rate (21% for 2020, 2019 and 2018) $ 136,713 $ 133,927 $ 116,605 State income taxes, net of federal income tax benefit 18,610 27,682 18,178 Impact of the Act — — (5,655) Other, net 2,671 (10,759) 2,289 $ 157,994 $ 150,850 $ 131,417 |
Schedule Of Deferred Tax Assets and Liabilities | Temporary differences that give rise to significant deferred income tax assets (liabilities) are as follows: (in thousands) January 2, 2021 December 28, 2019 Deferred income tax assets: Accrued expenses not currently deductible for tax $ 53,433 $ 38,064 Share-based compensation 10,541 9,540 Accrued medical and workers compensation 14,825 22,202 Net operating loss carryforwards 4,348 5,565 Operating lease liabilities 630,267 627,707 Other, net 3,514 8,430 Total deferred income tax assets before valuation allowances 716,928 711,508 Less: Valuation allowance (3,183) (3,592) Total deferred income tax assets 713,745 707,916 Deferred income tax liabilities: Property and equipment (123,402) (116,277) Inventories (187,559) (183,428) Intangible assets (140,094) (136,078) Operating lease right-of-use assets (605,135) (606,146) Total deferred income tax liabilities (1,056,190) (1,041,929) Net deferred income tax liabilities $ (342,445) $ (334,013) |
Unrecognized Tax Benefits | The following table summarizes the activity of our gross unrecognized tax benefits: (in thousands) January 2, 2021 December 28, 2019 December 29, 2018 Unrecognized tax benefits, beginning of period $ 29,762 $ 30,824 $ 22,665 Increases related to prior period tax positions 1,808 4,243 5,435 Decreases related to prior period tax positions — (2,277) (1,356) Increases related to current period tax positions 1,528 3,741 5,425 Settlements — (331) (14) Expiration of statute of limitations (7,971) (6,438) (1,331) Unrecognized tax benefits, end of period $ 25,127 $ 29,762 $ 30,824 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule Of Share-based Payment Award Valuation Assumptions | For market-based RSUs, the fair value of each award was determined using a Monte Carlo simulation model. The model uses multiple input variables that determined the probability of satisfying the market condition requirements as follows: Monte Carlo Simulation Model Assumptions 2021 2019 2018 Risk-free interest rate (1) 0.9 % 2.5 % 2.4 % Expected dividend yield 0.8 % 0.2 % 0.2 % Expected stock price volatility (2) 34.0 % 33.5 % 34.0 % (1) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate having term consistent with the vesting period of the award. (2) Expected volatility is determined based on historical volatility over a matching look-back period and is consistent with the correlation coefficients between our stock prices and our peer group. |
Restricted Stock Units Activity | The following table summarizes activity for time-based, performance-based and market-based RSUs in 2020: Time-Based Performance-Based Market-Based (in thousands, except per share data) Number of Awards Weighted-Average Number of Awards Weighted-Average Number of Awards Weighted-Average Nonvested at December 28, 2019 460 $ 145.95 127 $ 132.03 73 $ 145.08 Granted 343 $ 137.47 74 $ 130.03 37 $ 145.04 Change in units based on performance — $ — (24) $ 139.46 — $ — Vested (1) (213) $ 141.99 (8) $ 143.03 (19) $ 138.81 Forfeited (50) $ 142.27 (7) $ 124.20 (2) $ 146.34 Nonvested at January 2, 2021 540 $ 142.47 162 $ 129.74 89 $ 146.34 (1) The vested shares of Market-Based RSUs were not exercised due to low multiplier effect for 2017 awards. |
Restricted Stock Units Activity Additional Information | Year Ended (in thousands, except per share data) January 2, 2021 December 28, 2019 December 29, 2018 Time-based: Weighted average fair value of RSUs granted $ 137.47 $ 157.31 $ 130.12 Total grant date fair value of RSUs vested $ 30,231 $ 21,955 $ 17,527 Performance-based: Weighted average fair value of RSUs granted $ 130.03 $ 159.80 $ 119.08 Total grant date fair value of RSUs vested $ 1,123 $ 2,666 $ 9,224 Market-based: Weighted average fair value of RSUs granted $ 145.04 $ 165.70 $ 131.48 Total grant date fair value of RSUs vested $ 2,646 $ — $ — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive loss, net of tax, consisted of the following: (in thousands) Unrealized Gain (Loss) on Foreign Currency Translation Accumulated Other Comprehensive Balance, December 30, 2017 $ 1,758 $ (26,712) $ (24,954) 2018 activity (294) (18,945) (19,239) Balance, December 29, 2018 1,464 (45,657) (44,193) 2019 activity (142) 9,766 9,624 Balance, December 28, 2019 1,322 (35,891) (34,569) 2020 activity (152) 7,962 7,810 Balance, January 2, 2021 $ 1,170 $ (27,929) $ (26,759) |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Quarterly Financial Data (unaudited) [Abstract] | |
Quarterly Financial Information | The following table summarizes quarterly financial data for 2020 and 2019: 2020 First Second Third Fourth (in thousands, except per share data) (16 weeks) (12 weeks) (12 weeks) (13 weeks) Net sales $ 2,697,882 $ 2,501,380 $ 2,541,928 $ 2,365,131 Gross profit $ 1,172,733 $ 1,096,714 $ 1,128,471 $ 1,083,696 Net income $ 43,588 $ 189,960 $ 147,476 $ 111,996 Basic earnings per common share $ 0.63 $ 2.75 $ 2.14 $ 1.66 Diluted earnings per common share $ 0.63 $ 2.74 $ 2.13 $ 1.65 2019 First Second Third Fourth (in thousands, except per share data) (16 weeks) (12 weeks) (12 weeks) (12 weeks) Net sales $ 2,952,036 $ 2,332,246 $ 2,312,106 $ 2,112,614 Gross profit $ 1,304,612 $ 1,009,438 $ 1,011,926 $ 928,769 Net income $ 142,500 $ 124,820 $ 123,669 $ 95,907 Basic earnings per common share $ 1.99 $ 1.74 $ 1.76 $ 1.39 Diluted earnings per common share $ 1.98 $ 1.73 $ 1.75 $ 1.38 Note: Due to 2020 having 53 weeks, Q4 2020 included 13 weeks of operations, while the comparable prior year period included 12 weeks. |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Allowance for doubtful accounts receivable | Allowance for doubtful accounts receivable Balance at Beginning of Period Charges to Expenses Deductions (1) Balance at End of Period December 29, 2018 $ 18,219 $ 18,445 $ (18,622) $ 18,042 December 28, 2019 $ 18,042 $ 11,949 $ (15,742) $ 14,249 January 2, 2021 $ 14,249 $ 14,933 $ (17,253) $ 11,929 (1) Accounts written off during the period. These amounts did not impact our statement of operations for any year presented. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) | Jan. 02, 2021store |
Stores [Member] | |
Nature of Operations and Basis of Presentation [Line Items] | |
Number of Stores | 4,806 |
Branches [Member] | |
Nature of Operations and Basis of Presentation [Line Items] | |
Number of Stores | 170 |
Independently-owned Carquest store locations [Member] | |
Nature of Operations and Basis of Presentation [Line Items] | |
Number of Stores | 1,277 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2021USD ($)segment | Dec. 28, 2019USD ($) | Dec. 29, 2018USD ($) | Dec. 30, 2018USD ($) | |
Summary of Significant Accounting Policies [Line Items] | ||||
Deferred vendor incentives recorded as a reduction of inventory | $ 141,900 | $ 173,800 | ||
Number of Operating Segments | segment | 5 | |||
Operating lease right-of-use assets | $ 2,379,987 | 2,365,325 | $ 2,400,000 | |
Operating lease liability | $ 2,477,087 | $ 2,495,141 | 2,400,000 | |
Deferred tax impact upon adoption of ASU 2016-02 and impairment of ROU assets | $ 7,900 | |||
Percentage of sales by product group | 100.00% | 100.00% | 100.00% | |
Advertising expense | $ 132,300 | $ 117,300 | $ 120,900 | |
Vendor Promotional Funds | 48,500 | 45,700 | 26,900 | |
Losses from foreign currency transactions included in other income, net | $ 6,900 | $ 1,700 | $ 5,000 | |
Parts and Batteries [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Percentage of sales by product group | 66.00% | 67.00% | 66.00% | |
Accessories and Chemicals [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Percentage of sales by product group | 21.00% | 21.00% | 20.00% | |
Engine Maintenance [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Percentage of sales by product group | 12.00% | 11.00% | 13.00% | |
Other [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Percentage of sales by product group | 1.00% | 1.00% | 1.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Inventory, Net [Abstract] | |||
Percentage of LIFO inventory (percent) | 88.30% | 88.30% | |
Increase (decrease) to Cost of sales | $ (13,800) | $ 101,300 | $ (39,800) |
Purchasing and Warehousing costs included in inventory | 464,700 | 476,300 | |
LIFO Method Related Items [Abstract] | |||
Inventories at first in, first out (“FIFO”) | 4,382,779 | 4,290,565 | |
Adjustments to state inventories at LIFO | 155,420 | 141,603 | |
Inventories at LIFO | $ 4,538,199 | $ 4,432,168 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Goodwill | ||
Goodwill, Beginning Balance | $ 992,240 | |
Change in goodwill due to foreign currency translation | 1,400 | $ 2,000 |
Goodwill, Ending Balance | 993,590 | 992,240 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ (247,072) | $ (216,538) |
Intangible Assets Other Than Go
Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 23, 2019 | |
Acquired Intangible Assets [Line Items] | ||||
DieHard Indefinite-Lived Brand Purchase | $ 200,000 | |||
DieHard Capitalizable Transaction Costs | $ 1,500 | |||
Amortization Expense | $ 31,600 | $ 31,700 | $ 40,700 | |
Gross Carrying Amount | 389,548 | 388,608 | ||
Accumulated Amortization | (247,072) | (216,538) | ||
Net | 142,476 | 172,070 | ||
Intangible Assets, Gross (Excluding Goodwill) | 928,199 | 926,294 | ||
Intangible Assets, Net (Excluding Goodwill) | 681,127 | 709,756 | ||
Finite-lived intangible assets expected amortization expense | ||||
2021 | 30,227 | |||
2022 | 30,131 | |||
2023 | 27,243 | |||
2024 | 27,421 | |||
2025 | 27,370 | |||
Thereafter | 84 | |||
Net | 142,476 | 172,070 | ||
Trademarks [Member] | ||||
Acquired Intangible Assets [Line Items] | ||||
Accumulated Amortization | 0 | 0 | ||
Brands, trademark and tradenames | 538,651 | 537,686 | ||
Customer Relationships [Member] | ||||
Acquired Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 351,056 | 350,352 | ||
Accumulated Amortization | (209,440) | (179,220) | ||
Net | 141,616 | 171,132 | ||
Finite-lived intangible assets expected amortization expense | ||||
Net | 141,616 | 171,132 | ||
Non-Compete and Other [Member] | ||||
Acquired Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 38,492 | 38,256 | ||
Accumulated Amortization | (37,632) | (37,318) | ||
Net | 860 | 938 | ||
Finite-lived intangible assets expected amortization expense | ||||
Net | $ 860 | $ 938 |
Receivables, net (Details)
Receivables, net (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 761,928 | $ 703,718 |
Less: Allowance for doubtful accounts | (11,929) | (14,249) |
Receivables, net | 749,999 | 689,469 |
Trade [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 449,403 | 422,403 |
Vendor [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 278,180 | 249,009 |
Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 34,345 | $ 32,306 |
Long-term Debt and Fair Value_3
Long-term Debt and Fair Value of Financial Instruments (Details) - USD ($) | Jan. 31, 2017 | Jan. 02, 2021 | Sep. 29, 2020 | Sep. 16, 2020 | Apr. 16, 2020 | Dec. 28, 2019 | Dec. 03, 2013 | Jan. 11, 2012 |
Debt Instrument [Line Items] | ||||||||
Long-term Debt, Excluding Current Maturities | $ 1,032,984,000 | $ 747,320,000 | ||||||
Fair value of long-term debt | $ 1,145,000,000 | 795,000,000 | ||||||
ChargesRelatingtoMakeWholeProvisionof2022SeniorUnsecuredNotesAgreement | $ 15,800,000 | |||||||
ChargesRelatingtoDebtIssuanceCostsfrom2022SeniorUnsecuredNotes | 300,000 | |||||||
ChargesRelatingtoTenderPremiumsof2023SeniorUnsecuredNotesAgreement | $ 30,500,000 | |||||||
ChargesRelatingtoDebtIssuanceCostsfrom2023SeniorUnsecuredNotes | $ 1,400,000 | |||||||
Debt Instrument, Redemption, Description | We may redeem some or all of the senior unsecured notes at any time or from time to time, at the redemption price described in the Indenture. In addition, in the event of a Change of Control Triggering Event (as defined in the Indenture for the senior unsecured notes), we will be required to offer to repurchase the senior unsecured notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the repurchase date. The senior unsecured notes are currently fully and unconditionally guaranteed, jointly and severally, on an unsubordinated and unsecured basis by each of the subsidiary guarantors. We will be permitted to release guarantees without the consent of holders of the senior unsecured notes under the circumstances described in the Indenture: (i) upon the release of the guarantee of our other debt that resulted in the affected subsidiary becoming a guarantor of this debt; (ii) upon the sale or other disposition of all or substantially all of the stock or assets of the subsidiary guarantor; or (iii) upon our exercise of our legal or covenant defeasance option. | |||||||
Indenture provisions for events of default | The Indenture contains customary provisions for events of default including for: (i) failure to pay principal or interest when due and payable; (ii) failure to comply with covenants or agreements in the Indenture or the Notes and failure to cure or obtain a waiver of such default upon notice; (iii) a default under any debt for money borrowed by us or any of our subsidiaries that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25.0 million without such debt having been discharged or acceleration having been rescinded or annulled within 10 days after receipt by us of notice of the default by the Trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding; and (iv) events of bankruptcy, insolvency or reorganization affecting us and certain of its subsidiaries. In the case of an event of default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated. The Indenture also contains covenants limiting the ability of us and our subsidiaries to incur debt secured by liens and to enter into sale and lease-back transactions. | |||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 23,600,000 | |||||||
Guarantor Obligations, Collateral Held | 57,500,000 | |||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||
2021 | 0 | |||||||
2022 | 0 | |||||||
2023 | 193,673,000 | |||||||
2024 | 0 | |||||||
2025 | 0 | |||||||
2025 | 850,000,000 | |||||||
Long-term Debt, Gross | 1,043,673,000 | |||||||
1.75% senior unsecured notes (2027 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | |||||||
Debt Instrument, Face Amount | $ 350,000,000 | |||||||
Debt Issuance, Percentage Of Principal | 99.67% | |||||||
Debt Issuance Costs, Gross | $ 2,900,000 | |||||||
3.90% senior unsecured notes (2030 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.90% | |||||||
Debt Instrument, Face Amount | $ 500,000,000 | |||||||
Debt Issuance, Percentage Of Principal | 99.65% | |||||||
4.50% senior unsecured notes (2023 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |||||||
Debt Instrument, Repurchased Face Amount | $ 256,300,000 | |||||||
Debt Instrument, Face Amount | $ 450,000,000 | |||||||
Debt Issuance, Percentage Of Principal | 99.69% | |||||||
4.50% senior unsecured notes (2022 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |||||||
Debt Instrument, Repurchased Face Amount | $ 300,000,000 | |||||||
Debt Instrument, Face Amount | $ 300,000,000 | |||||||
Debt Issuance, Percentage Of Principal | 99.97% | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Term | 5 years | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000,000,000 | |||||||
Line of credit facility increase increment limit | $ 250,000,000 | |||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.10% | |||||||
Revolving Credit Facility [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.10% | |||||||
Revolving Credit Facility [Member] | letters of credit sublimit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 200,000,000 | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term Line of Credit | 0 | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | 1,000,000,000 | |||||||
Letters of Credit Outstanding, Amount | 0 | |||||||
Senior Notes [Member] | 4.50% senior unsecured notes (2022 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 559,000 | |||||||
Long-term Debt | 0 | 299,441,000 | ||||||
Senior Notes [Member] | 4.50% senior unsecured notes (2023 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 2,121,000 | |||||||
Long-term Debt | 192,990,000 | 447,879,000 | ||||||
Senior Notes [Member] | 1.75% senior unsecured notes (2027 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 4,145,000 | |||||||
Long-term Debt | 345,854,000 | 0 | ||||||
Senior Notes [Member] | 3.90% senior unsecured notes (2030 Notes) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 5,600,000 | |||||||
Long-term Debt | 494,140,000 | 0 | ||||||
Bilateral Letter of Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Letters of Credit Outstanding, Amount | $ 100,000,000 | $ 111,600,000 | ||||||
2013 Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.15% | |||||||
Minimum [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.91% | |||||||
Minimum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.00% | |||||||
Maximum [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||||||
Maximum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | $ 3,651,767 | $ 3,471,062 | |
Accumulated depreciation | (2,189,165) | (2,037,849) | |
Property and Equipment, Net | 1,462,602 | 1,433,213 | |
Depreciation | 218,500 | 206,700 | $ 201,600 |
Capitalized software development costs | 58,400 | 29,100 | 13,000 |
Impairment of Long-Lived Assets to be Disposed of | 200 | 2,300 | $ 13,400 |
Land and Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | 469,640 | 457,960 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | 514,199 | 498,871 | |
Building and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | 560,070 | 535,082 | |
Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | $ 1,969,011 | 1,850,485 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 8 years | ||
Property and Equipment, Gross | $ 14,574 | 14,612 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Gross | $ 124,273 | $ 114,052 | |
Minimum [Member] | Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Minimum [Member] | Land and Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 0 years | ||
Minimum [Member] | Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 30 years | ||
Minimum [Member] | Building and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 1 year | ||
Minimum [Member] | Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 2 years | ||
Maximum [Member] | Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Maximum [Member] | Land and Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Maximum [Member] | Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 40 years | ||
Maximum [Member] | Building and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 20 years |
Leases and Other Commitments Le
Leases and Other Commitments Leases and Other Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 30, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Total operating lease liabilities | $ 2,477,087 | $ 2,495,141 | $ 2,400,000 |
Less: Current portion of operating lease liabilities | (462,588) | (477,982) | |
Noncurrent operating lease liabilities | $ 2,014,499 | $ 2,017,159 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent | |
Operating lease cost | $ 526,005 | $ 522,928 | |
Variable lease cost | 142,546 | 155,892 | |
Total lease cost | 668,551 | 678,820 | |
2021 | 539,068 | ||
2022 | 455,024 | ||
2023 | 417,127 | ||
2024 | 338,564 | ||
2025 | 290,466 | ||
Thereafter | 791,056 | ||
Total lease payments | 2,831,305 | ||
Less: Imputed interest | (354,218) | ||
Lessee Option to Extend Reasonably Certain | 97,100 | ||
Operating lease legally binding minimum payments for lease that have not yet commenced | $ 50,600 | ||
Operating Lease, Weighted Average Remaining Lease Term | 7 years | ||
Operating Lease, Weighted Average Discount Rate, Percent | 3.60% | ||
Operating cash flows from operating leases | $ 575,186 | 517,945 | |
Operating leases | 424,393 | $ 398,510 | |
Unrecorded Unconditional Purchase Obligation | $ 122,800 | ||
Facilities [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Facilities [Member] | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Typical initial term | 5 years | ||
Facilities [Member] | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Typical initial term | 10 years | ||
Equipment [Member] | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Typical initial term | 3 years | ||
Equipment [Member] | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Typical initial term | 6 years |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | Jan. 02, 2021 | Dec. 28, 2019 | |
Payables and Accruals [Abstract] | |||||
Payroll and related benefits | $ 154,388 | $ 109,371 | |||
Taxes payable | 100,487 | 96,834 | |||
Self-insurance reserves | 63,990 | 64,845 | |||
Warranty reserves | $ 36,820 | $ 45,280 | $ 45,280 | 14,120 | 36,820 |
Capital expenditures | 4,963 | 26,201 | |||
Accrued rebates | 26,096 | 24,532 | |||
Accrued interest | 8,441 | 10,241 | |||
Other | 234,319 | 167,019 | |||
Total accrued expenses | $ 606,804 | $ 535,863 | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||||
Warranty reserve, beginning of period | 36,820 | 45,280 | 49,024 | ||
Additions to reserve | 14,907 | 34,117 | 43,200 | ||
Reduction and utilization of reserve | (37,607) | (42,577) | (46,944) | ||
Warranty reserve, end of period | $ 14,120 | $ 36,820 | $ 45,280 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Jan. 02, 2021 | Dec. 28, 2019 | Nov. 08, 2019 | Aug. 07, 2019 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased (shares) | 3 | 3.4 | ||
Aggregate cost of shares repurchased | $ 458.5 | $ 487.4 | ||
Remaining amount authorized under Share Repurchase Program | $ 432.2 | |||
Average repurchase price (in usd per share) | $ 150.65 | $ 144.23 | ||
November 2019 Share Repurchase Program Addition [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized amount under Share Repurchase Program | $ 700 | |||
August 2019 Share Repurchase Program [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized amount under Share Repurchase Program | $ 400 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
Jan. 02, 2021 | Oct. 03, 2020 | Jul. 11, 2020 | Dec. 28, 2019 | Oct. 05, 2019 | Jul. 13, 2019 | Apr. 18, 2020 | Apr. 20, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 111,996 | $ 147,476 | $ 189,960 | $ 95,907 | $ 123,669 | $ 124,820 | $ 43,588 | $ 142,500 | $ 493,021 | $ 486,896 | $ 423,847 |
Basic weighted average common shares | 68,748 | 70,869 | 73,728 | ||||||||
Dilutive impact of share-based awards | 255 | 296 | 263 | ||||||||
Diluted weighted average common shares | 69,003 | 71,165 | 73,991 | ||||||||
Basic earnings per common share, Net income applicable to common stockholders (in usd per share) | $ 1.66 | $ 2.14 | $ 2.75 | $ 1.39 | $ 1.76 | $ 1.74 | $ 0.63 | $ 1.99 | $ 7.17 | $ 6.87 | $ 5.75 |
Diluted earnings per common share, Net income applicable to common stockholders (in usd per share) | $ 1.65 | $ 2.13 | $ 2.74 | $ 1.38 | $ 1.75 | $ 1.73 | $ 0.63 | $ 1.98 | $ 7.14 | $ 6.84 | $ 5.73 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 119 | 115 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Income Taxes [Line Items] | |||
Provision for income taxes related to the Act, remeasurement period benefit | $ 5,700 | ||
Federal: | |||
Current Federal Tax Expense (Benefit) | $ 112,096 | $ 84,490 | 72,598 |
Deferred Federal Income Tax Expense (Benefit) | 7,718 | 13,618 | 14,745 |
Federal Income Tax Expense (Benefit), Continuing Operations | 119,814 | 98,108 | 87,343 |
State: | |||
Current State and Local Tax Expense (Benefit) | 23,779 | 26,924 | 19,571 |
Deferred State and Local Income Tax Expense (Benefit) | 1,066 | 8,117 | 3,439 |
State and Local Income Tax Expense (Benefit), Continuing Operations | 24,845 | 35,041 | 23,010 |
Foreign: | |||
Current Foreign Tax Expense (Benefit) | 13,983 | 16,288 | 23,292 |
Deferred Foreign Income Tax Expense (Benefit) | (648) | 1,413 | (2,228) |
Foreign Income Tax Expense (Benefit), Continuing Operations | 13,335 | 17,701 | 21,064 |
Current Income Tax Expense (Benefit) | 149,858 | 127,702 | 115,461 |
Deferred income tax benefit | 8,136 | 23,148 | 15,956 |
Income Tax Expense (Benefit) | 157,994 | 150,850 | 131,417 |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income before provision for income taxes at statutory U.S. federal income tax rate (21% for 2020, 2019 and 2018) | 136,713 | 133,927 | 116,605 |
State income taxes, net of federal income tax benefit | 18,610 | 27,682 | 18,178 |
Impact of the Act | 0 | 0 | (5,655) |
Other, net | 2,671 | (10,759) | 2,289 |
Income Tax Expense (Benefit) | 157,994 | 150,850 | 131,417 |
Deferred income tax assets: | |||
Accrued expenses not currently deductible for tax | 53,433 | 38,064 | |
Share-based compensation | 10,541 | 9,540 | |
Accrued medical and workers compensation | 14,825 | 22,202 | |
Net operating loss carryforwards | 4,348 | 5,565 | |
Deferred Tax Assets Operating Lease Liabilities | 630,267 | 627,707 | |
Other, net | 3,514 | 8,430 | |
Total deferred income tax assets before valuation allowances | 716,928 | 711,508 | |
Less: Valuation allowance | (3,183) | (3,592) | |
Total deferred income tax assets | 713,745 | 707,916 | |
Deferred income tax liabilities: | |||
Property and equipment | (123,402) | (116,277) | |
Inventories | (187,559) | (183,428) | |
Intangible assets | (140,094) | (136,078) | |
Deferred Tax Liabilities Operating Lease Assets | (605,135) | (606,146) | |
Total deferred income tax liabilities | (1,056,190) | (1,041,929) | |
Net deferred income tax liabilities | (342,445) | (334,013) | |
Deferred Tax Assets, Valuation Allowance less Foreign Tax Carryfowards | (3,200) | (3,600) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning of period | 29,762 | 30,824 | 22,665 |
Increases related to prior period tax positions | 1,808 | 4,243 | 5,435 |
Decreases related to prior period tax positions | 0 | (2,277) | (1,356) |
Increases related to current period tax positions | 1,528 | 3,741 | 5,425 |
Settlements | 0 | (331) | (14) |
Expiration of statute of limitations | (7,971) | (6,438) | (1,331) |
Unrecognized tax benefits, end of period | 25,127 | 29,762 | 30,824 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense [Abstract] | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense/(Gain) | (200) | (1,600) | $ (900) |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 4,700 | 4,900 | |
Unrecognized Tax Benefits, Income Tax Penalties Accrued | 100 | 100 | |
Undistributed Earnings of Foreign Subsidiaries | 41,200 | ||
State and Local Jurisdiction [Member] | |||
Deferred income tax liabilities: | |||
Operating Loss Carryforwards | $ 137,900 | $ 159,400 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Postemployment Benefits [Abstract] | |||
Company contributions to defined contribution benefit plan | $ 21.3 | $ 17.9 | $ 15 |
Deferred compensation plan liability | $ 16.1 | $ 15 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares Available for Grant | 4,600,000 | ||
Share-based compensation expense | $ 45,271 | $ 37,438 | $ 27,760 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Deferred income tax benefit | 11,500 | $ 9,400 | $ 6,800 |
Unrecognized compensation expense | $ 67,100 | ||
Weighted average period unrecognized compensation expense expected to be recognized | 1 year 6 months | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning of period | 460,000 | ||
Granted | 343,000 | ||
Granted, Weighted Average Grant Date Fair Value | $ 137.47 | $ 157.31 | $ 130.12 |
Change in Units Based on Performance | 0 | ||
Change in Units Based on Performance, Weighted Average Exercise Price | $ 0 | ||
Vested | (213,000) | ||
Vested, Weighted Average Exercise Price | $ 141.99 | ||
Forfeited | (50,000) | ||
Forfeited, Weighted Average Grant Date Fair Value | $ 142.27 | ||
Nonvested, end of period | 540,000 | 460,000 | |
Nonvested, Weighted Average Grant Date Fair Value | $ 142.47 | $ 145.95 | |
Total grant date fair value of vested | $ 30,231 | $ 21,955 | $ 17,527 |
Stock Appreciation Rights (SARs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted | 0 | 0 | 0 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 9,400 | $ 7,800 | $ 5,400 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning of period | 127,000 | ||
Granted | 74,000 | ||
Granted, Weighted Average Grant Date Fair Value | $ 130.03 | $ 159.80 | $ 119.08 |
Change in Units Based on Performance | (24,000) | ||
Change in Units Based on Performance, Weighted Average Exercise Price | $ 139.46 | ||
Vested | (8,000) | ||
Vested, Weighted Average Exercise Price | $ 143.03 | ||
Forfeited | (7,000) | ||
Forfeited, Weighted Average Grant Date Fair Value | $ 124.20 | ||
Nonvested, end of period | 162,000 | 127,000 | |
Nonvested, Weighted Average Grant Date Fair Value | $ 129.74 | $ 132.03 | |
Maximum potential payout of outstanding awards for Equity Instruments Other than Options | 350,000 | ||
Total grant date fair value of vested | $ 1,123 | $ 2,666 | $ 9,224 |
Market Based Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk-free interest rate (1) | 0.90% | 2.50% | 2.40% |
Expected dividend yield | 0.80% | 0.20% | 0.20% |
Expected stock price volatility (2) | 34.00% | 33.50% | 34.00% |
Liquidity discount for post-vest restrictions | 10.10% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested, beginning of period | 73,000 | ||
Granted | 37,000 | ||
Granted, Weighted Average Grant Date Fair Value | $ 145.04 | $ 165.70 | $ 131.48 |
Change in Units Based on Performance | 0 | ||
Change in Units Based on Performance, Weighted Average Exercise Price | $ 0 | ||
Vested | (19,000) | ||
Vested, Weighted Average Exercise Price | $ 138.81 | ||
Forfeited | (2,000) | ||
Forfeited, Weighted Average Grant Date Fair Value | $ 146.34 | ||
Nonvested, end of period | 89,000 | 73,000 | |
Nonvested, Weighted Average Grant Date Fair Value | $ 146.34 | $ 145.08 | |
Maximum potential payout of outstanding awards for Equity Instruments Other than Options | 178,000 | ||
Total grant date fair value of vested | $ 2,646 | $ 0 | $ 0 |
Deferred Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 1,600 | $ 1,900 | $ 1,900 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted | 12,000 | ||
Granted, Weighted Average Grant Date Fair Value | $ 130.14 | $ 156.47 | $ 127.14 |
Employee Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares Available for Grant | 900,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Purchase discount of fair market value (percent) | 10.00% | ||
Team Member annual purchase limit | $ 25 | ||
Team Member annual purchase limit, percentage of compensation (percent) | 10.00% | ||
Minimum [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Typical number of awards vesting at end of period (percent) | 0.00% | ||
Maximum [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Typical number of awards vesting at end of period (percent) | 200.00% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | $ (34,569) | ||
Activity | 7,810 | $ 9,624 | $ (19,239) |
Balance, End of Period | (26,759) | (34,569) | |
Unrealized Gain (Loss) on Postretirement Plan | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | 1,322 | 1,464 | 1,758 |
Activity | (152) | (142) | (294) |
Balance, End of Period | 1,170 | 1,322 | 1,464 |
Foreign Currency Translation | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | (35,891) | (45,657) | (26,712) |
Activity | 7,962 | 9,766 | (18,945) |
Balance, End of Period | (27,929) | (35,891) | (45,657) |
Accumulated Other Comprehensive (Loss) Income | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, Beginning of Period | (34,569) | (44,193) | (24,954) |
Activity | 7,810 | 9,624 | (19,239) |
Balance, End of Period | $ (26,759) | $ (34,569) | $ (44,193) |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
Jan. 02, 2021 | Oct. 03, 2020 | Jul. 11, 2020 | Dec. 28, 2019 | Oct. 05, 2019 | Jul. 13, 2019 | Apr. 18, 2020 | Apr. 20, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Quarterly Financial Data (unaudited) [Abstract] | |||||||||||
Net sales | $ 2,365,131 | $ 2,541,928 | $ 2,501,380 | $ 2,112,614 | $ 2,312,106 | $ 2,332,246 | $ 2,697,882 | $ 2,952,036 | $ 10,106,321 | $ 9,709,003 | $ 9,580,554 |
Gross profit | 1,083,696 | 1,128,471 | 1,096,714 | 928,769 | 1,011,926 | 1,009,438 | 1,172,733 | 1,304,612 | 4,481,614 | 4,254,746 | 4,219,413 |
Net income | $ 111,996 | $ 147,476 | $ 189,960 | $ 95,907 | $ 123,669 | $ 124,820 | $ 43,588 | $ 142,500 | $ 493,021 | $ 486,896 | $ 423,847 |
Basic earnings per common share (in usd per share) | $ 1.66 | $ 2.14 | $ 2.75 | $ 1.39 | $ 1.76 | $ 1.74 | $ 0.63 | $ 1.99 | $ 7.17 | $ 6.87 | $ 5.75 |
Diluted earnings per common share (in usd per share) | $ 1.65 | $ 2.13 | $ 2.74 | $ 1.38 | $ 1.75 | $ 1.73 | $ 0.63 | $ 1.98 | $ 7.14 | $ 6.84 | $ 5.73 |
Valuation and Qualifying Acco_3
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Allowance for Doubtful Accounts Receivable, Current, Beginning of Period | $ 14,249 | ||
Allowance for Doubtful Accounts Receivable, Current, End of Period | 11,929 | $ 14,249 | |
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Allowance for Doubtful Accounts Receivable, Current, Beginning of Period | 14,249 | 18,042 | $ 18,219 |
Valuation Allowances and Reserves, Charged to Cost and Expense | 14,933 | 11,949 | 18,445 |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Deduction | (17,253) | (15,742) | (18,622) |
Allowance for Doubtful Accounts Receivable, Current, End of Period | $ 11,929 | $ 14,249 | $ 18,042 |