2025 Outlook and Comp Sales
Q: If trends don't improve, will you maintain normal comp guidance for 2025?
A: Management acknowledged that while 2024 has been uncharacteristic, they will evaluate their best read when establishing guidance for 2025. They believe they are well-positioned to take share gains and provide strong returns, remaining confident in their ability to grow faster than the market. "

Business Recovery Expectations
Q: Why do you think headwinds are short-lived, and when will business flip?
A: They expect conditions to improve post-election and with moderating inflation. Historical patterns suggest a return to normal industry growth. Though not seeing specific indicators yet, they are confident based on past experiences that the headwinds are temporary. "

Deferred Maintenance and Demand Recovery
Q: When did deferred maintenance impact start, and what unlocks pent-up demand?
A: Deferred maintenance trends have persisted throughout the year, impacting sales more over time. Management expects customers to return, citing historical bounce-backs after tough years. Factors like lower gas prices or normalized weather could unlock pent-up demand. "

Tariff Impact and China Exposure
Q: How disruptive would new tariffs be, and can you pass on costs?
A: They have reduced dependency on China by over 500 basis points, decreasing exposure to around 25%. " They feel confident in passing through increased costs, as they did with previous tariffs of 20–25%. " " However, tariffs as high as 60% would be unprecedented, and the broader consumer impact is uncertain. " "

Market Share and Growth Expectations
Q: Do you factor market share gains into next year's comp expectations?
A: Yes, they believe it's their entitlement to grow faster than the market due to their advantages and momentum. They expect to continue taking share gains, and this will be reflected in their 2025 expectations. "

Operating Margin and Expenses
Q: What's driving Q4 margin easing and SG&A expenses?
A: Easier comparisons from last year and the benefit of one extra Sunday (approximately 30–40 basis points to comp sales) are aiding margins. " Gross margin remains solid and in line with guidance. SG&A expenses are stabilizing as they lap prior investments, with no change in investment cadence. "

New Store Economics and Expansion
Q: How are higher construction costs affecting new store economics?
A: Despite higher construction costs, with owned store costs approaching $3 million, productivity and returns remain strong. " This supports their plan to open 200–210 new stores in 2025, feeling confident about returns even with higher costs. "

Competition from Mass Retailers
Q: Has competition from mass retailers impacted DIY business?
A: While mass retailers sell some commodities, management believes their service model and customer loyalty keep customers sticky. They don't see any significant changes in 2024 and are confident in overcoming competition with their professional service and availability. "

DIFM vs. DIY Recovery
Q: How will recovery differ between DIFM and DIY segments?
A: They expect the DIFM segment to remain more resilient and continue gaining share. While DIY has been more impacted, they anticipate a meaningful comeback as consumers return, possibly with catch-up demand. "

Hurricane Impact on Sales
Q: Are hurricanes net positive or negative for sales volumes?
A: Hurricanes like Helene caused some disruption, impacting comps by 10–15 basis points in the quarter. " Overall, weather is considered net neutral, and the total impact in Q4 remains to be seen. "

Supply Chain Expansion
Q: Does the new Virginia DC cover the Northeast market?
A: The new Mid-Atlantic distribution center opens opportunities in that corridor. However, there may be a need for another DC between Stafford and Devens in the future. They are excited to expand in key markets like Northern Virginia, D.C. Metro, Baltimore, and Philly. "