Returned to positive comparable sales growth in 2025 after three years of declines, driven by a renewed focus on the 'blended box' model for Pro and DIY customers.

Successfully rationalized the asset footprint by exiting over 500 corporate and 200 independent locations, resulting in approximately $70 million in operating cost savings.

Substantially completed a massive supply chain overhaul, consolidating the U.S. distribution center network from nearly 40 locations in 2023 to 16 currently.

Improved parts availability to the high 90% range by expanding assortment by 100,000 new SKUs and implementing a data-driven assortment framework.

Enhanced Pro channel service levels by reducing average delivery times by over 10 minutes through a new store operating model and optimized labor allocation.

Attributed margin expansion to 'merchandising excellence,' specifically strategic sourcing, product cost reductions of 70 basis points, and smarter pricing intelligence.

Strengthened the leadership team with key internal promotions and external hires to oversee supply chain efficiency and store transformation initiatives.

Targets 2026 comparable sales growth of 1% to 2%, assuming Pro continues to outperform DIY while both channels contribute positively.

Expects adjusted operating income margin expansion to the 3.8% to 4.5% range, supported by a gross margin target of approximately 45%.

Projects a return to positive free cash flow of approximately $100 million in 2026, despite a $300 million capital expenditure plan for new stores and hubs.

Revised the timeline for the 7% operating margin target, now expecting at least 100 basis points of expansion in 2027 rather than reaching the full target that year.

Plans to launch ARGOS, a new owned brand for oil and fluids, to capture value-conscious customers and improve category margins.

Identified a softer consumer spending environment and macro economic factors as primary reasons for top-line momentum lagging original expectations.

Noted that 2026 net sales will face a 200 basis point headwind due to cycling 2025 liquidation sales and an extra operating week.

Anticipates 50 basis points of headwind from LIFO expense in 2026, with approximately $30 million expected in the first quarter alone.

Lowered supplier financing usage to $2.5 billion, reflecting a strategic rebalancing of payables based on new purchase volumes and vendor negotiations.

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Management clarified that lower reported inflation in 2025 was due to cycling prior-year price investments and ongoing tariff negotiations.

Stated they remain a 'rational player' in the market, using AI-driven tools to optimize promotions rather than pricing below competitors.

Attributed the reduction in supplier financing to the mix of purchases and strategic sourcing work rather than a lack of program capacity.

Confirmed that moving vendors off the program is only done when it makes economic sense for the P&L through improved cost of goods.

Acknowledged that while merchandising initiatives are ahead of schedule, supply chain and store productivity gains are in earlier, investment-heavy stages.

Emphasized that 2026 is a 'pivotal investment year' for labor and technology that will inform the trajectory for 2027 and beyond.

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