Thank you for joining us today. I'm Elisabeth Eisleben, Senior Vice President, Communications and Investor Relations at Advance Auto Parts. We are thrilled to have so many of you joining us virtually today for our strategic update. We recognize these virtual presentations are not the same as us all being together. However, we have some great things to share and are so glad you've joined us. We look forward to our dialogue today and continuing the conversation as we execute on our strategic priorities. Today, I'm joined by Tom Greco, our President and Chief Executive Officer, and several other members of our executive leadership team. Before we begin, I'd like to take a moment to review our notice regarding forward-looking statements. This information will also be included in today's presentation, which will be available on our Investor relations website. During this event, we will be making comments that are forward-looking, including certain financial targets. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties, and important factors, including those discussed in the risk factors and other sections of our annual report on Form 10-K. Following our prepared remarks, we'll host a Q&A session to address your questions. We will begin today with Tom Greco and an overview of the attractive industry in which we operate. Shifting to Advance, we'll talk about then our ownership culture. This is a very different company than it was just a few years ago. From there, we'll walk through our business strategy. Our goal over the next three years is to deliver top-quartile total shareholder return, which we plan to deliver by growing sales faster than the market, a significant acceleration in margins, and a substantial increase in the return of excess cash to our shareholders. You'll hear from Jason McDonell and Bob Cushing to discuss our initiatives to enable our growth at or above the market. Further, Mike Creedon, Reuben Slone, and Jeff Shepherd will review our key initiatives to deliver accelerated margin expansion. Finally, Jeff will discuss our financial strategy, including our financial targets and capital allocation priorities. We will then ensure we have plenty of time to address your questions. You can submit questions throughout the presentation, and we'll work to address as many as possible during our time together today. With that, let's get started with Tom. Thanks, Elisabeth, and good morning. As the impact of COVID-19 finally starts to subside, I hope all of you are healthy and beginning to once again enjoy all of the wonderful things that life has to offer. I'd like to start today by reflecting back on the last 12 months and thanking our team members and independent partners for their dedication and perseverance. Throughout COVID-19, our people cared for each other, and they cared for our customers. Their focus enabled us to achieve strong performance over this time period. At the outset of COVID-19, we immediately established three overarching priorities. First, we prioritized the health, safety, and well-being of our team members and customers, which took on an entirely new meaning during the pandemic. We made substantial investments to protect our people and our customers from COVID, which contributed to an infection rate that was well below the national average. Equally important, our team members felt safe coming into work, and our customers felt safe coming into shop. It's clear that these and other actions built trust during the pandemic, both with team members, where our org health scores reached an all-time high, and with customers, where we improved our net promoter scores. Our second priority was to preserve cash and protect the P&L during the crisis. Shortly after COVID hit, we took a number of actions to strengthen our balance sheet and respond to a rapidly changing consumer landscape. We accelerated digital and omni-channel initiatives, including the rollout of our Advance Same Day suite of services. We also added 50 new Carquest independents, and we launched DieHard right in the middle of the pandemic. These initiatives helped deliver three consecutive quarters of strong comp sales, margin expansion, and profit growth, along with 44 straight weeks of share gains. We also knew that the day would come when infection rates would start to decline, a vaccine would become available, and more people would get back in their cars and start driving. That's why our third priority was to emerge stronger after the crisis. With this in mind, we cordoned off a small team to do a refresh of our strategic business plan. Our data science team built multiple scenarios for key input variables, developed a deep analytical understanding of how changes in a post-COVID world would impact industry demand, and then we reprioritized our strategic initiatives. Today, we're excited to share our learnings from this work. We'll also respond to questions you may be asking. Notably, what's now different about Advance? Quite simply, why Advance Auto Parts? Let me start by saying what you already heard from Elisabeth. Advance is a very different company today than it was in the past. There are four primary reasons. First, we've built an ownership culture throughout the organization. Secondly, we have a diversified asset base that we believe will enable us to grow faster than the market. Third, we have a unique and compelling opportunity to expand margins. Finally, this is a business that generates a tremendous amount of cash. Cash that we can and will return to shareholders. Which begs a final question, how much excess cash will be returned? Well, as you can see in the slide, we're targeting top quartile total shareholder return. Let me start by sharing a bit more about our integrated, yet diversified asset base. First things first, we put the customer at the center of everything we do, whether that customer is a DIYer or a professional installer. As an example of what's integrated, we've harmonized how we engage customers and how we receive demand through digital assets. This includes merging our B2C online catalog, our pro catalog, and our mobile app, along with many other digital and mobile assets, onto a single omni-channel platform. While parts availability is presented to our various customers differently, the functionality and availability of our industry-leading assortment is now similar. At the same time, our physical asset base is diversified in terms of how we fulfill demand. For the general market, we have Advance corporate stores. These stores sell both pro and DIY and are most similar to the major chains. Separately, we're in the process of integrating Autopart International into Worldpac to create a singular pure play DIFM powerhouse. Worldpac has an outstanding reputation with pro customers and is widely recognized for consistent, reliable availability of difficult-to-find parts. Finally, we have a growing list of dedicated Carquest independents. Carquest independents sell both DIY and pro and are very effective in rural geographies. Our independent owners have a close connection to their communities and very strong relationships with their customers. This combination of a scaled digital platform, which helps us gain a deep understanding of demand across all channels in every market, along with a tailored go-to-market approach, brings unique capabilities and competitive advantages. While we'll talk at length today about what we plan to achieve, how we plan to achieve top quartile TSR is equally important. Our vision, advancing a world in motion, is highlighted in our third annual corporate sustainability report. This was released last month and is available in the Investor Relations section of our website. We did not have a defined ESG agenda three years ago, but our current agenda is robust. Let's get started with a brief overview of what are very attractive industry fundamentals. According to the Auto Care Association's most recent annual report, the total addressable market represented $138 billion in annual revenue in 2020. Prior to 2020, growth was very consistent at a 3.6% CAGR. In 2020, industry sales declined for the year. To better understand what drove last year's decline, our data science team looked at over 50 variables to determine the most relevant drivers of industry demand. While there are certainly other factors, three variables unique to the automotive aftermarket stood out. First, the number of vehicles in operation drives demand. This represents the number of vehicles on the road at any given time. In the U.S., the VIO grew 1.9% from 2016- 2019. This number is impacted by new vehicles coming in and scrap vehicles going out. While the ACA estimate for 2020 is not final, you can see that they're expecting VIO growth of 1%, even as new vehicle sales soften. This was not a factor in the 2020 decline in industry sales. The second industry-related driver of demand is the age of the fleet. Of course, older cars generally require more repair and maintenance. As you look over the past few years, you can see from the bottom row that the fleet is aging from 11.6 years in 2016 to 11.9 years old in 2020. Related to this, we also look closely at vehicles in the sweet spot, illustrated here in red as vehicles from 4-11 years old. These are vehicles that are often past warranty and can be serviced by independent garages. Once again, vehicles in the sweet spot has been growing around 2% since 2019. Clearly, an aging fleet and more vehicles in the sweet spot did not contribute to the decline in industry sales last year. This leads us to miles driven. Growth in miles driven is important for categories like brakes, which require wear and tear in order to be replaced. While miles driven was increasing from 2016 to 2019, COVID disrupted this in 2020. Overall, miles driven were down 13.2% in 2020. From all the work that we've done, this was without question, the primary driver of the decline in industry demand in 2020. The good news is vehicle miles driven is expected to recover in 2021, and when it does, we expect to see a resurgence of sales in categories like friction and under car, as well as in key urban markets like New York, Boston, and Los Angeles. When you put all of this together, we saw consistent 3%-4% growth over many years leading up to COVID, followed by a significant drop in 2020, primarily due to a reduction in miles driven. Looking forward, the ACA industry outlook for 2021-2023 contemplates the following. Slight annual growth in vehicles in operation, an aging fleet, including more vehicles in the sweet spot, and importantly, a slow recovery of miles driven. As we said previously, we do not expect miles driven in 2021 to return to 2019 levels, but we do expect them to exceed 2020 levels. We're already seeing this in recent weeks. Therefore, the ACA is forecasting approximately 4% industry growth over the next three years. Separately, the total addressable market is extremely fragmented. While other retail verticals are more concentrated, the automotive aftermarket still has a wide variety of competitors. In fact, there's over 36,000 auto parts stores in the country. Not to mention two-step distributors, mass merchant retailers, online retailers, and new vehicle dealers. The four largest players, including Advance and shown in yellow on the left side of this chart, have just 30% of the market. Advance Auto Parts alone represents only 7%. Amidst a growing market and positive industry fundamentals, we expect the larger players to leverage scale and continue to gain share within the broader market in the coming years. I know many of you have asked about future mobility trends. This includes the impact of battery electric vehicles, illustrated here as BEV. According to McKinsey, the impact of battery electric vehicles is still several years away from us. In fact, the number of internal combustion engines and hybrid electric vehicles here in the U.S. is still expected to increase in this decade. Regardless, battery electric vehicles are expected to grow rapidly over this timeframe and increase as a percentage of the total. We're excited to participate in this evolving mobility trend. The automotive aftermarket has adapted many times over the years. At Advance, we believe that not only electric, but ride sharing, connectivity, and autonomous can one day present us with new partnerships and new opportunities. In terms of electric, we have a terrific brand in DieHard, which fundamentally stands for power. Secondly, we have over 6,000 stores and retail locations across North America that we can leverage to potentially capitalize on new trends. Finally, we're already partnering with our suppliers on environmental sustainability as vehicle technology changes. Bottom line, we believe that evolving mobility trends, like the shift to more hybrid and electric, provide opportunities for us to find new growth vectors. Allow me to summarize the industry outlook. The automotive aftermarket is a resilient industry with very attractive fundamentals. The ACA forecasts growth of approximately 4% over the next three years. We expect the major players will continue to gain share of a fragmented market, and this is an industry that has adapted many times over the years, and we expect this will continue. Now let's shift our attention to Advance Auto Parts and our ownership culture. We began our turnaround by building an experienced and diverse leadership team. Please note that only one person shown on this slide was a direct report of the previous CEO. This massive amount of change in a very short period was disruptive. The leadership team on this slide, which has been in place for a couple of years now, brought important new skills to Advance necessary for our transformation. This includes global, digital, technology, e-commerce, and omnichannel expertise, along with deep brand marketing and supply chain experience. Underneath this leadership team, we've built a very strong bench through internal development and external recruitment. We've also driven our ownership culture deep into the organization. We leverage our Fuel the Frontline program to recognize top-performing team members with stock grants. This enables frontline associates to share the same benefits of ownership as management. Since inception, we've distributed more than 22,000 grants valued at more than $60 million. As a result, our turnover in key store-level roles is much lower today than it was in 2017. In terms of diversity, equity, and inclusion, we nearly doubled the number of women at VP plus from 2017 through 2020, while people of color at VP plus improved by 60%. While we have much work yet to do here, our agenda is well underway and now being led by Chief Diversity Officer, Dena LaMar. Finally, our 2020 org health scores improved almost 2,000 basis points from our first assessment four years ago. As the saying goes, culture eats strategy for breakfast. While we believe we have a winning business strategy, we simply could not do it without an ownership culture and a winning people strategy. Let's shift gears and talk about our business strategy. As we built our plans, there's been no initiative of greater importance than updating our technology. When this leadership team arrived, most of our systems were literally old enough to drink and vote in most states. Multiple, old, and in some cases, no longer supported software platforms were prevalent all over the organization. These systems had to be gradually sunset, integrated, and made forward-compatible with a robust growth agenda, which also required entirely new capabilities. Essentially, the task facing our Chief Technology Officer, Sri Donthi, was to fix, build, and transform our tech platform simultaneously over the strategic business plan horizon. As we sit here today, we've significantly upgraded the talent on our tech team and addressed long-standing issues. We've also built one enterprise platform by consolidating four disparate systems in payroll, accounting, and our catalog. We're now in the process of integrating inventory and merchandising systems. At the same time, we've invested in transformational capabilities to better assort parts, improve the customer experience, and price more strategically to grow margins. While we still have plenty of work ahead, our stores now have a digital-ready store infrastructure, and they operate with much more bandwidth and processing speed. We've recently installed over 2,000 POS registers, and the applications our team members have at their disposal is a dramatic improvement over what we had. This includes new tools like optimized scheduling and substantial improvements in our product catalog. Our catalog now has enterprise-wide visibility on assortment and provides real-time delivery estimates for our customers. I could have picked literally any function within Advance to illustrate how we've transformed our capabilities in the past few years. During this period, we had to address long-standing issues across all functions. At the same time, our performance improved. This slide illustrates AAP performance over the past six years post the acquisition of Carquest. You can see that we've grown comp sales and operating income each year from 2018 - 2020, compared to being down from 2015- 2017. Adjusted EPS has improved from down double digits to up double digits. We've also nearly doubled free cash flow from an average of $369 million per year in 2015 - 2017 to $639 million per year 2018 through 2020. While there's no question we would like to be further along our journey at this stage, we've never been better positioned to execute our plan than we are right now. Let's talk about where we go from here. This slide illustrates some basics about Advance today, including the fact that in addition to 50 distribution centers, we have 478 in-market super hubs, and Worldpac branches. These buildings serve as mini fulfillment centers and are larger than our average store in size, with significantly more parts. This enables all of our stores to access the entirety of our assortment very quickly, which is extremely important when our company mission is passion for customers, passion for yes. To say yes, you need to have the right part in the right place at the right time. This is a differentiator in the eyes of both DIY and DIFM customers. The right part is all about availability. What you'll hear from Jason and Bob is that we have the widest selection of national brands and OE parts of anyone. Also related to the right part, we have the marketing capability to build powerful own brands, something Jason will showcase with DieHard. However, the right part has to be in the right place. This is all about customer care, and the place is simply when, where, and how the customer wants to be served, be it online or in a store. Finally, while we may have the right part in the right place, we need to get it to the customer at the right time. This is all about speed and consistency and where the integration of our digital and physical assets comes into play. Once again, with over 6,000 corporate and independent stores, close to 500 super hubs, and Worldpac branches, and 50 distribution centers, we believe our fulfillment capabilities are enabling us to serve our customers better than ever. Let me turn it over to Jason McDonell to walk through our passion for customers, passion for yes approach. Jay? Thanks, Tom. Hey, just like you, I'm also passionate about helping our customers advance. We are customer-centric, and it all starts with the customer journey to make sure that we have the right part at the right place at the right time. Whether their car won't start, their brakes are squeaking, or that dreaded engine light goes on, it is important to understand what the customer's going through. On their journey, customers then have a quick decision point. Do I do it myself, or do I reach out to a pro to do it for me? This totally depends on their capability and their time or their capability and what they can afford. At Advance Auto Parts, what differentiates us in the market is our balance and strength to take an integrated approach, helping those customers across both DIY and pro. Our unique ability to build customer-focused digital solutions at multiple touchpoints offers this competitive advantage, and I'm going to show you this for DIY, and then I'm going to pass it to Bob for pro. We have completed an extensive amount of research around customer journeys, and it highlights the importance that brands play in their purchase decision. Across our network, and partnering with our vendors, we have the widest assortment of stock parts with over 350,000 national, OE, and own-brand SKUs. Then add a half a million special order SKUs all in our catalog. With our customized and dynamic assortment approach in each market, we ensure that our DIY customer has the right part when they need it. From my past experience, a true passion point for me is building billion-dollar brands, and we have two of these brands at Advance in DieHard and Carquest. Focus here will help us drive margin expansion. Jeff's going to go deeper on that later in the presentation. At Advance, we plan to continue to invest and expand our proprietary brand lineup and quality parts, like the DieHard Enhanced Flooded Battery or our painted Carquest hub assembly. What you can expect when we build brands is that we develop a fully-integrated marketing plan. Not just any plan, a bold one that's going to differentiate Advance with breakthrough programming, like you've seen from the launch of DieHard. We have a passionate team that ensures high impact at multiple touch points, including digital, social, first-party email, online, and TV in a bold campaign like this one that generated over 2 billion earned media impressions as John McClane helped us bring DieHard back. [Presentation] [Presentation] [Presentation] [Presentation] [Presentation] [Presentation] [Presentation] [Presentation] Yippee-ki-yay. That brings back so many great memories for me. The combination of doing this during a difficult time during COVID, but also the first time Advance ever did a campaign like this, and the integration and the passion and support from the team. Moving on from there to the right part and the right place. Just like that DieHard campaign did, we take a customer-focused omni-channel approach to everything we do. We know that approximately 80% of all of our DIY visits start online, and well over 50% of those are mobile. That's why at Advance, digital and omni-channel is not a tactic. It's a mindset. If digital is our customer's first step on their journey, we need to be there to help them advance. Hey, everyone, Ryan Blaney here, driver number 12, Advance Auto Parts Ford Mustang for Team Penske. I just want to say I'm really excited to be part of the Advance Auto Parts team. They do so much to support local communities and local short tracks. When they say personalization and local, they definitely mean it. Thank you. Have a good day. Just like Ryan said, our right place connection is a personalized one. To deliver the care our customers expect, we leverage our Speed Perks loyalty program with greater than 12 million active members. We enhance it with CRM and data science capabilities. This enables us to personalize our offers and more effectively attract, retain, and graduate our customers. In 2020, we saw over 20% growth in graduation through the tiers. We drove this with a personalization such as custom solutions for their year, make, model of their vehicle, or communicating to them when the temperature dropped below 20 degrees, or even if a big storm is coming into their area. At Advance, we take caring for our customer personally. The third element of growing faster than the market is how we uniquely deliver speed at the right time. What differentiates Advance is the integration of physical and digital assets to help our customers advance with speed. In partnership with Reuben and Mike, one of the ways this is done is with our trademarked platform, Advance Same Day. When customers buy online or on our mobile app, we have their parts ready with Advance Same Day Pickup in less than 30 minutes. With Advance Same Day Delivery within three hours. Yeah, I said three hours. No other pure-play auto parts retailer currently do that. It's the combination of digital and physical assets that delivers that speed. That's our recipe for growing faster than the market in DIY. Over to Bob to describe how we differentiate in pro. We just heard from Jason about our DIY customer journey and how we are winning with care and speed. I'm now going to provide an overview on how we are winning with our Advance Enterprise Pro business. First, the Pro business is uniquely different than DIY. The Pro business includes all those service shops who repair and maintain all vehicle types, businesses that recondition and sell vehicles, new vehicle dealers, fleet, and heavy duty. With our enterprise of Pro banners, Advance, Worldpac, Carquest, and Autopart International, we can touch every vehicle service in the Pro channel. This is what makes Advance unique. A few years back, Tom committed to transforming the Pro customer experience by providing a personalized and customized solution with our products, our team members, our training, and our technology. Here's how we approached it. Our goal is to be first call with all our customers, position ourselves to always be the first choice to drive higher share of wallet, build strong long-term partnerships. We focused on our customer's journey in the vehicles they service. From diagnosing vehicles using our MotoLogic diagnostic tool, to informing the car owner with our MotoVisuals video repair tool, with our B2B platform to access the enterprise part availability to the Carquest and Worldpac training program, we provide everything they need. The Pro customer prefers specific brands. They need choices based upon their customer preferences, the repair job, and the vehicles they service. Our digital B2B platforms, Advance Pro and speedDIAL, provides the service shop with unlimited availability to an industry-leading multi-brand product assortment of national, genuine original equipment, and own brands across the enterprise. With our dynamic assortment tool, which similar technology Worldpac has deployed for over 20 years, we dynamically customize our product assortment closest to the customer for every servicing store, hub, and DC. With our award-winning OE and aftermarket catalog, we highlight these brands with industry-leading coverage, including first to market for new model applications. Right part, right time, right place. One lookup, 100% parts access over 350,000 stocking SKUs, including 150,000 national and genuine original equipment parts. Our channel competitors have mostly replacement parts, while Advance has replacement and genuine original equipment parts, a truly differentiated solution for Pro customers. One of the greatest challenges the service shops face is the shortage of technicians. With combining our Carquest Technical Institute and the Worldpac Training Institute, we have an industry-leading curriculum of general and factory training. In doing so, we have developed a comprehensive career path for technicians to help our customers retain and recruit technicians. Advance Professional has trained more technicians than any other parts provider in the industry. That's our commitment to our customers. Another solution is our highly personalized and customized banner program, TechNet, with over 13,000 North American members. This program enables independent service shops to create their own national network. With our multi-banner Pro focus, a highly customized solution for each of these automotive channels provides the right brands, the right service, the right technology, and the right team members to ensure the right experience. This is a list of the industry-leading automotive businesses with a regional or national footprint, e-commerce only, and omni-channel business models. These businesses have highly differentiated models requiring a highly differentiated solution. What do they have in common? Every one of them. Every one of them has chosen Advance to be a primary parts provider. No channel competitor can make the same statement, only Advance. To better service our customers, we deployed an enterprise solution to capture all data to measure share of wallet and sales opportunities. Our digital platform, MyAdvance, provides our customers a 360-degree access to products, catalog, credit, our diagnostic data tools, our platform of repair videos, whatever they need in their journey. One portal, total access. When we refer to the right part, right time, right place, the delivery is the most important step for Pro customers. Speed is critically important. That's why we have built a digital delivery system to provide the discipline to meet the speed of deliveries. Handheld devices with electronic signature capture, return process capability, and order scanning for accuracy guarantees the best customer experience. Dispatching and tracking with live feeds into our order management system for customers to make an informed decision when placing an order. In closing, we have built and deployed highly personalized and customized programs to service all channels in our industry through a robust digital platform with industry-leading brands. Our relentless pursuit of the best experience is how we plan to grow faster than the market. I'll turn it back to Tom to kick off our margin expansion discussion. Thank you. Thanks, Bob. I think you now have a picture of why we've been gaining share over the past year in both DIY and pro. Let's shift gears and talk about our unique and compelling margin expansion opportunity. There are a number of ways in which we could have illustrated this, but to keep it very simple, this slide illustrates the 2021 FactSet consensus estimates for margin expansion for a selection of retailers. The current estimate for AAP is 62 basis points. The purpose of this chart is to show that this estimate is at the higher end of performance relative to other retailers. We'll also show you that we expect to be at the higher end of this chart for at least the next three years. We plan to expand margins across four areas. First, improvements in sales and profit per store to result in lower four-wall SG&A as a percent of sales. Secondly, we have robust plans to expand gross margins in two areas by streamlining our supply chain and leveraging our category management initiatives to drive product margin rate. Finally, we'll wrap up with our plans to take cost out of corporate SG&A. Let's start with our Executive Vice President of U.S. Stores, Mike Creedon, who will outline plans for improving sales and profit per store. Mike? Thanks, Tom. Folks, I only get you for a minute. My role at Advance Auto Parts is to make sure all of the investments you've just heard about and this incredible value proposition translates into a better customer experience. We realized early on that that was best achieved by improving our team members' experience. That ownership culture that Tom spoke about is at the heart of everything we do. We say at Advance Auto Parts, our people are our best part. We knew that by focusing on our team members, and making it easier for them to do their job and delight our customers, we could significantly grow our sales and profit per store. The good news is, we have multiple levers to grow sales and profit per store. Early on in our transformation, one of those levers was closing underperforming stores that structurally couldn't be fixed. In fact, we closed over 200 of these stores since 2017. As a result of this, and a relentless focus to increase the comp sales of the remaining stores, we have now increased our sales per store for three straight years. Our objective is to get to $1.8 million per store by 2023. While we are pleased with the progress of sales per store, we also have a robust productivity agenda to reduce store-level costs. This includes reducing unnecessary tasks, eliminating waste, and leveraging technology to better position our team members to delight our customers. The biggest line item we have in the stores is payroll. To better manage this, we rolled out an industry-leading schedule management tool from Reflexis last year to ensure we were scheduling not for the benefit of our team members but for the convenience of our customers. We are now there for our DIY, pro, and digital customer when they need us, serving them when they need us most, like nights and weekends. We have our best and most knowledgeable sales folks, our GMs, now leading from the front by leveraging part-time team members or straight eliminating many of the tasks we were asking those GMs to do. We have seen an increase in our GMs are selling the complete job, which has driven sales per store and improved our net promoter score and Google star ratings, all of which builds loyalty. In summary, we are continuing to drive execution of our sales and profit per store initiatives, and I am confident we will deliver our share of the company's margin expansion goals. This cleanup of the store footprint, improved execution at store level, and maniacal focus on delighting the customer has positioned us, and in fact, I would say we have earned the right to expand instead of contract, open new stores again, and grow the Advance name and our industry-leading owned brands, the brands our customers want in new geographies. We have a strong position on the East Coast and in the central part of the country, but the fastest-growing geographies of the Southwest and California in particular demand our attention. Florida has long been a stronghold for Advance. There are 17 million vehicles in operation in Florida. California has 31 million vehicles in operation alone. With our real estate deal with Pep Boys, we set ourselves up very well to realize growth much faster than traditional greenfield openings. Our history has shown that when we convert an existing parts store, we see 30%-40% higher sales in year one versus a traditional new store opening. Finally, we aren't the only ones excited about our growth out west. Those strategic accounts that Bob spoke to you about earlier, they are so excited that we are positioning ourselves to serve them where they serve their customers. As you can probably tell, I am incredibly excited about what we are doing at Advance. I'm really excited to welcome to the stage my partner, Reuben Slone, to talk about one of the great unlocks in our company, supply chain. Thank you. Thanks, Mike, for sharing that great story about how our stores present a unique margin opportunity. Now I'll share how streamlining our supply chain presents another big margin opportunity. The good news is that improving our parts availability does, in fact, improve inventory productivity and cost productivity. Our approach to streamlining our supply chain mirrors the IT approach. Fix our supply chain, build an integrated supply chain, and transform our supply chain to enable growth. When I stepped off the Board of Directors and joined Advance leadership in October 2018, our supply chain was not working. Our parts availability lagged our peers. Our distribution center or DC hourly team member turnover was unacceptable. Team member engagement was the lowest in the company, and we needed to build a safety-focused culture. We lacked common operating processes, and we had five different warehouse management systems across all our DCs. In just over two years, we fixed our core operations and improved our execution. Our turnover and injury rates have been cut in half. Our team member engagement is up 30%. Our parts availability is up 50 basis points. For all DC locations, we are implementing one common process template through the rollout of our single warehouse management and labor management system. This new suite of systems allows us to incentivize our hourly team members based on their performance. When Advance acquired GPI in 2013, we started with four separate supply chains. Through our cross-banner replenishment initiative, we are building an integrated Advance and Carquest supply chain. The DC nearest an Advance or Carquest store will now serve that store. 20% of our combined company-owned and independent stores are being moved to the nearest DCs. By the end of 2021, we expect to have reduced our annual miles driven from DC to store by over 14%. We are also building an integrated Worldpac and Autopart International supply chain. When complete, we expect to reduce the total number of Autopart International branches by 20%. I'm excited to share two new supply chain initiatives, building a tiered supply chain and transforming our customer fulfillment. We are tiering our supply chain to improve parts availability and cost productivity. We are pulling the slowest-moving SKUs from all of our DCs into just four of our strategically located DCs or regional DCs. As a result, we can hold more inventory on the higher-velocity SKUs, improving availability. We also become more customer-friendly for our suppliers. Many of our suppliers will be able to ship to these four regional distribution centers instead of to all distribution centers. By taking these actions, we improve our parts availability for our customers while reducing costs for our suppliers and Advance. We are transforming customer fulfillment to improve service and productivity. Today, we use several underutilized transportation modes for our stores. We have over 10,000 delivery vehicles shipping to professional customers, multiple third-party partners for store-to-store shipments, and gig and small parcel delivery services for ship-to-home. We are implementing a new delivery management system, which selects from each of these modes to get the right part at the right time to our customers at a lower fixed and variable cost. I hope you would agree that we have made significant progress fixing our supply chain over the past two years. I am confident that we will continue to transform our supply chain to improve parts availability while driving inventory and cost productivity. Jeff will now share our next big margin opportunities in own brands, pricing, and SG&A. Thanks, Reuben. You heard Tom talk about how we are transforming our IT landscape. You just heard from Reuben about the transformation agenda for our supply chain. I want to talk to you about the transformational work to drive product profitability. Now, historically, we've described this opportunity within three territories, material cost optimization, own brand expansion, and pricing. I'm going to start with own brand expansion. We're executing plans that both expand our assortment and increase our breadth of own brands. Let me give you an example with Autopart International. We're continuing the integration of Autopart International into Worldpac. At the same time, we're integrating the API product across all of our banners, such as the undercar parts you see here. Next is Carquest. The Carquest brand is already very well established within the professional channel. We're expanding this brand into additional categories, such as engine management and undercar. Both of these initiatives are currently underway. Now, the Carquest brand is and will continue to be OE quality. Our professional customers tend to like brands that are less developed in retail. This strategy will provide the professional customer with another solution, in addition to our existing national brands, with the same high level of quality. Finally, we're also developing our own brands with DieHard. While we know this replaced an existing own brand, we're very excited about the results we've seen since the launch in July of last year. We have consistently taken share in the battery category. We do intend to expand DieHard into other categories as long as it makes strategic sense. DieHard stands for reliability and power. Therefore, we don't expect to have DieHard in every category. Because we are taking a strategic approach, we don't anticipate DieHard outside the battery category until sometime next year. We've seen early success in our own brand efforts. For this reason, we're confident we can expand product margins. Now, let me talk a little more about another promising category management initiative, pricing. Until last year, we had an antiquated pricing tool that only allowed for a single price at the SKU level. This resulted in an inability to price strategically at a market level. It also led to general managers of our stores pricing locally to help ensure competitiveness. However, this created inefficiencies within the markets that we operate in. Since the implementation of a modern pricing tool, we now have all the capabilities we would expect in order to be more competitive with our offerings. We've also invested in people to ensure we have a strong end-to-end strategy for the life cycle of our product offerings. With these two investments, we're now able to plan our approach on a market-by-market basis, and this will be supported by detailed analytics, which enables us to take actions such as promotional pricing that will help to differentiate in any given market and improve margin rate. Overall, this gives us margin opportunities that were not available to us before. Now, I want to talk about our efforts to permanently reduce SG&A costs. We've broadly categorized our SG&A into integration, safety, and what we call ways of working. We've been executing against our integration and safety initiatives for a couple of years now. Examples of these include going from multiple HR systems to a single system, our finance ERP initiative of going from four finance systems to one, and the establishment of a global capability center in Hyderabad, India. This will provide 24/7 capabilities as well as improved wage rates. We've been able to take costs out due to lower accident rates, which has reduced total medical and auto claims, both in frequency and severity. These initiatives have been and are expected to continue to yield meaningful savings. They also represent the vast majority of cost savings that we're expecting over the next three years. Like many other companies, we also identified cost savings as we managed through the pandemic. We learned, for example, that we can be productive despite being remote. We took a close look at the way we were working. This initiative was designed to focus the organization on our highest priorities, remove waste or unproductive work out of our day-to-day tasks, as well as address any opportunities in our spans and layers. Through this, we were able to restructure our corporate functions, which included a voluntary retirement program. To be clear, none of this impacts our field team members. We took a deep dive into our back office footprint, and through the combination of optimizing our spans and layers, as well as employing a hybrid work environment, we are able to consolidate many of our current back office locations. For example, we announced last week that we're closing or significantly reducing our Richmond and Roanoke locations. As you heard from many of our leaders today, we have a number of exciting initiatives that we believe will expand our margins over the next three years. These initiatives fall into two buckets. There are those that are iterative or ongoing, and those that are transformational. We've laid out a timeline for our transformational initiatives, many of which are structural issues that had to be addressed. I'd like to highlight a couple of these initiatives. I'm going to start with supply chain. Our warehouse management system implementation, for example, is targeted to be completed by mid-2022. We expect the largest distribution centers to be done this year, and that'll drive the majority of the cost savings. You heard Reuben, who is a published expert in supply chain transformation, also discuss our work around cross-banner replenishment. This initiative is on track to be completed by the third quarter of this year. There's going to be some additional stores that will take this project into 2022. Nearly all the savings are expected to be realized fully in the fourth quarter of this year. Moving on to SG&A. Our finance ERP implementation, which kicked off in 2018, is expected to wrap up this year, and we are already seeing the savings associated with going from four disparate ERP systems to a common cloud-based system, which allows for common processes to be executed by a single team. Finally, we anticipate the full integration of a single merchandising system to be completed in 2023. We also have those margin expansion initiatives that'll be ongoing. You heard Mike talk about sales and profit per store. We will continuously look for ways to better leverage our payroll and reduce waste in all of our stores. Our category management initiatives, including strategic pricing, will also be an ongoing opportunity. While we will at some point optimize our private label strategy, this is a long-term initiative that requires careful coordination and planning. Whether it's transformational or iterative, we have a high level of confidence we can expand our margins by flawlessly executing these initiatives due to the fact that nearly all of these efforts are already underway. Now that you have a better understanding of our margin expansion initiatives and the timing, let's move to the financial strategy. We're here today to talk about our three-year financial targets. Just as a quick reminder, we did provide guidance for fiscal 2021 as part of our fourth quarter earnings release. Subsequent to this, we also announced our plans to lease the retail space of 109 Pep Boys stores in California. We just pre-released certain financial results covering our estimate of the first quarter. We're excited about both our footprint expansion as well as the results we're seeing so far in 2021. As a result, we're updating our guidance, which includes improvements to the top line and bottom line of our P&L, as well as additional investments that we believe are necessary to flawlessly execute our expansion into the California market. We also increased our estimates of the stores that we will open in 2021. Let's move into our financial targets through 2023. We're very excited about the financial outlook over the next three years. Let me start with sales growth outlook. Recall, Tom indicated we anticipate the market will grow at a 4.1% CAGR over the next three years. We've modeled our outlook under an assumption the market grows below expectations, as well as at current expectations. When you couple these growth assumptions with our planned margin expansion initiatives, this results in a 2023 operating income margin rate of 10.5%-12.5%. We also believe we can meaningfully generate cash over the next three years. As our larger capital-intensive initiatives are completed, we anticipate lower annual capital expenditures in 2022 and 2023. Let's take a look at the contribution each margin expansion pillar is expected to provide. This is a great investment story. We talked about our pricing and private label opportunities in category management. You heard Reuben describe the transformational efforts leading to an integrated, efficient supply chain. The combination of our transformational and ongoing efforts around SG&A will not only permanently remove costs, but as you heard from Mike, we are continuously focused on store productivity to remove barriers and eliminate waste. We are confident these initiatives will provide meaningful margin expansion opportunities. Now, all great investment stories have some risk, and we've identified a number of anticipated inflationary headwinds, such as wage increases, medical costs, fuel prices, and product cost inflation, including commodities and other material costs. Now, of these inflationary categories, wages represent the vast majority of the headwinds that we've modeled. However, we're not modeling a major increase in the federal minimum wage. Finally, it's important to call out that while everyone will undoubtedly experience some form of inflation, our industry has been very good at managing many inflationary factors through pricing. If necessary, it's a tool we have at our disposal. Now, let's move to capital allocation. First, I want to point out that our capital allocation priorities are unchanged. We have maintained an investment-grade rating, partly due to our disciplined cash management and solid leverage ratio. Over the past two years, we've completed early redemptions on outstanding notes. In some cases, we've replaced other outstanding bonds with lower coupon debt. These actions have both reduced our weighted average borrowing costs and improved our debt maturity profile. We are very comfortable with our outstanding obligations, and at this time, we have no plans to change our current debt structure. Investing in the business has been and will continue to be a critical component to achieving our margin expansion pillars. In 2021, we plan to invest between $300 million and $350 million to support many of our margin expansion opportunities. As we complete our transformational initiatives, we do anticipate the annual rate of capital spending to decrease from the current levels that we're forecasting for 2021. Finally, our third priority is to return excess cash to shareholders. Before I get into those details, the next slide is a reminder of the meaningful cash we believe this business can generate. We've demonstrated meaningful cash flow generation over the last several years, and in fact, we've generated over $1.9 billion in free cash flow over the last three years. We believe this will continue through 2023 and beyond. This strong cash flow generation, coupled with a stable debt level and maturity profile, means we have a significant opportunity to return excess cash to our investors. To help achieve our third capital allocation objective, our board recently approved a $1 billion share repurchase authorization. This approval provides us with a total authorization of about $1.3 billion. In addition to that, our board also approved a quarterly dividend of $1 per share. This is a significant increase over our previous quarterly dividend of $0.25 a share, and this will help to enable a balanced approach to returning excess cash to shareholders. We're thrilled with both of these approvals, and we believe this further supports the confidence that both management and the board has in our three-year time horizon. Free cash flow has been and will remain one of our core strengths. We will continue to invest in our business to build capabilities and drive future performance while returning significant cash to our shareholders through this balanced approach of both buybacks and dividends. To further sharpen our approach to capital allocation, we want to provide you with some metrics to help guide how we're thinking about returning excess cash to our shareholders. As I said, we're establishing a balanced framework through a combination of both dividends and share repurchases. Our long-term dividend target will be 35%-45% of annual adjusted net income. We don't anticipate that we'll achieve this target in 2021. This is largely due to the fact that we've already made two quarterly dividend payments at $0.25 a share. At an annualized $4 per share in 2021, we believe we would be well within our long-term dividend target. For share repurchases, we intend to provide an annual range of dollars we will commit for share repurchase activity. We'll provide this range on an annual basis, and it'll be dependent on a number of factors, including investments we intend to make and the price of our shares in the market. For 2021, this target is $300 million-$500 million. Through yesterday, we've already repurchased more than $170 million worth of shares at a weighted average price of just under $158 a share. We hope this framework provides you with a sense of our commitment to return excess cash to our shareholders. I'd like to conclude the financial strategy with a few thoughts around total shareholder return. We believe in the next three years, we have the potential for an impressive TSR. Through the combination of all the margin expansion opportunities our team just spoke about, the meaningful shareholder returns through the combination of share repurchases and dividends, and the revenue growth that we believe makes this industry and our business so attractive. As a leadership team, we are committed to delivering strong and sustainable total shareholder return, which at this level, will put us well into the top quartile range. Let me turn it back over to Tom for his final comments. Thanks, Jeff. Before I transition to Q&A, we started the day with a question. Why Advance Auto Parts? We hope you agree that this is a very different Advance today than it was. We also hope that you share our enthusiasm that we've never been better positioned to drive top quartile total shareholder return, primarily because we've now integrated AAP in a number of areas to leverage enterprise scale, while at the same time not only preserving but elevating the focus that our diversified asset base and go-to-market models provide. We're now going to take a short break, and we'll be right back to answer your questions. [Presentation] Thank you so much for joining us today. We've shared a lot of very exciting stuff. I hope that you have enjoyed so far. We're looking forward to answering your questions. We did a pre-release, some Q1 information this morning. We've gotten quite a few questions on the quarter. We are going to try and focus on the long term during this, but we are happy to follow up after. With that, we're going to kick off and answer a couple of the questions that we've got so far. Tom, the first one that we've got from a couple people is on total shareholder return. That was discussed throughout the presentation, and they're looking for a little more clarity on how we calculate it and how we define top quartile TSR. Sure. Well, first of all, when the pandemic hit, as we said in our presentation, we established three priorities right out of the gate. One of them, the third one, was to emerge stronger following the crisis. We knew that we were going to be so preoccupied during the pandemic with the short term. We wanted to have a group of people thinking about what happened after the crisis. That team was cordoned off. They spent a lot of time thinking about our business strategy, and we did engage a third-party consulting firm that specializes in helping companies optimize total shareholder return. As we engaged with them, they did a lot of work with us, an investor survey, rigorous analysis. We really went through to our plans with a TSR lens. Everything that we did went through the TSR lens, all of our initiatives, all of the key planks that we had in our strategic plan. Once we did that, we put it up against the TSR measures, which are net revenue growth, the net income margin rate, and of course, returns to shareholders in the form of buybacks and dividends. With that in mind, we were able to get a very clear set of priorities to maximize total shareholder return. As we showed, at the median, we have a 20%-22% target to deliver over the next three years, and we're very confident in our ability to deliver that target. As for the relative performance, what this company does is they look back five years at the S&P 500, they look back three years, and they also look out three years and essentially get a pulse check, which they do periodically from investors in terms of what the expectations are going forward. No matter what lens you put it under, we will be comfortably in that top quartile at the 20%-22%. We feel very good about our plan to deliver that. Great. Thanks. Jeff, the next one, very timely as you just closed out with capital allocation. We've completed about $170 million in buybacks this year, yet the guidance you just provided was $300 million-$500 million for the full-year. You just got an authorization for an additional $1 billion, although you already had $300 million remaining. Right. Can you give a little more color on that? Yeah, sure. First of all, we're committed to returning excess cash to our shareholders, and that's going to be through a combination of both share repurchases as well as dividends. Now, as it relates to share repurchases, we got the $1 billion, which we're absolutely thrilled about. In addition, we have the $300 million from the existing authorization. It gives us a total of about $1.3 billion. Now, what that does is a couple of things. First, Elisabeth, as you said, we've given a stated range of shares that we intend to repurchase this year of $300 million-$500 million. We've gotten off to a great start. We're already over $170 million so far this quarter, so we're really happy with our efforts so far this year. The $1.3 billion does a couple of things. First, it should renew our focus and continue our focus in terms of using share repurchases as a tool to provide meaningful cash back to our shareholders. By having the $1.3 billion, we'll be able to execute the $300 million-$500 million, and it sets us up really nicely for 2022 as well. The combination of all that and making sure that we give a balanced approach of share repurchases and dividends is our commitment back to our shareholders to return that excess cash. Great. As a follow-up on that, the capital allocation framework that you just provided. They're looking for some clarity on how they think about capital allocation from here with the shift in dividend that some were a little surprised by, some very pleased with. Why the significant shift now and the forward look for capital allocation? Sure. Well, first of all, our capital allocation priorities, they haven't changed. We're going to continue to maintain an investment-grade rating. We're going to continue to invest in the business, and then we're going to return excess cash to shareholders. That's something we've been talking about consistently, and that hasn't changed. Now, as it relates to returning excess cash to shareholders, we've generated a significant amount of free cash flow over the last three years. In fact, over $1.9 billion. When we think about returning that excess cash to our shareholders, we want to make sure we have a balanced approach of dividends as well as share repurchases. If you think about share repurchases for a minute, over the last three years, we've returned about $400 million in share repurchases. The range that we provided, that $300 million-$500 million, puts us squarely within that range. This year, we have a line of sight where we could actually give record return of cash to our shareholders simply with the share repurchases. However, if you combine that with the increase in our dividend, the combination of those two sets us up really nicely to give record cash back to our shareholders. As far as the dividend, we're not thinking about the dividend as replacing share repurchases. We're thinking about it as being in addition to. We believe what that does, the combination of these two, it gives us a very balanced approach and a very disciplined approach to return excess cash to our shareholders through share repurchases and dividends. Great. I promised I wasn't going to ask a lot of Q1 questions. Tom, I think we should address one. Reported really strong quarter to date results this morning as estimates for the quarter. It implies quite a bit of deceleration in the back half. How are you thinking about what we've laid out today, and the guidance that we've provided for the back half of the year? First of all, we're thrilled with the start. We put up a two-year stack that we haven't seen in recent memory, double-digit two-year stack, very pleased with that. As we look at Q2 and Q3, it's a very unusual timeframe for us to be lapping. If you remember last year, we ran a +7 in Q2, we ran a +10 in Q3, a lot of things were very abnormal. You had massive shifts in consumer behavior. We had a big shift into DIY, which drove our sales in those two quarters. Certain categories like batteries and appearance chemicals did extremely well. I would say it's just difficult to predict what's going to happen in the second and third quarter of this year at this point. We're about to lap the stimulus initiative that came into play, actually tomorrow. A lot of things were at play. Some traditional competitors that we have were kind of out of business for several weeks. We're really optimistic about the performance that we've had so far year to date. It's just very early in the year. We're looking at our performance on in-stock and meeting customer needs every single day right now. Should the demand continue the way it's been going, we'll certainly be in a position to update the back half of the year sales performance, but, at this stage, we feel very good about our guide, and we'll update you in our normal cycle. Okay. Well, Jeff, while we're on guidance, top line, bottom line increases to the full-year, yet you pulled back on your free cash flow guidance. Can you give them a little additional color on your thoughts there? Yeah, sure. We've had a couple of announcements. Tom, you just talked about the revision to the guidance as well as the preliminary results for Q1, and we're obviously thrilled about what we're seeing on a preliminary basis so far this year. In addition, we also announced that we're expanding our market presence into California, with the conversion of the 109 Pep Boys locations throughout the state of California. We think both of these initiatives are going to contribute to operating cash flow. There's no doubt in our mind that we'll get operating cash flow through both of the announcements that we've talked about here this morning. However, the entry into the California market is going to require a fairly significant one-time investment. We need to convert all 109 Pep Boys locations into our Advance format. Those investments take place right up front. Part of the update and guidance that you saw was capital expenditures. Recall in February, we said our capital expenditures were going to range somewhere from $275 million-$325 million. We've updated that to $300 million-$350 million. As we sit here today with the investments we know we want to make into the California expansion, we believe we're going to be on the high side of that new range. Closer to the $350 million in capital expenditures. As a result of that, we wanted to make sure we were being prudent in terms of our guidance with free cash flow. Great. Tom, you commented on lapping stimulus tomorrow. What do you think is driving our strong start this year in 2021 and the momentum for the industry? Sure. Well, at the industry level, as we said in our release this morning, for sure stimulus has benefited the industry. We had a real winter this year, really the first time in a long time that we've had a real winter and given our northern geographies, we benefited from that. People are starting to get back on the road again, which is awesome, starting to get out to restaurants. They're starting to do the things that they normally do in their life. All three of those factors we believe had a benefit to the entire industry. From an Advance standpoint, we continue to gain market share and, that's on both sides of the house. You heard from Jason and from Bob. On the DIY side, without a doubt, DieHard has been a share driver for us. The brand is doing extremely well. It's ahead of expectation. It's helping us drive awareness for the Advance and our loyalty platform, Speed Perks, continuing to enable us to drive share of wallet, on the DIY side. We feel very good about DIY performance. On pro, it's really what Bob spoke about, the right part in the right place at the right time. Our availability continues to improve. Our close rate is improving. We're really leveraging the entire assortment at the enterprise level. As the pro business opens up, like right now, it should give us some real tailwinds, as people get back on the road and categories like brakes as an example. Overall, very pleased with the start and we're confident we'll continue the momentum and perform at or above the market, which is our goal. Great. We've got that question a couple of times. How do you define the market? As you look forward with a more normal environment, people getting vaccinated, et cetera, us to continue to grow share, how do you view that for this year and over the next three years for our outlook? First of all, I think what we laid out in our presentation, what we feel great about. The ACA estimate, some would say their estimate for 2020 is low, the -7% decline. I think most industry experts would say the industry did decline last year. Obviously, we grew, but overall, the industry declined a little bit, primarily due to the professional side. As we look at the long-term drivers of demand in the industry, we called out three of them. In addition, GDP is obviously a driver of demand as well, which is looking favorable for the U.S. for the balance of the year, as you all know. That total car parc, vehicles in the sweet spot, and miles driven are all very important variables. Over the next three years, those are all very positive variables. That's why we feel very confident that that 3%-4% number, ACA has 4%, we feel pretty good about that number. It is a number that we can count on. That's why we're pegging our revenue growth on top of that. What Jeff showed was a low of 2% at the industry level. We would perform above that on our low estimate of 3% net sales. On the high of four, which was the ACA estimate, by the way, we would expect to grow something like 6%, which is a combination of four on the comp sales side and two points of incremental growth from new stores. Pretty exciting time to be in the automotive aftermarket. All of the demand drivers look positive for the next three years. Great. I've gotten a couple texts about confidence and how the management team looks fully brought together. What risks do you see in our ability to perform at or above the market that you just spoke to? Well, I've never felt better about my leadership team than I feel today. I think you got a good sense of the quality of our leadership team through the presentation. It's taken a couple of years to get us to the place that we are. We have a terrific leadership team here at Advance. I also feel good about the way our frontline team members are performing. We've been very focused on our frontline organization, both in the stores and in the supply chain to continue to improve there. These people, they put on a mask every single day. They got out into the marketplace. They helped our customers solve problems when they really needed it. Our supply chain team got the parts to us when they needed to. I think the biggest risks we have at this stage are really external. A little bit of the commentary earlier surrounding the balance of the year, there's still a lot of uncertainty out there. There's uncertainty surrounding the pandemic. Canada just got shut down for a couple of weeks, as all of you know. There's new variants coming out. Some of those uncontrollable factors are still risks for us. Obviously, you've got things like wage inflation being discussed in the White House. Those are things that we're concerned about. Overall, our ability to execute the plan that we just laid out, we're very confident in our ability to execute that plan. That keeps us all pretty excited and driving our agenda. Great. Jeff, you mentioned the expansion into California. How are you thinking about expansion over the next two to three years, greenfield versus additional lease acquisitions like we announced recently? Yeah. We've talked about this a little bit before in terms of our new store opening strategy, and we're really excited about what we're doing with the transition of the Pep Boys stores into Advance Auto Parts. We've taken a very strategic approach as we're thinking about NSOs and expanding, whether it's in areas where we already have density and we want to do tuck-ins to ensure we continue to have that density and continue to have the market share, or expanding into new areas such as California. We're looking at it very strategically. We know we can't go into an area where we don't have a lot of stores and pick somewhere out west. In Phoenix, Arizona, you can't drop in three stores. We have to go in with density. We have to leverage the marketing investments that we're making. We're also looking at it from our supply chain. We're looking at, okay, do we have a distribution center in the Southwest that we can continue to leverage? Maybe rather than shutting that down, which might have been a consideration in the past, because we're going to be having more stores that are tied to that distribution center, we then have a different approach towards the distribution center. It's a much more holistic approach into the market, and we're going to be very strategic. What we're thinking about it as more of an organic, as we sit here today, NSO approach. We don't have any current acquisitions lined up. It's not to say we wouldn't do it, but it would have to be something that we could execute flawlessly. That's the approach that we're going to be taking over the next several years, but we're really excited to be back into the business of opening stores versus closing stores. You heard Mike talk about really getting the structural costs out of the field, and we've achieved that. We're back into opening new stores. We got a great kickstart with our work with Pep Boys and moving into the California market, and we're going to continue with that momentum. That's great. We've got some questions about DCs. We've closed a couple over the last several years as we look to grow. Are we comfortable with the current footprint? Will we need to add, close, consolidate our current DC footprint to capitalize on the growth Jeff talked about? Yeah, this is a good one to reference in terms of after the pandemic, what's the world going to be like? We had a plan going into the pandemic, and then all of a sudden, we started to see some pretty significant growth that was in excess of what our original strategic business plan was. I can tell you we did not plan 22% growth in the first quarter of this year, which has implications for our distribution center network. We're going to manage that situation very closely and monitor what's happening here. Obviously, if we continue to grow the way that we've been growing on a two-year stack, the plans that we have for DC consolidation are going to be refined. That's really the short answer there. It's a pretty dynamic situation that we're going to monitor. Reuben's really got the DCs performing at a much better level than they have been performing or had been performing in the past. We've got too many DCs. In some situations, we actually have capacity challenges right now. We're going to watch it very closely and see how the next couple of quarters really unfolds. Great. Jeff, we talked about CapEx over the next three years. There's some questions about the level of CapEx and it coming down or not coming down very much with the low end being $275 million. How do you think about the cadence over the three years and thoughts of why we're not pulling that back more? Sure. We have some transformational programs that obviously have capital expenditures associated with them. Several of these are going to be completed in 2021 and 2022. There were also a number of transformational initiatives, you saw it in supply chain, for example, that's going to continue into 2023 and beyond. When you couple that with what we just talked about in terms of NSOs, we think we've got the right targeted level of capital expenditures over the next three years. Having said that, I want to be clear. A process that we put in a couple of years ago, we're going to continue with into 2021 and beyond. That is, we look at every single capital expenditure request and make sure it's giving us the highest levels of return. If we're not getting the returns, if we're not seeing the metrics that we would expect, we're not going to approve it. It's a process, like I said, that's been in place for a while, and it's going to continue to be in place. We're going to be extremely disciplined with our capital expenditures over the next three years. As we sit here right now, we think we've got the right targeted level. Great. Going back to top line. Some questions about our geographic footprint. We've talked a lot about the differential in top and bottom-performing regions. We've got some questions about the necessity of those, what have been bottom-performing geographies in our confidence in the longer-term outlook and our ability to grow at or above market. Well, first of all, I'll start with the short term, which is last year we dealt with a lot of challenges in the Northeast and Mid-Atlantic regions of the country. As we expected, they're coming back with a vengeance here now. I mean, we're beginning to see the Northeast leading the country in terms of our overall growth rate in recent weeks. That we expect to continue as they lap some very challenging time frames in those large urban markets, right? Like a New York or a Boston or D.C., where the stay-at-home orders and the miles driven decline much higher than the rest of the country. In the short term, our geographic footprint is really helpful for us in terms of recovering. I think over the long term, we look at where is the vehicle population moving, what's going to happen with VIO by state, by geography, how dense is our store base in each of those areas, and we will be very thoughtful and surgical about where we add new stores accordingly. Obviously, we're going to go where the growth is. We've got a differential approach based on whether we have a high-share market where we've got a lot of density, like a Boston or New York or Raleigh, North Carolina, versus a low-share market like a Dallas or a Phoenix. New stores are now part of our plan, as you heard from Mike Creedon. Our team is so excited about it. They're sending us one picture after another as we open new stores. We're very excited about the opportunity we have to open new stores, having kind of addressed the fundamental challenge, which was growing the comp store sales of the stores that we have. I was going to go to margins next, but I'm going to sneak this one in because we've got a few times about our, you talked about our diversified assets, and we're not all consolidated and integrating everything. Talking about our go-to market, how do those differentiated assets really add to that, and how do you think about going into market with a Worldpac versus our traditional hybrid box Advance store? Well, as we said in our presentation, we put the customer at the center of everything we do, and we have to make sure that we think about both the DIY consumer and the professional installer. You heard Jay sort of describe how, in some cases, a DIY consumer is also taking their vehicle to a professional installer for more difficult jobs, obviously. Our asset base, we look at where can we leverage scale as a company. You think about our catalog or our supply chain or our back office. Where we can leverage scale, we're going to do that to obviously drive top line and get margin expansion. There's multiple examples of that. Probably the best one that we illustrated is the catalog. We want to be able to see demand at a market level. You go into a market and every lookup that comes into our system, whether that's a DIYer looking at a phone, a professional installer in a garage, one of our team members in a store where a customer comes in, we're able to aggregate that demand and appropriately leverage our enterprise assortment to assort parts throughout our network. On the fulfillment side of the house, we do have a diversified asset base. We've got obviously the hybrid box, which we call Advance, which is a DIY and pro box. They do both like some of our competitors. Then we have Worldpac, where the Worldpac team gets up every single morning thinking about that professional installer, in particular, a higher-end garage that services a BMW, a Mercedes-Benz, et cetera, and their system is engineered around that. They've got a high selection of original equipment parts that you heard Bob describe, which is very unique within our industry. We're able to leverage-That assortment inside of Advance as well. We're able to serve those customers the way that they want to be served. Obviously, the Carquest independents play a very unique role in our system. We love our independents. These are owners. They sweat the auto parts industry. They help us with our agenda, and they're particularly effective in a rural market, where they're very connected to their community and to their customers. We're leveraging our scale on the one side of the house, and where it makes sense to be focused with a very clear offering that the customer wants to be served in a unique way, we've got a diverse asset base to serve those customers how they want to be served. Perfect. We'll move on to margin, Jeff. There are some questions about the cadence over 2021 through 2023 and that margin expansion, but also if you can touch on the SG&A. We, over the last several years, have talked about four pillars. Sales and profit per store was separated, SG&A, productivity. Today it looks like you combined those, and they're just looking for clarity on your thoughts behind that. Sure. First of all, those are absolutely two separate margin expansion tiers. You heard Mike talk about sales and profit per store. He's laser-focused on taking out waste out of the store, taking out unproductive work, removing costs. That's something that's going to be ongoing. We're never going to stop looking for ways to be more efficient in our stores, looking for ways to take out costs that we don't need to have in our stores. I also talked about several initiatives directly in SG&A. We talked about the back office integration, whether it's the ERP or the HR systems, the global capability center, what have you. Both of these are our fixed cost takeouts. They have some similarities associated with them. If you think about things like the safety initiative, that really spans across the enterprise. Obviously some of that goes into gross margin with the supply chain, but that's in the stores, that's here at the headquarters. That's a safety initiative where we can take costs throughout the enterprise. What we wanted to do is provide a clearer picture, because most of this is in SG&A, a clearer picture of the impacts these initiatives will have on SG&A. That was the reason we put them together on the waterfall chart, is to be able to give a better illustration of what we think it'll contribute in terms of SG&A, as well as the leverage that we'll get. When you're taking out those fixed costs, as we continue to grow the revenue, it has a very different leverage depending on where we are in that growth journey on the top line. That's why we put those two together, but they're absolutely two separate initiatives. All right. Tom, supply chain. Some thought it might have been a little bit of a larger opportunity than what Jeff laid out over the next three years in terms of cost takeout. Can you provide additional clarity on our expectations for supply chain productivity? Well, nothing's really changed in terms of the opportunity there. We did get leverage on supply chain in 2020. It was the first time we had leverage in a long time, certainly since I've been here. We did get productivity out of supply chain last year. We showed, I think, 130-1 80 basis points of margin expansion for supply chain. The big initiatives that we have in there, warehouse management system implementation, cross-banner, Worldpac. We're going to drive some significant savings from that in the next year and a half. As we said on the presentation, what that's enabled is two other big initiatives, the tiering of our supply chain network, and also our in-market fulfillment, where we've got literally over 10,000 vehicles that we're going to be optimizing through various means. We expect that 130 - 180 in the next three years. There's obviously further savings as we illustrated on the chart, beyond 2023. We're very happy with our execution on supply chain, and it's a big driver of our margin expansion in the next three years. Great. This one you may both want to comment on. We're getting some questions on category management. Jeff, you talked about 180-200 basis points of expansion. Among the three tiers, you called out MCO, you called out own brand and pricing. With expansion of Carquest or DieHard, does that replace national brands? How that plays out within the category management. Sure. I'll kick it off. In terms of category management in general, we've had the three tiers, so to speak. We've had material cost optimization, which is an ongoing effort to work with our vendor partners on a category by category basis and make sure we're taking out any unnecessary costs, but still maintaining the high level of quality, then obviously getting the best price. Then we have the own brand strategy, I'll talk about that in a second, as well as pricing. Of those three, we do think that the own brand and the pricing will be the most significant contributors to the range that you saw on that waterfall chart earlier. Specific to own brands, DieHard actually replaced an own brand. From the pure battery standpoint, that didn't really have any change in terms of the national brands that we carry today. Now we're going to continue to expand DieHard into other categories. We mentioned that earlier. It's going to be very strategic. We're going to be very thoughtful, and we're going to make sure it makes sense. There are situations where it could be replacing. There's also situations where it could be an addition to. For example, in Carquest, we're talking about expanding the Carquest brand, which is already a brand that's out there. It's already a brand that our professional customers like. There are situations, depending on the category, again, this is a category by category assessment. There are categories where it will replace a national brand. There are other categories where it may not. When we look at a category, we want to understand the offering that we're giving to the customer. If you think about a good, better, best. We may have categories that we don't have a best, and we can do that with Carquest and vice versa. It's really going to depend category by category, and that's why we're going through it very strategically. That's also why the own brand strategy is something that takes time. We have to be very strategic on how we assess, how it's going to introduce into that category, and then physically how we get that product in and if we have to take a product out. Perfect. I think you covered it. SG&A productivity. You've talked about some things that we've heard about before, some things were new, corporate restructure, voluntary retirement. What is the impact of the old initiative versus new ones that you spoke to today? Sure. Let me just talk more directly about the restructuring. I think there's a couple of things that were impacting that. Some of this we've known for some time, and some of it is new. Let me start with what we've known. We've known that we've had to take blocks, challenges from our team members and make it easier for them to work. They've been telling us repeatedly, through formal and informal channels, through organizational health surveys, that we just need to take the clutter out. We need to be able to focus on the things that matter most for the organization. We've had to focus on streamlining the organization, and that goes throughout, specifically as it relates to our back office. We've known that. We've also learned some things through managing in a COVID environment. We've realized that we can work remotely. We've realized that we can work more flexibly. We've taken that learning, and we've realized we don't need the back-office footprint that we have today. Taking all that, part of that has then culminated into a corporate restructuring as well as a voluntary retirement program. We've executed against these, and on a full-year run rate, we believe that's going to take about $30 million of cost out of our corporate functions. We're getting a couple of follow-ups on, we might have missed the cadence of margin question in terms of, you just talked about the restructure costs. How would you balance the 10.5%-12.5% over the next three years? Yeah. It's going to vary by initiative. It's going to vary by the pillars. I'll give you some examples. Sales and profit per store. It's an ongoing initiative. It's never going to end. It's going to be gradual throughout the time. Pricing. Pricing is something we're implementing. That will be a little bit faster. Own brands. That's going to be slower. It's going to be more balanced. You're going to see that more even through over time. There's other initiatives where we're taking costs out. I just mentioned the restructuring. Already happened. We're going to see the savings over a full-year run rate. Obviously, that won't be all in 2021, but that's more front-end loaded. We're going to get a balance of longer-term initiatives that are going to either reduce those costs or improve our profitability over time, and you're going to see some near-term actions. That's what we were attempting to lay out in terms of the inputs of executing against those transformational projects that you saw on one of the previous slides. It's going to be a balance of both. Perfect. In line with that, Tom, marketing. We've significantly upgraded, changed our marketing approach over the last 12-1 8 months. How are you thinking about marketing spend, measuring the effectiveness of marketing and continuing to invest there? We've talked a lot about the fact that we're well behind our peers on awareness nationally, which is something that is a big opportunity for us. We have invested in marketing to increase our both unaided and aided awareness. We work very closely with our suppliers on this. I have to reinforce the importance of our suppliers are really central to our success. They help us with product innovation, which we've brought to the market. In the case of DieHard, with an Enhanced Flooded Battery. I can give other examples, but also in terms of marketing their brands in the Advance stores. We're going to continue to work very closely with our suppliers to differentiate ourselves. We measure marketing spend very discreetly. No matter what it is we're doing, whether we've got something on radio or something on TV or a paid search campaign, we measure it by initiative, and we have a very clear threshold for performance. It's measured on cost per incremental dollar. We look for how do we get at least basically $0.30 cost per incremental dollar. We want to make sure that we're below that threshold. The lower the number, the better. We're going to continue to invest in those initiatives that give us below that threshold, and we're going to stop doing the ones that are above. Overall, our marketing investments have paid off extremely well, as evidenced by the 22% comp in the first quarter. We're going to continue to use marketing to drive our top-line growth as opposed to discounting and some of the other things that are more easy to replicate. Perfect. Jeff, getting some questions on investment grade rating, the commitment there. Our leverage ratios obviously come down. How do you think about adding debt, doing additional buybacks, and how that factors into your capital allocation structure you laid out? Yeah, sure. We took a number of actions in 2020, quite frankly, we took advantage of the debt market when we were seeing record low coupon rates. We took out some older debt. We added some new debt, overall, our average coupon is much lower than what it was pre-pandemic. A couple things. We feel really good about that in terms of our cost of borrowing, and we feel really good about our maturity profile. We've got it set up very nicely to cadence over the next 10 years and beyond. Right now, we don't anticipate making any changes to our debt structure. We feel really good about both the cost of the borrowing as well as the timing of any renewals. Perfect. We've got a couple about margin opportunity beyond 2023, also on, we've talked about structural versus our peers' gap. Any color you can provide on structural versus competitive dynamics with the gap we've talked about through 2023 and additional upside, how they should think about that beyond? You want to. Yeah, sure. First of all, we're going to continue to grow margins beyond 2023. We wanted to give you a much deeper view in terms of the next three years and where we think we're going to be in 2023. Taking out costs, looking for ways to improve, that's not going to end. We believe we have margin opportunities beyond 2023. As it relates to structural, that hasn't changed. We have a different customer mix than in some of our peers. We're 60% professional. We lease. A lot of our competitors own. That's not going to change. We're very comfortable with our strategy as we're entering into new markets, and we're still looking towards leasing. Those structural items aren't going to change. Those are still going to be there today. They're going to be there in 2023 and beyond. We do believe we have margin expansion opportunities beyond 2023. Great. There's been a lot of noise in the market, in the news on electric vehicles and the impact to our industry. How are we thinking about it, planning for it, and preparing Advance for the future? Well, first of all, the shift to electric vehicles is one of the biggest and most transformative shifts in the automotive sector ever. As far as we're concerned, we're going to be very focused on adapting appropriately. We're very committed to environmental sustainability as a company, and we're going to adapt. There's a couple of things to consider. This is going to take some time. We laid that out in the presentation, that the capital requirements, the size of the car parc, the infrastructure requirements, it's going to take time for the pure BE vehicles to attain the level of penetration that would make it a significant impact in our industry. Having said that, we've got DieHard as a brand, as an asset. It stands for power. The top 15 BE vehicles all have a 12-V battery in them. Many would say that the electric vehicle of the future is going to require more power, whether that's autonomous features or computerization or gaming features, safety, redundancy, all of those things. It is possible it's going to need more than a 12-V battery in the future. Obviously, every electric vehicle has brakes, it has wipers. We sell a lot of the things that electrical vehicles have. In addition, we've got 6,000 stores, which are all over the country. This at the moment is pretty much a regional story. You've got high concentration of BEVs in certain markets such as L.A.. It gives us a chance to experiment with our expansion into California with how we might approach this going forward. This is a resilient industry. The automotive aftermarket's been around for a long time. It's seen a lot of technology changes over the years. Given our focus on environmental sustainability and our desire to really differentiate ourselves in this space, we fully intend to adapt and our ability to serve all the makes and models that are on the road, whether they're internal combustion engines, hybrids, or electric, is something that we're going to continue to make sure that we're capable of doing. Perfect. We do have one on the waterfall for margin, Jeff, that we haven't touched on, 300 basis points of inflation headwinds. Can you break that down and provide some clarity on that? Yeah, sure. We called out a number of potential headwinds over the next several years. We talked about wage inflation, medical costs, transportation costs, including fuel. We've modeled for these anywhere from 2% - 5%. This is one of those that's a little more challenging. We certainly don't know what wages are going to do over the long term. As an example, this is the largest one. Wage is certainly the most significant impact in terms of inflationary factors that we're modeling. In addition to that, I think it's important to note that the majority of that wage inflation will manifest itself in SG&A. That's simply because that's where most of our wage costs are. We have obviously some with our supply chain, which would sit in gross margin, but the vast majority of what we've modeled and what you saw in that waterfall chart will end up in SG&A. That's sort of the way we're thinking about it as we sit here today. Perfect. We're getting short on time, but I'm going to try and sneak one in on e-commerce and our digital investments. We have some questions on that. We've invested quite a bit that are differentiators for us, and they didn't hear much about it. How do you think about that and positioning us for a competitive advantage in the future? Well, first of all, we've invested about half of our CapEx, a little over half of our CapEx for the last three years, in digital, e-commerce, technology-related projects. We're going to continue to do that. We absolutely believe that the consumer is continually shifting to more digital. I think we've said in the past, the number of customer decision journeys that start online is now north of 80%. Being there where the customer needs us, particularly on their phone. Our app has been an overwhelming success. The amount of downloads that we're getting on our app continues to grow. Our ability to leverage digital capabilities on the professional side is also a huge priority for us. You're going to continue to see us invest a significant amount of our CapEx and our OpEx in our digital e-commerce capabilities, because that's where the consumer is going, and we want to be there for them. We offer something that it's hard for a pure online retailer to do. We have speed, convenience, and trusted advice. Those three things put together make it difficult to replicate for an online retailer. We can get a part to the customer in 30 minutes if they want to come to our store, or under three hours if they want it to their house. Very difficult for an online retailer to do that in an auto parts segment. We want to continue to build that moat and continue to differentiate ourselves in ways that our customers really care about. Great. We are running short on time, so Melanie and I are tracking all the questions. If you've submitted one and we have not been able to address it, we will be in touch with you. We may already have a call scheduled. We look forward to the follow-ups and continuing the dialogue. With that, Tom, I'll let you close out. Sure. I'll stand up for this. I just want to say thank you once again to all of our team members and independent partners out there who did so much for us during the pandemic. We don't have jobs if it weren't for you, so we just want to say thank you to every single one of you for everything you do for Advance Auto Parts. Obviously, to all of our investors and research analysts that joined us today, we really appreciate you spending time with us. We think we've got a great future ahead here. Top quartile total shareholder return driven by a real ownership culture in the organization, the ability to grow above the market. What we believe is a unique margin expansion opportunity as we laid out today. Of course, a substantial return of excess cash back to you. Thanks for joining us, and we look forward to catching up with you soon.