Bret Jordan: Hey, good morning, guys. I guess coming into this with — coming into this — hey, good morning, this sort of clean, looking at the business with fresh eyes and, obviously, the perception has always been sort of a mash up of various supply chain systems. How close do you see this to being sort of consolidated to being a common supply chain across all of the stores ex-Worldpac? You know, we had real progress been made from a system standpoint.
Shane O’Kelly: You know, so the supply chain team is diligently on task for that. And for me that, you think about the five decisive actions we’ve covered that’s where my immediate focus is. Our pivot to supply chain shortly after that, and my sense is, we’ll come back to you on future calls on what the timeline looks like, but we’re working on it. It’s not something that will be done overnight, but confident that we can get to a unified supply chain for the company.
Bret Jordan: Okay. And then I guess on Worldpac, you know what do you see I guess a dis-synergy in the sale, were there common customers or sales to Advance that were a result of your having the Worldpac business that you might lose or is it relatively separate?
Shane O’Kelly: So it is a different business and it runs as a separate business. So I really don’t seek dis-synergies there, but what I see for us as we sell that business is a simplification of our focus. And going back to the fundamentals, we’re going to sell Auto Parts out of a blended box model. We think that’s a good recipe for success. And as we do that, Worldpac doesn’t fit in that future model, so we will explore the sales process, which we’re kicking off today.
Bret Jordan: Okay. And a quick housekeeping for Tom, what was the price contribution to comp, what was inflation versus traffic?
Tony Iskander: Yes, so I think that’s for Tony. Yes, so in terms of price inflation, we priced just enough to cover a portion of costs. So it was very minimal to our comp in the third quarter.
Bret Jordan: Okay, thanks.
Operator: Thank you. The next question goes to Scot Ciccarelli of Truist. Scott, please go ahead, your line is open.
Scot Ciccarelli: Good morning, guys. Scot Ciccarelli. I wanted to ask about the restatements under the — where there’s smoke there’s fire concept. What gives you guys confidence there aren’t bigger issues in your historical financials, because it seems like what you disclosed today was uncovered after a pretty short stint for the new finance team, so could we end up in a situation where more digging reveals more issues?
Tony Iskander: Thanks, Scot. Tony here. You know, remediating the material weakness is our top priority in finance and we continue to dig in and we are committed to getting this material weakness remediated and behind us as quick as possible. It is possible, but it is possible that — to not either. So, we’ll continue to share as we find more information, but we will keep you abreast of that material weakness remediation as well.
Scot Ciccarelli: Got it. And then can you repeat the comments you made on LIFO. Did your numbers this quarter actually include a sizable year-over-year benefit from LIFO. Is that what I heard?
Shane O’Kelly: That’s correct, Scot.
Scot Ciccarelli: Got it. Okay. Thank you, very much.
Operator: Thank you. The next question goes to Simeon Gutman of Morgan Stanley. Simeon, please go ahead. Your line is open.
Jacquelyn Sussman: Hey, guys. This is Jackie Sussman on for Simeon. Thanks so much for taking our question. You guys mentioned in your prepared remarks that some of the cost savings will go towards reinvesting to improve employee retention. In your view, has Advance kind of done enough to retain its best people and what are some areas to improve improvement that you see or conversely areas where you feel like you’re executing pretty well?
Shane O’Kelly: So as I’ve been in the field, I’m impressed with our frontline associates. Got energized team members engaging every day, doing their level best to take care of customers. What we found is in certain key positions in the company, where we were from a wage perspective was below where we want it to be. So we’ve started to make some of those investments and we see correspondingly where we make the investment, the turnover has reduced and so we think taking some of the monies from the cost reduction and putting that into wage will help further reduce turnover for key positions, but the initiative will extend beyond wage and as our team, our field team and our HR teams work together, we also think that training, career pathing, showing folks how they can develop over time with Advance, that’s all part of it as well.
And the idea is that for our frontline associates as they come in, they’re energized to be here and then they feel that they can have their career with the company and they can see where they can go. So that’s all part of the program that we’re putting together and the early read from early investments is that it’s doing exactly what we wanted to do.
Jacquelyn Sussman: Got you. That’s super helpful. And just one more kind of housekeeping question, you know regarding the cost savings that you mentioned. Where will that kind of fit in across the P&L, is that mostly on the SG&A side or almost on gross as well, I mean if you can give some color on that? Thank you.
Shane O’Kelly: Yeah. It’s predominantly in SG&A, you’ll see most of that savings come through there.
Jacquelyn Sussman: Great. Thanks so much.
Shane O’Kelly: Next year, of course. Yeah.
Operator: Thank you. The next question goes to Chris Bottiglieri of BNP Paribas. Chris, please go ahead. Your line is open.
Chris Bottiglieri: Hey, everybody, thanks for taking the questions. I was hoping you could elaborate more on this inventory write-down. I appreciate you guys are cleaning accounting up. I think it’s really great to see it’s someone like concerns for a while now, but this is all related like the capitalized supply chain costs that it has been growing for years and beyond kind of like the one-time write down, was there some over-earning in prior periods because of this adjustment. Just wanted to kind of understand what the impact is going forward?
