Seth Basham: All right. Thank you very much.
Operator: Thank you. The next question goes to Zach Fadem of Wells Fargo. Zach, please go ahead. Your line is open.
Zachary Fadem: Hey, good morning. So first of all, Shane, congrats on the first earnings call. So the question that, could you talk a bit about the game plan for growing your do-it-for-me business today, whether you think the current 60-40-ish do-it-for-me DIY mix is optimal? And then as you think about balancing growth and profitability, should we expect a culling of the business to remove less profitable customers or is there a plan to prioritize the topline over profitability, any color there?
Shane O’Kelly: Great. So let’s talk about those each in turn. First on growing the Pro, we certainly want to have the Pro be a prominent part of our growth and the way you do that is engagement in the market. It starts with the CPPs in the stores. Those are our store base Pro representatives, also our field-based representatives, our camps and so we’ve done some moves in terms of how we’re organizing that Pro part of our business under Junior Ward and so we’ve made some streamline moves and, in particular, as we get ready to divest Worldpac. So that will help us on the Pro side of the house and we’ll have that focus there. Obviously, it also means we got to have the right parts on hand for the Pros. In this business, you want to be first call and that’s where we’re aligning our efforts so that as our, as our Pro customers need product, they call us and we go ahead and get it.
As it relates to how we think about less profitable customers, I can just put this broadly under just an effort around asset assessment and utilization across the company. We just need to look at how we operate and where we operate and make rational decisions around where we can grow and grow profitably. And I don’t want to just do topline without the expense of contributing operating income, I think that’s important. So that’s what we’re looking — we’re looking to get Advance back on a trajectory of consistent profitable growth. And as we look at all of our assets, inclusive of our stores, our supply chain, how we merchandise and then who we sell to, I think it’s appropriate to make logical decisions about — about, with each of those about getting to that profitable growth.
Zachary Fadem: Got it. I appreciate the color there. And then I think you suggested that your operating margin is expected to grow in 2024, so just curious if you could talk a little bit about the makeup there in more detail with respect to top-line growth versus margin recovery versus structural change like taking Worldpac and other costs out of the business?
Tony Iskander: Yeah, I think it’s too soon to start talking about 2024 in terms of margin. You know, we’ll come back to you in February and provide you a lot of additional color. What we have said so far is, you know, the cost reduction program that we have announced today, that will benefit full run rate in 2024. So, but more to come in February as we continue down the strategic and operational review of our business.
Zachary Fadem: Got it. Thanks for the time.
Tony Iskander: Thank you.
Operator: Thank you. The next question goes to Priya Ohri-Gupta of Barclays. Priya, please go ahead, your line is open.
Unidentified Analyst: Hi. Thank you for taking our question. This is [Orges] (ph) in for Priya. We have a question in terms of the credit ratings. Are you considering soliciting a Fitch rating at this moment? Thank you.
Shane O’Kelly: Yeah. As we continue to assess our overall capital structure, we will always consider what makes the most sense for the business. You know if we decide to solicit a Fitch rating for public, we will announce that in the future. At this time, we are maintaining what we have today, we are focused on turning our business and we continue to improve our cash flow and working capital metrics that you’ve seen us announce this quarter.
Unidentified Analyst: Thank you.
Operator: Thank you. The next question goes to Michael Montani of Evercore ISI. Michael, please go ahead, your line is open.
Michael Montani: Hey, good morning. This is Mike Montani on for Greg Melich. Thanks for taking the questions. I just wanted to ask, first off, on the cash flow side, if you could discuss, you know, the plans to inflect that positive for the full year. I think you’re running about $150 million negative through the first three quarters. So it’s probably something simple, but how do you get that inflected positive in the fourth quarter?
Shane O’Kelly: Yeah, as you’ve seen over the last two quarters, we continue to generate positive cash flow each of those quarters. As we continue to focus on the business, focus on sales and our working capital, metrics continue to improve. We expect that to continue into Q4 at this time based on what we know and that’s what we are looking at based on the recovery of all of our working capital as well as higher sales that you’ve seen in Q2 and Q3.
Michael Montani: Got it. And then if I could just follow up on the sales line, you did mention some deterioration in the final period, was curious if you could discuss if that’s continued into the fourth quarter and also, if there’s any color in terms of what the DIY that slowed versus Pro or what would have driven this slowdown?
Shane O’Kelly: Yeah, we’re very conscious of the DIY consumer and the pressures that they’re facing. But as we started the fourth quarter, we’re actually tracking slightly better in the first four weeks, but we know that we have a challenging December ahead of us, given the lack of last year where we had a significantly colder period than we are expecting this year. But we continue to be very conscious of the DIY consumer and we expect Pro to continue to remain positive as well.
Michael Montani: Thank you.
Operator: Thank you. Our final question goes to Andrew [indiscernible] of Oppenheimer. Andrew, please go ahead, your line is open.
