The company expanded its Automotive distribution network by adding 173 net new stores during 2023, demonstrating a commitment to growth and market presence. The breakdown includes distribution centers, company-owned stores, and independently-owned stores across North America, Europe, and Australasia.

The company's strategic pricing and sourcing initiatives, including enhanced pricing technology and efficient sourcing strategies, contributed to a 90 basis point improvement in gross margin. These initiatives are designed to enhance competitiveness and profitability.

In February 2024, the company announced a global restructuring plan designed to better align assets and improve efficiency. This includes a voluntary retirement offer in the U.S. and optimization of distribution centers, stores, and other facilities. The company expects to incur costs between $100 million and $200 million related to these efforts.

Management's strategic financial objectives include revenue growth exceeding market growth, continuously improving operating margins, maintaining a strong balance sheet and cash flows, and effective capital allocation. These objectives are intended to align with the company's mission and drive value for all stakeholders.

The company is making global investments in information technology and supply chain improvements to support ongoing strategic initiatives and improve product availability. These investments are expected to impact costs and improve operating leverage.

The company acknowledges the potential impact of supply chain disruptions and geopolitical conflicts on its business and has implemented measures to mitigate these risks. These measures include maintaining close relationships with suppliers and monitoring global events.

The company acknowledges that the addition of electric vehicles, hybrid vehicles, ride sharing services, alternative transportation means, and autonomously driven vehicles, and future legislation related thereto, may result in reduced need for parts.

The company identifies the impact of geopolitical conflicts, including the conflict between Russia and Ukraine and the conflict in the Gaza strip, as potential risks that could adversely impact its business. These include increased inflation, disruptions to technology infrastructure through cyberattacks, and disruptions in global supply chains.

The company's future success depends on the continued services and performance of key management personnel. In addition, there has recently been an increase in workers exercising their right to form or join a union, particularly in the U.S., which could adversely impact the company's culture, increase operating costs and otherwise disrupt the business and operations.

The company acknowledges that the sale of automotive and industrial parts is highly competitive and impacted by many factors, including name recognition, product availability, customer service, changing customer preferences, store location, and pricing pressures.

Increased competition among distributors of automotive and industrial parts, including increased availability among digital and e-commerce providers across the markets in which the company does business, could cause a material adverse effect on the company's results of operations.

The automotive aftermarket industry continues to experience consolidation. Consolidation among the company's competitors could further enhance their financial position, provide them with the ability to offer more competitive prices to customers for whom the company competes, take advantage of acquisitions and other opportunities more readily.

SG&A expenses represent 26.7% of net sales in 2023 compared to 26.1% of net sales in 2022. The increase is primarily driven by planned increases in personnel costs due to wage inflation and global investments in information technology to support ongoing strategic initiatives.

In February 2024, the company approved and announced a global restructuring designed to better align assets and further improve the efficiency of the business. This initiative includes an announced voluntary retirement offer in the U.S., along with a rationalization and optimization of certain distribution centers, stores and other facilities.

The company is investing in its supply chain to ensure it has the right assortment for customers, positioned closer to their places of business so that it can distribute product at a lower cost.

The company is making global investments in information technology to support ongoing strategic initiatives. These investments include improving the digital experience for employees and customers, enhancing pricing technology, increasing the automation used in distribution centers, and modernizing payment platforms.

The company's information security program is managed by a dedicated Chief Information Security Officer (CISO). The CISO provides periodic reports and the company actively engages with key vendors, industry participants, and law enforcement communities for benchmarking and awareness of best practices.

The company recognizes the growing demand for business-to-business and business-to-customer e-commerce options and solutions and acknowledges that it could lose business if it fails to provide the e-commerce options and solutions its customers wish to use.

Net cash used in investing activities included $513 million in capital expenditures to improve the company's supply chain, facilities, and technology environment.

In 2023, the company announced a 6% increase in its regular quarterly cash dividend, marking the 67th consecutive year of increased dividends paid to shareholders.

The company repurchased approximately 1.8 million shares of its common stock for an aggregate $261 million in 2023 and expects to remain active in its share repurchase program.

The company is committed to the development of sustainable and efficient operations and business practices that enhance and protect its people, its communities and its planet. The goal is to generate above-market returns while aligning business practices to support the interests of stakeholders.

The company seeks to promote a diverse, equitable and inclusive workplace and to ensure the health, safety and well-being of all employees. It emphasizes giving back and uplifting the communities in which it operates through partnerships and volunteer efforts.

The Nominating and ESG Committee of the Board of Directors oversees the company's sustainability initiatives which aim to deliver long-term value for shareholders and all stakeholders.

The company expects macroeconomic headwinds to result in continued pressure in 2024. In particular, its customers are facing economic challenges from persistent cost and wage inflation, heightened interest rates and general economic uncertainty.

The company's 2024 Automotive net sales growth includes the negative impact of new supplier incentives that will benefit its customers. It negotiated these as part of changing certain supplier relationships.

The company expects continued revenue and earnings growth in 2024, despite uncertain economic conditions. Positive trends related to miles driven, aging vehicles and continued limited new car inventory remain supportive of the sustained demand for its global Automotive business.