Advance Auto Parts boosts benefits, expands delivery options, slashes cap spending
Advance Auto Parts Inc. is now offering customers curbside pickup and same-delivery.
The delivery options were included in a business update from the auto parts/services retailer on the impact of COVID-19. Advance Auto is also providing emergency pay that includes additional paid sick time of 80 hours for full-time workers and 44 hours for part-time workers. Additionally, it’s offering employees a grant of up to $300 to help with basic living expenses during the pandemic, such as child-care costs.
With many drivers living in states with stay-at-home orders, Advance Auto has reduced store hours and strategically closed stores temporarily where it can service demand from an alternative location. In an effort to preserve cash, it has decreased its remaining capital spend for 2020 by over 50%, which is also driving a meaningful reduction in professional fees and contract labor spend associated with certain projects, the company said.
“Our decisions around capital spend reduction have been tactical in order to maintain the spend on projects we believe have the best return on investment,” said Tom Greco, president, and CEO of Advance Auto Parts.
The company is withdrawing the financial guidance for 2020 it provided on Feb. 18, and has suspended its share buyback program. Advance Auto drew down $500 million from an undrawn $1 billion revolving credit facility, which may be increased to $1.25 billion. As of April 4, the company had about $744 million of cash on hand.
Advance Auto’s same-store sales for the 12 weeks ended March 21 fell 3.2% from a year ago, but were down about 28% in each of the two following weeks.
"COVID-19 has had a greater impact on the company's professional business than DIY omnichannel and has been particularly acute in major urban markets such as New York, Detroit, and the San Francisco Bay Area," the company stated.