Financial Data and Key Metrics Changes - The company reported a 5.6% increase in comparable store sales for Q3 2025, with total sales increasing by $341 million [4][26] - Operating income increased by 9%, and diluted earnings per share rose by 12% [5] - The updated diluted earnings per share guidance is now in the range of $2.90 to $3.00, reflecting a year-over-year increase of 9% [13][14] - Free cash flow for the first nine months of 2025 was $1.2 billion, down from $1.7 billion in the same period in 2024 [28] Business Line Data and Key Metrics Changes - The professional business saw a comparable store sales increase of just over 10%, significantly contributing to overall sales growth [6][7] - DIY comparable store sales growth was in the low single digits, driven by average ticket benefits but partially offset by pressure on transaction counts [7][8] - Same-skew inflation during Q3 was just over 4%, impacting both professional and DIY segments [8] Market Data and Key Metrics Changes - The company updated its full-year comparable store sales guidance from 3%-4.5% to 4%-5% [10][11] - The effective tax rate for Q3 was 21.4%, slightly lower than the previous year's rate of 21.5% [26][28] Company Strategy and Development Direction - The company plans to open 225 to 235 net new stores in 2026, building on its growth in the U.S., Mexico, and Canada [23][50] - The focus remains on maintaining strong supplier relationships and managing risks associated with supplier health [19][60] - The company aims to provide exceptional service and industry-leading availability to continue gaining market share [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding consumer spending due to economic uncertainty but noted that DIY consumers are still willing to invest in vehicle maintenance [9][12] - The company remains optimistic about its ability to navigate the current tariff environment and maintain competitive pricing [11][17] - Management highlighted the importance of customer service and product availability in retaining and growing market share [12][18] Other Important Information - The company opened 55 net new stores in Q3, bringing the year-to-date total to 160 [22] - Capital expenditures for the first nine months of 2025 were $900 million, with a revised full-year guidance of $1.1-$1.2 billion [24][25] Q&A Session All Questions and Answers Question: Regarding the 4% same-skew inflation, will there be any residuals in the next quarters? - Management indicated that there may still be a tailwind from same-skew inflation moving into Q4 and Q1, but most adjustments needed have been made [34][35] Question: What has been observed historically regarding price elasticity, particularly on the DIY side? - Historically, larger ticket jobs can be deferred during economic shocks, but the company remains confident in the overall strength of both professional and DIY segments [36][37] Question: Is the elasticity function getting worse, and why wouldn't comps be higher than expected inflation? - Management noted that various factors, including weather and consumer behavior, contribute to the cautious outlook for comps, but they remain optimistic about overall trends [42][46] Question: Can you discuss the potential for U.S. store growth and international expansion? - Management expressed confidence in U.S. store growth potential and highlighted Mexico and Canada as significant opportunities for future expansion [47][50] Question: Are there notable differences in geographic performance due to weather patterns? - Management reported no material differences in regional performance during Q3, aligning with internal expectations [56] Question: What is the company's exposure to the First Brands situation? - The company indicated that First Brands represents a small portion of COGs, and they have multiple sourcing strategies in place to mitigate risks [58][60]