The company faces interest rate risk from variable-rate debt (revolving credit and commercial paper). A 10% interest rate increase could negatively impact pre-tax earnings and cash flow. Foreign currency risk exists from Mexican peso and Canadian dollar transactions, potentially leading to losses if exchange rates fluctuate. Economic factors like inflation, consumer spending, and fuel costs could negatively impact sales and profitability. The company's ability to meet debt covenants is also a risk.
Financial Upside
The company's sales increased 4% in Q3 2024 and 5% in the first nine months of 2024, driven by new store openings and the Vast Auto acquisition. Comparable store sales also increased, indicating growth in existing locations. Gross profit increased, though the percentage of sales remained flat. The company's share repurchase program remains active, potentially increasing shareholder value.
