SEGMENT REPORTING

6 Months Ended

Jun. 30, 2025

Segment Reporting

Segment reporting

NOTE 2 – SEGMENT REPORTING

The Company conducts its operations in the U.S., Canada, and Mexico, and collectively this represents its single operating segment, referred to as its automotive aftermarket parts segment, which is its only reportable segment.  There have been no changes in the determination of segmentation or the measurements used to determine reported segment net income during the six months ended June 30, 2025.  Net income is utilized by the chief operating decision maker to evaluate budget to actual results, as well as trends over time, to allocate resources, and evaluate performance.  The measure of segment assets is reported as “Total assets” on the accompanying Condensed Consolidated Balance Sheets as of June 30, 2025, and December 31, 2024.  At June 30, 2025, and December 31, 2024, the Company’s consolidated long-lived assets were located primarily in the United States and consolidated revenue was primarily generated within the United States for the three and six months ended June 30, 2025 and 2024, with immaterial assets and revenues associated with international operations.  

The table below identifies the Company’s significant segment expenses regularly provided to the chief operating decision maker that are included in reported segment profit or loss, which is consolidated net income, for the three and six months ended June 30, 2025 and 2024 (in thousands):

		For the Three Months Ended				For the Six Months Ended
		June 30,				June 30,
		2025		2024		2025		2024
Automotive aftermarket parts segment:
Sales		$	4,525,058	$	4,272,201	$	8,661,982	$	8,248,441
Cost of goods sold, including warehouse and distribution expenses			2,198,520		2,104,141		4,213,959		4,046,209
Gross profit			2,326,538		2,168,060		4,448,023		4,202,232
Less:	Team Member compensation expense (1)		895,688		824,280		1,759,232		1,640,777
	Rent expense (2)		115,090		106,229		228,250		211,016
	Depreciation and amortization expense		101,492		91,556		200,502		180,253
	Advertising expense		24,894		27,681		44,828		45,848
	Other segment items (3)		270,582		251,927		554,504		500,413
	Interest expense		57,337		54,831		114,901		111,979
	Provision for income taxes		192,860		188,708		338,726		341,860
Consolidated net income		$	668,595	$	622,848	$	1,207,080	$	1,170,086

⁽¹⁾ Team Member compensation expense derived from selling, general and administrative expenses included in Segment net income includes payroll expense, benefits and withholdings expense, share-based compensation expense, and nonqualified deferred compensation expense.

⁽²⁾ Rent expense derived from selling, general and administrative expenses included in Segment net income includes rent and common area maintenance expense.

⁽³⁾ Other segment items included in Segment net income includes vehicle expenses, utilities expense, real estate taxes and insurance expense, bad debt and banking fees expense, interest income, and other operating expenses.