EquityResearch12February2019COREBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE24.Restricted-InternalReadingBetweenthe“Hard”LinesDecember/January:AutoPartRetailersDuetothemostrecentgovernmentshutdown,ourmonthlyreporthasbeendelayedaspublicationsofmacroeconomicdatawereunavailableuntilrecently.ThisreporthasconsolidatedthemostupdateddatafromDecemberandJanuaryreleases.Latestmacroeconomicdatapoints:InNovember2018,USVehicleMilesofTravelincreased0.3%to258.5millionmiles.RetailsalesbyU.S.CensusNAICScodeforautomotiveparts,accessories&tirestoresincreased2.7%onanunadjustedbasisto$7.64billionasofNovember2018.Lightvehicleretailsaleshavedeclined(2.8)%Y/Yto16.7millioninJanuary.Gasprices(ex.Diesel)havecontinuedtodeclineY/Y.Newsworthyhighlights:MNROreported3Q19results,ascompstoresalesincreased3.3%drivenbytires+3%andbrakes+12%.BarclaysEuropeanAutos&AutoPartsinitiatedontheEuropeanAutoPartsandTireMakerssub-sector(CashisKing,2/5/2019),BarclaysUSAutos&AutoPartsreviewedguidanceupdatesfromDetroit(Nottheguide-downspreemanywereexpecting,1/22/2019).WeupgradedAAPfromEWtoOW(AdvancingtoGo,Collecting$2051/7/2019)aswefeelconfidentastablebaseforoperationshasbeenestablishedwiththeabilitytofocusonvaluecreation.Weatherupdates:InDecember2018,allregionsexcludingtheWestandSouthwestexperiencedwarmertemperaturesthanlastyear.Everyregionalsoexperiencedmoreprecipitationaswell,withregionssuchastheSoutheast,Central,WestandSouthwestexperiencing100%+moreprecipitation.InJanuary,temperaturesweremixed,withcolderweatherintheEastNorthCentral,West,NorthwestandSouthwest,butwarmertemperaturesintheNortheast,Southeast,Central,WestNorthCentralandSouth.AllregionsexcepttheWestNorthCentralandNorthwestals...
