Welcome to the Advanced Auto Parts 4th Quarter 2013 Conference Call. Your lines have been placed on listen only until the question and answer session of today's call. This conference is being recorded. If you have any objections, you may disconnect at this time. Before we begin, Zaheed Mawani, Director of Investor Relations, will make a brief statement concerning forward looking statements that will be made on this call.
Good morning, and thank you for joining us on today's call. I'd like to remind you that our comments today contain forward looking statements we intend to be covered by and we claim the protection under the Safe Harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, will, plan, forecast, outlook or estimate and are subject to risks, uncertainties and assumptions that may cause our results to differ materially. Our comments today will also include certain non GAAP measures. Please refer to our earnings press release and accompanying financial statements issued today for important information and additional detail regarding these forward looking statements and the non GAAP measures referenced in today's call.
The company intends these forward looking statements to speak only as of the time of this conference call and does not undertake to update or revise them as more information becomes available. Certain financial measures have been reported on a comparable basis to exclude the impacts of costs that were incurred in fiscal 2013 in connection with the integration of BWP Distributors and the General Parts International acquisition. A reconciliation of any non GAAP financial measures mentioned on the call with the corresponding GAAP measures is described in our earnings release and our SEC filings, which can be found on our website at advancedautoparts.com. For planning purposes, our Q1 2014 earnings release is scheduled for May 15 before market open and our quarterly conference call is scheduled for the morning of Thursday, May 15, 2014. To be notified of the dates of future earnings reports, you can sign up through the Investor Relations section of our website.
Finally, a replay of this call will be available on our website for 1 year. Now let me turn the call over to Darren Jackson, our Chief Executive Officer. Darren?
Thank you, Zaheed. Good morning, everyone. Thank you for joining us and welcome to our Q4 conference call. I'd like to start off by thanking all of our team members for their hard work and commitment to better serve our customers and grow our business. Joining me on the call today is our President, George Sherman, who will update you on our business operations and Mike Norona, our Chief Financial Officer, who will update you on our financials.
I'd also like to take this opportunity to convey a warm welcome to the new team members from General Parks that have now joined our Advanced team bringing our total team strength to approximately 71,000. The foundation of any business is its people and I'm proud to be surrounded by exceptionally talented team as we head into a special and transformative year for company in 2014. Since our last conference call at the end of the Q3, we are very excited to have closed the General Parts acquisition on January 2, 2014. The closing of this transaction was a historic day for our company. This investment positions Advance for leadership in the industry while broadening and accelerating our growth strategy.
Advance's 80 year history has been a story of growth and adapting to the changing industry and customer needs. This combination is another strategic step forward for our and I couldn't be more pleased and privileged to be part of this next chapter in our journey. I will begin my prepared remarks today updating you on our Q4 performance followed by my thoughts on our 2013 outcomes as well as our priorities for 2014. I am pleased to report that our results in the 4th quarter were better than expected with total sales increasing 6% for the quarter. Our comparable earnings per share increased 6.8% versus the Q4 in 2012.
Now I'm also very happy to report a positive comp sales albeit slight of 0.1% increase in the quarter. This increase was a 210 basis point acceleration from our 3rd quarter. Notably, both our DIY and commercial same store sales accelerated from the Q3 with commercial outpacing DIY. Entering the 4th quarter, we anticipated continued sales softness and that our comparable store sales would decline by low single digits. However, we saw increased levels of customer demand in the back half of the quarter due to favorable winter weather generating increased sales particularly in battery and the wiper categories.
Sales in all of our markets accelerated from the Q3 with our cold weather markets accelerating at a faster pace. The sales performance was also a testament to our supply chain and retail operations team for having strong inventory in stock positions and delivering exceptional service to our customers. Clearly the extended decrease in the Eastern U. S. Has and should benefit our business in 2014.
During the quarter, our gross profit rate declined 8 basis points to 49.8 percent versus 49.9 percent in the Q4 of 2012. That was expected. Our SG and A performance in the 4th quarter was in line with our expectations as comparable SG and A increased to 41.7%. Mike will discuss this in more detail shortly. Looking back on 2013, we continue to see favorable industry fundamentals as we witnessed an increase in miles driven, the average age of vehicles holding steady at over 11 years with approximately 80% of vehicles over 6 years old and deferred maintenance reaching record levels in 2013.
We are encouraged with the overall progress we made in the year despite navigating persistent headwinds from unfavorable macro factors, including a very apprehensive consumer that was experienced uncertainty with employment, government healthcare reform and a very uneven economic recovery. In addition, we were faced with unseasonably warm winter temperatures during our Q1 followed by a late start to the spring selling season. In light of all these challenges, we remained focused on what was in our control and concentrated on our objectives of driving growth, providing the best customer service and growing our profits. The back half of the 4th quarter brought extraordinary cold winter weather which increased consumer demand and led to a strong finish to our fiscal year. As I've said before, weather balance is out over the long term.
Strategically, our greatest accomplishment was the acquisition of General Parts International, which closed just after our 2013 fiscal year end. The combined business will be more balanced with a growth platform for commercial and DIY. We will be able to strengthen our market position and increase service levels to a broader and deeper customer base in the industry. The acquisition increases our reach with immediate coast to coast and North American market coverage. It also expands our platform to include the important independent customer channel while building on our commitment to national accounts, large bay garages, heavy duty fleet and government programs.
The addition of Worldpac combined with our existing Auto Parts International business solidifies our position as the market leader in import parts. In addition, it will create an unparalleled e commerce engine through our combination with the market leading Worldpac and Carquest B2B platforms. Operationally, our focus and related achievements were concentrated on strengthening and executing on the fundamentals aimed at driving sales growth, customer service and profitability. As we entered the year, our strategy at the highest level was unchanged in terms of our focus on service leadership and superior availability. Yet, we narrowed our priorities to yet we narrowed our priorities to concentrate on growing our commercial business, focusing on in store execution and developing a more efficient operating model with both the DIY and commercial businesses working together.
Overall, we are encouraged by our strong 4th quarter finish in sales, especially in the DIY business. Our focus in 2013 was managing our cost to the slower sales environment and making the necessary trade offs as we balanced our profit management of our important DIY business, while continuing to invest in our customers and key areas of the business. Specifically, our commercial business saw positive sales gains resulting from national and regional account growth, incremental growth in our e commerce business and continued positive response to our leading e services offers. Delivery speed and reliability continued to improve across the board. We continued driving improvements in our market availability and assortment through the support of 370 4 hub stores and the positive impact from our daily delivery capabilities from our Remington distribution center that met our expectations.
Collectively, Advance and AI opened 172 new stores in 2013, a 35 store increase over 2012 openings. The performance of our new stores positions us well as we enter 2014. Concurrently, the integration of 124 BWP stores continues to be on track for completion by mid-twenty 14. George Sherman joined our company as President in the first half of twenty thirteen to lead the operations in day to day execution. His impact has been reflected in our second half results.
We made significant strides with in store execution improvements and took meaningful steps towards improved efficiency and effectiveness within our operating model. George and the team have been simplifying how we run our stores, driving productivity improvements and investing in our team members through comprehensive product and leadership training programs. George will speak more about this shortly. Overall from an operational perspective, we are very proud of the progress we made as we remain focused on execution and the team worked with intensity to deliver our priorities being capped off by a better than expected Q4 performance. Financially, we are pleased with our progress towards increasing our profitability as operating income on a comparable basis grew 5.5% in 2013 despite the challenging sales environment.
Overall, comp store sales did decline 1.5 percent. However, total sales grew 4.7% due to the acquisition of BWP and new stores. Our teams worked diligently to drive year over year gross margin improvements of 15 basis points including the costs of the 1st full year of operation from our Remington, BC that opened in the Q3 of 2012. Collectively, our teams 12. Collectively, our teams managed expenses and made the necessary edits which helped drive our operating income results in line with our expectations for the full year.
Turning to 2014, this is arguably the most exciting year in our 80 year history. The past 6 years have targeted growth of our commercial business through a series of deliberate, strategic and operational stair steps. The acquisition of General Parts is a logical next step for Advance as we accelerate our growth strategy and capitalize on the fundamentals and structural shifts in our industry towards commercial. Collectively, the acquisition of General Parts positions Advance as the largest automotive parts provider in North America. While being the largest is certainly an accomplishment in its own right, our sights are now set on being the best in the industry.
Our primary focus areas in 2014 will be squarely set on successfully delivering on 2 overarching objectives. 1st, being manically focused on delivering on the core business and second, the successful execution in 2014 of a multiyear general parts integration plan. In 2014, we begin a never ending mission of being the best. We will build on those successes that have gotten us to where we are today and continue to invest in those areas that will drive our sales growth, customer service excellence and profit outcomes. We are committed to improving our sales outcomes for both DIY and commercial through continued focus on our fundamentals, growing our store base, expansion of national and regional accounts and investing in availability through the additional hubs and supply chain efficiencies.
Our focus on improving our business profitability will leverage on our success in 2013 as we maintain our positive momentum with in store execution and disciplined expense management. We expect to take meaningful steps in improving our overall customer service by putting our customers first and improving our ability to serve. Supporting that initiative will be our commitment to continue heavily investing in our team members that serve our customers day in and day out through relevant and comprehensive training and development. Notably, our acquisition of General Parts has immediately improved the strength of our overall team. The General Parts team members come with deep commercial industry and institutional experience and knowledge which will complement our overall talent as the teams begin sharing knowledge and experience.
We are very excited to work as a combined team, one team in 2014. An additional area of focus and investment for us in 2014 will be our import business. Today, Worldpac together with Auto Parts International position us as the leader in the import market, the fastest growing automotive segment. The addressable market for imports continues to grow at a faster rate than domestic vehicles based on vehicle registrations. We will look to accelerate our leadership position in this important segment.
In summary, I am upbeat and grounded in our view of 2014. I remain confident about our industry fundamentals remaining positive and appreciate the return of normalized winter season leading to a strong 4th quarter finish giving us momentum as we enter 2014. That being said, the uneven economic recovery continues to affect the consumer. Although modest signs of improvement are expected in 2014 with the anniversary of increased payroll taxes and steady gas prices. We remain balanced and we'll continue to manage our business accordingly as we monitor trends as they unfold throughout the year.
We will be clearly focused on delivering on our core business on our core business outcomes while successfully integrating the General Parts acquisition. In simple terms, we'll continually improve our operational execution while investing in our capabilities to serve our customers better than anyone else in 20 14. In closing, I would like to recognize a few of the leaders who were instrumental in the General Parts acquisition process. Transactions of this size and nature are complex and require cross functional and organizational teamwork to successfully execute. I could not be more proud of the team that led the acquisition, which included more leaders than I could
than I could possibly name here.
Yet the leadership and tireless efforts from several leaders including Jim Wade, Bill Carter, Temple Sloan III and David McCartney were instrumental. The human resource, finance and legal teams of each organization for carrying added responsibilities, keeping our focus each day and continuing to deliver great customer experience. I will now turn the call over to George to update you on the work he is leading on our key priorities that support our 2013 success and outline some of the goals for 2014. George?
Thanks, Darren, and good morning, everyone. First, I'd like to thank our team members for their commitment to customer service, while continuing to make progress on our 2013 priorities during the quarter. I'd also like to extend a very warm welcome to the General Powers team members that have now joined the Advanced team in 2014. With our closing announcement of the Generalpar's acquisition, we now have roughly 71,000 talented team members working together as we look forward to delivering on the tremendous opportunity this acquisition enables, while providing the best customer service each day. With my prepared remarks this morning, I'll provide a view on our 4th quarter sales performance followed by an update on the key priorities that we focused on within the quarter and the full year.
Finally, I share my thoughts on the business as we enter 2014. Looking at our sales, we are very encouraged with our performance in the Q4 as the team delivered a positive comparable store sales outcome of 0.1. A sequential acceleration of at least 200 basis points from Q3 on a 1 year and 2 year basis. Our positive sales performance was attributable to solid execution by our fuel teams and the continuous improvements we are making to our operational infrastructure, which I'll talk more about in a moment. In addition, the winter weather trends during the second half of the quarter across all markets generated incremental customer demand in various product categories.
Our continued investments in availability and superb execution for our merchant and supply chain teams allow us to be well positioned to respond to a lift in customer demand. Our field team accelerated performance in both our DIY and commercial businesses. Our positive comp sales performance was driven by growth in seasonal categories, driving improvements in both dollars per transaction and sales per hour productivity with commercial seeing transaction growth within the quarter. All our regions accelerated from the Q3 with notable acceleration being strongest in the Plains and Great Lakes regions, 2 regions that were particularly challenged during the Q3. As I mentioned previously, we've been on a mission to transform our operational DNA to one that is focused on outcomes, sales, great customer service and profitability.
These outcomes are underpinned by fundamental business priorities and structural changes we have been systematically making to our business in order to position Avance for long term success. We are continuing to see progress against those priorities and the changes we are making not only helped us deliver the positive results in the 4th quarter, but also established all important momentum heading into 2014. I'd now like to update you on our progress against key priorities. But first, I'd like to highlight some areas we are making positive structural changes. First, we've been hard at work simplifying and streamlining our operating structure and charting the course towards a field centric operating model.
We've been working diligently to decentralize decision making so that we empower our field team members and effectively push decision making closer to the customer. This will result in faster decisions that will improve our customer experience, but also allow our field leaders to tailor those decisions and strategies to the individual markets and customer needs. 2nd, we continue to put focus each day on improving our in store execution and building an efficient operating model. As I previously mentioned, we're all in when it comes to investing in our team members through training and development. This is an investment in time and resources and we're clearly committed to providing our team members with the knowledge, training and tools to equip them to deliver a fantastic customer experience, while empowering them to deliver on our core business outcomes.
Those business outcomes are now clear and concise and are focused on the most important performance metrics. We've been simplifying our business and removing non value added tasks, removing unnecessary reporting, redundant procedures and shifting our team members time and focus towards being on the sales floor at the counter or on the phone, engaging with our customers and looking after their needs. 3rd, developing a model of consistent disciplined execution and accountability. We have held firm to a recipe for success and are now seeing improvement in our core operations that give us confidence going forward. Our move to a positive comp in the 4th quarter was encouraging.
But to be clear, we are working towards an Aspire for a greater outcome. Turning around sales execution is not an overnight process, but rather a series of building blocks through a consistent execution day in and day out. The execution of our field leadership teams and their willingness to accept accountability and effect movement to a field centric organization has been another brick in the foundation that we continue to build as we head into 2014. Turning your attention now to update you on other key priorities and business outcomes. Our commercial business continued to gain momentum in the 4th quarter with positive comp sales and a commercial sales mix of 40.4% versus 38.1% in the same quarter last year.
Our sales per commercial program exceeds $700,000 per program. Our supply chain and availability work continues. And I'll take a moment update you on 1, our Remington distribution center 2, our hub store initiatives and 3, updates on our ongoing focus on inventory availability. As we previously communicated, our goal is to service 400 stores through our Remington distribution facility. I'm happy to announce that we have not only met that objective, but have modestly exceeded it.
Of those 400 plus stores being serviced, we have 178 stores that are receiving daily replenishment at the end of the 4th quarter. We have expanded the assortment of our daily delivery by adding additional categories and providing those service stores with the strongest in stock positions and we are increasingly encouraged by the performance of those stores receiving daily delivery. As they exceed expectations and continue to show positive momentum and increased sales lift. Daily replenishment continues to be a priority for us and aligns with our objective of driving availability and breadth of assortment. Further expansion of the daily delivery program will be considered in conjunction with a more holistic distribution network assessment study we'll be conducting in light of our recent acquisition and the 38 new general parts distribution centers we will now operate.
2nd, our work continues towards improvement of in market availability. A key component of this is our hub store strategy. During the quarter, we added 4 hub stores either through new stores or the upgraded existing stores strategically located to operated hubs. At the end of the quarter, our store count was 374, an increase of 35 from the Q4 of last year. 3rd, as we look at inventory, our inventory growth was up 10.7% year over year, primarily due to the increase in new store openings, our acquisition of BWP, our increase in hub stores and the ramp up of our Remington distribution center.
We also continue to drive improvements in our availability as we look to make strategic investments that get the parts closest to the customer. Looking at our new store growth during the quarter, we added 55 new advanced auto parts stores to bring our new store count over the past 12 months to 172. The performance of our 20122013 class of stores continue to perform at or above our expectations, primarily driven by a faster ramp up of commercial business in previous classes of stores. We are once again pleased with the performance of our Auto Parts International business. The 4th quarter performance was once again led by strong execution, driving strong top line sales growth and diligent expense management resulting in strong bottom line performance.
Heading into 2014, we're excited about continued growth of our leadership position in imports. Integration of the 124 BWP stores progressed largely as expected in the Q4. We remain on plan to complete the integration by mid-twenty 14 consistent with the time frame previously communicated at the beginning of the fiscal year. As of the Q4, we successfully converted or consolidated a total of 33 stores and continue to capture the integration learnings, which we leverage as we enter into our larger integration of General Parts beginning in 2014. As we think about 2014, it's important to recognize where we have come from and where we are going.
Since we began ADVANCE 80 years ago, we've been on a continuous journey of growth and we couldn't be more proud of our accomplishments. Fast forward to today and we're now the biggest thing in the industry. However, as exciting as that is, we aspire for more. In 2014, we are focused on the journey towards being the best. The 2 overarching priorities for us in 2014 will be: 1st, to maintain an uncompromising focus on our core operations and delivering the best service to our customers.
2nd, to successfully integrate the General Parts acquisition and achieve the benefits we conveyed at the time we announced the acquisition. We are clear on the absolute importance of successfully integrating the companies and minimizing the distraction factor to our core businesses. Of paramount importance was to keep distraction risk. Therefore, we will be assigning a team to deliver the integration led by Bill Carter, Senior Vice President on our Advanced leadership team. Bill brings an immeasurable level experience to the table from his combined experience both prior to Advanced, while at Bain Consulting, where he led the strategy work in auto aftermarkets, post merger integration and program execution, but also with Advance.
Or he has been instrumental in our commercial strategy and the integration of our acquisition of BWP Stores. This team will also include numbers from general parts, which will provide not only deep institutional knowledge, but a form for sharing best practices within the group. We are pleased with our performance in 2013 as we made significant strides in our execution framework and drove strong sales performance in our 4th quarter. Our work on great execution will continue to build up our successes this past year and we will continue to invest in and focus on the fundamentals. That begins first with our team.
It starts with continuing focus on strong hiring, training and development, performance management and building on our work of developing a field centric culture. Next, concentrating on growth of our sales and service capabilities from national account growth, expanding our e services offering, growing penetration of our commercial credit program and our B2B platform. 3rd, continuing the work to support availability driven growth through continued expansion of our hub stores and the inventory optimization as we look to continue improvement of in stocks and as I mentioned earlier, getting inventory where it matters most closest to the customers. A key fundamental and central to our overarching mission will be continuing we'll be continuing to focus on our customers and invest in those areas that will improve our ability to serve each and every day. In closing, I'd like to take a moment to communicate how thrilled I am to welcome 2 exceptionally talented leaders to my team, David McCartney and Al Wheeler.
David McCartney will serve as President of our Carquest operations and has been associated with General Parks for 27 years, leading almost every aspect of the organization over his career. He has a passion for creating and enabling teams that focus on success for the organization as well as for our customers. Al Wheeler will serve as our Senior Vice President of our combined commercial business. Al has done with Carquest for over 30 years and brings a rich experience set that will undoubtedly position us to accelerate our combined commercial business. Welcome to the team David and Al.
I'm excited about our synergy and the combined capability set that we'll now bring to bear in the marketplace. Now I'd like to turn the call over to Mike Norona, our Chief Financial Officer.
Thanks, George, and good morning, everyone. I'd like to start by thanking all of our talented and dedicated team members for their commitment to serving our customers in 2013 and the better than expected finish they led us to in our Q4. I would also like to sincerely welcome all the new team members from General Parts to the Advanced team as we successfully closed the transaction on January 2, 2014. We entered 20 14 with both momentum and excitement from this combination, which will allow us to leverage our new size and scale, combined capabilities and a team of roughly 71,000 talented team members to create value for our shareholders, customers and team members in 2014. I plan to cover the following topics with you this morning.
1, provide some financial highlights from our Q4 of 2013 2, put our Q4 and full year results into context with our expectations and key financial priorities we use to measure our performance and 3, share with you our financial outlook for 2014. As a point of clarity, my commentary this morning regarding the 2013 financial performance will be solely related to Advance Auto Parts. The General Parts acquisition closed subsequent to our fiscal year end and we will begin consolidated reporting and commentary beginning with the Q1 of 2014. In addition, the 2013 results I will be speaking to unless otherwise specified will be on a comparable basis, which excludes the impacts of BWP integration expenses and excludes any one time transaction costs associated with the acquisition of General Parks. We began this year by communicating our 2013 EPS full year guidance of $5.45 to $5.60 excluding BWP integration costs and we are pleased to have exceeded those expectations with a comparable EPS of $5.67 an 8.6% increase in 2012.
This was driven by improvements in our operating profit performance as a result of both an increase in our gross profit rate and disciplined expense management. We are encouraged by the improvements in our operational execution leading to a strong finish in the 4th quarter. On a GAAP basis, our 2013 EPS was $5.32 which included $0.07 of EWP integration costs for the year, including $0.03 in Q4 and $0.28 of transaction expenses, including $0.24 in Q4 associated with the acquisition of General Parts. At the start of the year, we estimated BWP integration costs would be $0.15 to $0.20 However, the actual integration costs of $0.07 came in under that estimate due to both the pacing of the integration and our actual expenses coming in lower than original estimates. We remain on track to complete the integration by approximately the end of our Q2.
Turning to sales. Our 4th quarter sales increased 6% to $1,400,000,000 driven by the net addition of 151 new stores over the past 12 months, the acquisition of BWP and a comparable same store sales increase of 0.1%. Sales are attributable to the extreme winter weather in the back half of the quarter combined with a strong execution from our retail and supply chain teams. Our total sales for fiscal 13 increased 4.7 percent to $6,500,000,000 and our full year comp store sales decreased 1.5%. Our 4th quarter gross profit rate decreased 8 basis points to 49.8% versus 49.9 percent in Q4 of 2012.
The 8 basis point decrease in gross profit rate was the result of a higher mix of commercial, which has a lower gross profit rate driven primarily by the acquisition of BWP, partially offset by increased merchandising margins due to lower acquisition costs and improvements in supply chain efficiencies. Our commercial mix represented 40.6% of 2013 sales versus 38.1% last year. For the year, our gross profit rate increased 15 basis points to 50.1%. Our 4th quarter comparable SG and A rate of 41.7% increased 36 basis points versus Q4 of 2012, driven by higher incentive compensation and increased new store openings. As shared on our Q3 earnings call, the higher incentive comp was the result of better operating income performance this year versus last year as we anniversary lower incentive compensation in Q4 last year.
This was partially offset by lower administrative support costs, specifically less professional fees and increased labor productivity. For the year, our comparable SG and A rate increased 7 basis points to 39.4% versus 39.3% over the same period last year, driven by higher incentive compensation, fixed cost deleverage due to the same store sales decline and the increase in new store openings. All in, on a comparable basis, our 4th quarter operating income dollars increased 0.6 percent to 1 $113,800,000 and our operating income rate decreased 44 basis points over the same period last year to 8.1%. Our diluted earnings per share on a comparable basis increased on a comparable basis increased $0.06 to $0.94 during the quarter versus $0.88 in the Q4 last year. For the year, on a comparable basis, our operating income dollars increased 5.5 percent to $693,300,000 and our diluted EPS increased 8.6 percent to $5.67 Our average diluted share count was 73,200,000 shares for the quarter and 73,400,000 shares for the full year.
For the year, free cash flow was $183,100,000 a decline of 55.6 percent versus $412,300,000 over the same period last year. Excluding the acquisition of BWP, free cash flow was $350,200,000 a $62,100,000 decrease from 2012 driven by an increase in owned inventory, partially offset by a lower increase in accounts receivable. Our inventory increased 10.7% primarily driven by our increase in new stores, our acquisition of BWP, investments in hubs and our Remington DC. Our accounts payable to inventory ratio now stands at 80 5.3% versus 87.9% in 2012 and we continue our focus on driving continued AP ratio improvement on our new post acquisition consolidated base in 2014. At the end of the Q4, we had $1,100,000,000 in cash and $1,100,000,000 of long term debt on our balance sheet.
The increase in our 4th quarter cash position was largely driven by the proceeds of our $450,000,000 bond issuance as part of our financing plan in preparation for the close of the acquisition of General Parks. As we embark upon this next strategic growth step of our business, our financial principles remain unchanged. We will continue to measure our financial performance through the financial priorities of growth, profitability and value creation. Our approach and philosophy has always been to prioritize growth as our primary use of capital in order to increase returns and drive shareholder value. The General Parts acquisition accelerates our commercial growth, which is and continues to be the growth engine of the company and positions us as the leader in the market creating a pathway for further growth by opening up attractive new channel opportunities, diversifying and expanding our customer base and enhancing our geographic presence.
It will also give us an expanded footprint to expand our DIY business. Turning to profit. Advance has been on a mission to improve profitability and we are pleased with the progress made in 2013 with our 5 0.5% increase in operating profit dollars on a comparable basis, driven by our gross profit improvements, increased labor productivity and our disciplined expense management, specifically in reductions we made in our administrative support costs. Looking forward, our mission to improve profitability will continue with the General Parts acquisition and delivering on the estimated $160,000,000 of cost synergies primarily through the areas of of procurement as well as corporate store and supply chain efficiencies. With respect to value creation, the General Parts transaction provides a compelling opportunity to drive shareholder returns through growth in our business that will drive incremental operating profit, earnings and cash flows.
From a capital structure standpoint, we are committed to paying down our debt to get back to a maximum ceiling leverage ratio of 2.5 times and maintaining our investment grade ratings. Our investment grade ratings will help us to make continued improvements in our combined AP ratio with GPI.
I'd like
to now discuss our 2014 annual outlook. To begin, I'd like to share 4 guiding principles that underline the basis of our outlook. 1, the 2014 annual outlook is being provided on a total consolidated basis combining Advanced Auto Parts and General Parts results, given we see our combination with GPI as an integrated expansion of our commercial assets and capabilities to grow with our existing customers and attract new ones. To assist you in understanding the outlook, we are providing you the following 2013 estimated comparable consolidated information, including general parts, which was used to develop our 2014 annual outlook. 2013 full year sales is estimated to between $9,400,000,000 $9,500,000,000 20 13 full year gross profit is estimated between 45.5 percent 46 percent of sales and 2013 full year SG and A is estimated between 36.5% 37% of sales.
This 2013 comparable consolidated information has been provided solely for guidance purposes and represents Advance's current estimate and is subject to change pending the finalization of the close for GPI's 2013 year. 2, in 2014, 2014, Advanced will also include results on a comparable cash EPS basis. Subsequent to the acquisition of General Parts, the company believes this non GAAP information is significant to understanding trends and is important in analyzing the company's operating results and earnings and is providing this information to investors to assist in performing analysis of the company's operating results. 3, 2014 will be a 53 week fiscal year for Advance. However, the financial outlook provided today is based on a 52 week fiscal year.
4, due to the timing of the General Parts acquisition close, we are still in the process of working through accounting elements of the acquisition. And as a result, certain components within our annual outlook discussed today may change. We will continue to advise you of such changes throughout the year. Looking at 2014, we expect the strong industry fundamentals to continue and are encouraged by the sustained strong winter weather patterns and unseasonally cooler temperatures that have contributed to a good start to sales this year. However, it is still early and we remain balanced in our view through the challenging year we just completed and persistent uncertainty in the macroeconomic environment, continuing to affect the consumer.
As a result, we anticipate our comp store sales to be in the range of flat to low single digits. As a reminder of our policy, stores are included in our comp store sales calculation once a store has been opened for 13 complete accounting periods or approximately 1 year. Therefore, our comp store sales in 2014 will include Advance, BWP and Auto stores. We plan to collectively open 120 to 140 new advanced auto parts stores, auto part international stores and Worldpac branches. We will also continue the work of integrating the remaining BWP stores by the middle of 2014.
Turning to gross profit. Excluding the impact of achieved synergies, we expect to see some improvement in 2014 combined entity gross profit rate driven by improved merchandise margins due to lower acquisition costs, increased global sourcing and improvements in supply chain efficiencies, partially offset by a higher mix of overall commercial sales, which has a lower gross profit rate. Looking at SG and A, we expect our SG and A for the combined entity excluding the impact of Achieve synergies to remain essentially flat driven by new store growth, annualization of new stores 2013 and somewhat offset by improved labor productivity and improvements in our administrative support costs. Moving on to synergies. Consistent with our acquisition announcement, we have estimated total run rate cost synergies of $160,000,000 by approximately the end of the 3rd year post close of the acquisition and expect to achieve approximately $45,000,000 to $55,000,000 in synergy realization in 2014.
Also as per our acquisition announcement, we have estimated total one time expenses to achieve synergies to be approximately $190,000,000 over a 5 year period with the majority of the cost being incurred within the 1st 3 years. We expect to incur approximately $55,000,000 to $65,000,000 in expenses to achieve synergies in 2014. Turning to capital expenditures. We expect our capital expenditures to be approximately 325,000,000 dollars to $350,000,000 driven by new store development, supply chain investments, store systems and approximately $50,000,000 to $60,000,000 in capital related to the integration of General Parks. We expect free cash flow to be a minimum of $450,000,000 excluding the acquisition of General Parts.
As mentioned earlier, our BWP integration program will continue in 2014 as we expect to complete the process by approximately the middle of 2014. We estimate our BWP integration expenses to be approximately $12,000,000 to $15,000,000 for the year. And as a reminder, our outlook is based on a 52 week basis. All in, we expect our 2014 annual comparable cash EPS outlook to be in the range of $7.20 to $7.40 per share. As a reminder and as further detailed in our press release, this estimate includes synergies of $45,000,000 to $55,000,000 related to the acquisition of GPI, excludes the amortization of intangibles assets associated with the acquisition of GPI, excludes the impact of the 53rd week in fiscal 2014, excludes one time integration costs associated with the continued integration of BWP and excludes one time expenses to achieve synergies related to the acquisition of GPI.
In closing, we are pleased with our our comparable operating profit improvement in 2013 along with the positive momentum we carried into 2014. We expect 2014 to be historic and we are confident about our future as we begin the journey of integrating General Parks Parks and continue to improve on our base business. I want to again welcome the new General Parks team members to the Advanced team and thank our entire team for what they do every day to serve our customers, inspire our team members and grow our company. Operator, we are now ready for questions.
Thank The first question today is from Gary Vaucher with Credit Suisse.
Thank you. Just you've owned DWP now for a little while and that's the closest you've come in terms of having an in-depth knowledge of GPII. Could you talk about the learnings and recognizing that's a little bit of a different situation because the franchisee owning other franchisees.
Can
you talk about what you learn from the way they operate that gives you confidence in terms of things you could apply from GPII or other areas to advance to improve performance going forward? Thanks. Yes. Gary, this is Darren. So there's a handful things we learned.
First of all, we learned culturally we're very similar to the whether it's GPI or BWP. And then early on the work really is to retain the people that are serving our customers. What we've seen in the 1st 12 months is that our retention levels after acquisition were actually better than the year before. So the team members would clearly have a level of excitement about that. I would say the other thing that we've learned is that we had to do some product transitions and there were some product categories that the customer was very familiar with and very supportive of their customers.
And those product transitions went just fine. So we had to transition into some advanced private label product. We had to transition some of our belts programs and the stocking programs and our take 1 of 3 types of transitions with BWP. Take 1 of 3 types of transitions with BWP into the backroom of an AAP, what we call tuck and folds, seem to be working really well. We're retaining the revenues at a much better rates than what we thought and we're retaining the team members and the customers.
There doesn't seem to be any customer retention challenges. Now if we move a little further down the road, we'll lose a little bit of business from those closest to us. But overall, it's exceeded our expectations. I'd tell you that conversions are just a little trickier. I would say those are meeting our expectations.
There's fewer of those and that's when we take an existing DWP and essentially inject a DIY business into it. And what happens is there's a lot more change management with that. And so I don't think it's a technical challenge. And one of the challenges we did have is that you have to put in AVP systems because the legacy Explorer system which is the Carquest system was going away. And one of the advantages we see of now owning GPI is that we have access to both systems now.
So the change management curve isn't as challenging in some of those conversions overall. And I would say the 4th thing that we've learned overall is that positioning this integration with an integration team that's fully dedicated. We finished what 33 by the end of this year. We'll finish them all by the middle of next year. We're using that same integration team.
Obviously, we'll have to augment it. And it's like anything in life. You learn with each one that you do and we're able to execute them a little more seamlessly with each one
we get
done. That gives me more confidence in terms of how we're positioning for the overall GPI integration. Thank you.
Thank you. The next question is from Matthew Sasseur with Goldman Sachs.
Thanks a lot. Good morning. My primary question relates to synergies. So you quantified the year on number and it sounds like you're looking to book these ratably over the 3 years. Can you talk about the qualitative buckets that you would expect to access earlier the integration process whether one or the other is weighted more heavily in year 1 versus year 3?
Hey, Matt, it's Mike. So as we said, we expect to generate 100 and $150,000,000 in synergies over the 3 years. And we guided to the range of $45,000,000 to $55,000,000 in 2014. If you break out those the breakout of the synergies we talked about was purchasing or procurement as we said in the script, scale and leverage which are kind of cost synergies and then supply chain. So kind of the cadence around that we would expect in 2014 to see some of the purchasing synergies a little bit earlier and also some of the scale and leverage.
And then the supply chain, just given now we're putting their 38 DCs together with our 12 DCs and now 50 DCs and we've got some studies to do there. The supply chain would come later on in that 3 year journey. But the ones you're going to see this year are going to be more from the purchasing categories and the synergies there and then some
way a very quick follow-up. Thank you for quantifying the EPS impact of the extra week. Should we think about the sales impact of that week just as we build up the model as being sort of an average week in your fiscal Q4? Or would there be a reason to think of it differently?
Exactly, Matt. And if that changes throughout the year, we'll give you that. It's just difficult to predict 1 week, especially in the Q4, just given the volatility you sometimes see with the weather. But I think the assumption you've made is exactly what I would do.
Thank you so much.
Thank you. Our next question today comes from Greg with ISI Group.
Hi, thanks. I wanted to follow-up a little bit on the cash flow and the CapEx investment to get everything done. Mike, could you highlight what portion of the cost of the integration are cash versus non cash? Can I also put that in the context of the CapEx going forward? Was it the run rate we should expect?
Or does it go up as you start to figure out supply chain?
Yes. So first of all, on the cash virtually all of those costs that we talked about of 190,000,000 dollars are all virtually all cash costs. So and then P and L costs. P and L costs. And then the and then we've kind of broken out the capital separate.
So what we get so you can when we guided this year, we guided our capital our total capital this year for $325,000,000 to $350,000,000 and we said roughly $50,000,000 to $60,000,000 of that is related to the acquisition. Things like IT capital, conversion capital, stores, supply chain systems. So those are some of the capital buckets. And then some of the cost buckets, if you're interested in some of those buckets, I think that was your question, Greg, is we've got project costs, transition costs. Early on, we've got retention and severance costs, conversion costs and then the last big bucket is IT costs.
So that gives you just a kind of a P and L versus capital.
And maybe if you just to tie that into the $450,000,000 or more free cash flow, I think you said that was ex GPI. Presumably that's ex the GPI costs or just tell us on that $450,000,000 that's consolidated?
Yes. That's an all in. So the cash flow number is an all in number. The free cash flow number that we got it to that's the minimum $450,000,000 that's all in number.
Okay. And included in that would be any working capital benefits. And if you have any guidance on that, then I'll let you go.
Yes, it would be, Greg. Okay.
And how much working capital you think we can get?
We haven't shared that out, but that's a good one.
Yes. And those build and Greg those build over time. I think we've had our 1st vendor meeting this week.
I mean, Greg, just to give you a little bit of clarity. I mean, the one thing that we said in the announcement of the deal and I'll share with you again is maintaining our investment grade ratings was important. That will help us as we continue to improve our AP ratio. We see some opportunities with GPI. They have a lower AP ratio than we do in their base part of the GPI business excluding the Worldpac part.
And we see some great opportunities improving that working capital through AP ratio with our investment grade ratings. But it's still too early to tell and provide any further guidance than that. Okay.
Thanks a lot.
Thank you. And we do have time for one more question from Scot Ciccarelli with RBC Capital Markets.
Thanks guys for taking the question. Can you give us
a concrete example of how you plan to leverage
the capabilities and relationships that
you've kind of brought on board from GPI into the Advance store base? And then just kind of hopefully it's a sidebar, how close are you to making any kind of meaningful decisions on store and D. C. Consolidation plans? Thanks.
Yes. Scott, I'll give you two examples on GPI. Last weekend, I was in Orlando with members of my senior management team meeting with the TechNet customers and meeting with the independent channel customers. The TechNet customers, there's 5,300 of them and they tend to be more of the large bay garages. If you look at Motor Age, the number one garage in the country this year was the Pellman Garage in Colorado Springs, and that's a TechNet customer.
And so one of the things Advanced did not develop is its own auto care program for garages. We don't need to. The TechNet program is 17 years old. Al Wheeler, who George spoke about earlier has been with Carquest 17 years and helped build that program from the ground up. And we see that as a tremendous asset that we would build upon with all the assets of GPI.
The other one is Carquest Technical Institute. That training institute and to that point the Worldpac Training Institute goes out and when they train installers, it's not just training them on new technical things, but how to run a business. We could run those programs 52 weeks a year and have them sold out. Those are not capabilities that we build to help our installers are more e commerce based. And conversely, our moto shop suite, our owned assets that we will offer through the Carquest organization and sales teams.
So those are just 2 simple ones. I think as to the supply chain, I'll just say this at this point, we're just too early. Recently engaged a 3rd party to help work with us. The L and O study has just begun and color on that will be forthcoming later this year.
Got you.
Thanks a lot guys.
Thank you. And that's all the time we have for questions. I will now turn the call back to management for any final comments.
Thank you, Wendy. And thanks to our audience for participating in our 3rd quarter earnings conference call. If you have additional questions, please call me at 952-715-5097.
Reporters,
please contact Shelly Whitaker at 540-561-8452. That concludes our call.
Thank you. That concludes our call today. You may now disconnect. Thank you for joining us.