Advance Auto (AAP) Q2 Earnings Miss, Sales Top Estimates
Advance Auto Parts, Inc. AAP delivered adjusted earnings of $1.43 per share for second-quarter 2023, down 62% from the year-ago quarter's figure. The reported figure also fell short of the Zacks Consensus Estimate of $1.72 per share. Advance Auto generated net revenues of $2,686 million, which topped the Zacks Consensus Estimate of $2,671 million on lower-than-expected comps decline. Comparable store sales dropped 0.6%. We projected a decline 0.7%. The top line increased 0.8% year over year.
Operating income plunged 33.3% year over year to $134.4 million. SG&A expenses totaled $1,013.7 million for second-quarter 2023, up 3% year over year.
Advance Auto had cash and cash equivalents of $277.1 million as of Jul 15, 2023, compared with $269.3 million on Dec 31, 2023. Total long-term debt was $1,785.1 million as of Jul 15, 2023, up from $1,188.3 million on Dec 31, 2022. From January through the second quarter of 2023, net cash used by operating activities and negative FCF totaled $164.6 million and $309.4 million, respectively.
AAP’s board declared a cash dividend of 25 cents per share, which would be paid out on Oct 27, 2023, to all common shareholders of record as of Oct 13, 2023.
As of Jul 15, 2023, AAP operated 4,790 stores and 319 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also served 1,307 independently owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean islands.
Advance Auto estimates 2023 net sales in the band of $11.25-$11.35 billion, up from the previous guided range of $11.2-$11.3 billion. Comparable store sales are projected within a range of negative 0.5% to positive 0.5%. Adjusted operating income margin is envisioned in the range of 4-4.3%, down from 5-5.3% guided earlier.
Advance Auto expects 2023 capex in the range of $200-$250 million, down from $250-$300 million. The company projects FCF in the band of $150-$250 million, down from the prior guidance of $200-$300 million. Earnings are forecast between $4.50-$5.10 per share, down from the prior estimate of $6-$6.50 per share. AAP aims to open 40 to 60 new stores this year.
AAP currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Advance Auto Parts, Inc. Price and EPS Surprise
Advance Auto Parts, Inc. price-eps-surprise | Advance Auto Parts, Inc. Quote
Key Releases From the Same Space
O’Reilly Automotive, Inc. ORLY reported second-quarter 2023 adjusted earnings per share of $10.22, beating the Zacks Consensus Estimate of $10.05. The bottom line increased from $8.78 in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4,069 million, crossing the Zacks Consensus Estimate of $3,990 million. The top line increased 11% year over year. The total store count was 6,071 as of Jun 30, 2023.
ORLY had cash and cash equivalents of $57.9 million at the end of the reported quarter, down from $108.6 million recorded as of 2022-end. Its long-term debt was $4,873.7 million, higher than $4,371.6 million as of Dec 31, 2022.
AutoNation, Inc. AN reported second-quarter 2023 adjusted earnings of $6.29 per share, which decreased 2.9% year over year but topped the Zacks Consensus Estimate of $5.83. The earnings beat can be primarily attributed to higher-than-expected new vehicle revenues and profits. In the reported quarter, revenues amounted to $6,890.1 million, surpassing the Zacks Consensus Estimate of $6,645 million. The company had recorded revenues of $6,869.2 million in the second quarter of 2022.
AutoNation’s cash and cash equivalents were $63.7 million as of Jun 30, 2023, declining from $72.6 million recorded as of Dec 31, 2022. The company’s liquidity was $1.4 billion, including $64 million in cash and nearly $1.3 billion available under its revolving credit facility.
Lithia Motors LAD reported adjusted earnings of $10.91 per share for second-quarter 2023, which declined from the prior-year quarter’s $12.18. The bottom line, nevertheless, surpassed the Zacks Consensus Estimate of $9.19 per share. Total revenues jumped 12% year over year to $8,111.5 million. The top line outpaced the Zacks Consensus Estimate of $7,697 million.
Lithia had cash/cash equivalents/restricted cash of $199.7 million as of Jun 30, 2023, down from $246.7 million as of Dec 31, 2022. Long-term debt was $5,414 million as of Jun 30, 2023, up from $5,088.3 million as of Dec 31, 2022.
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