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Advance Auto Parts (AAP) Q1 Earnings Beat Estimates, Up Y/Y

Zacks Equity Research

Advance Auto Parts, Inc. AAP reported adjusted earnings of $2.46 per share in first-quarter 2019 (ended Apr 20, 2019), up 17.1% from that of the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $2.36. Adjusted operating income increased 8.7% year over year to $243.6 million.

Advance Auto Parts reported net revenues of $3 billion, almost in line with the Zacks Consensus Estimate of $2.9 billion. Revenues were 2.7% higher than the year-ago quarter. During the quarter under review, comparable store sales were 2.7% higher year over year.

Operating income rose 4.9% to $207.9 million in the reported quarter. Operating income margin increased 15 basis points year over year to 7%.

Adjusted selling, general and administrative (SG&A) expenses totaled $1.1 billion compared with $1.07 billion in the year-ago period.

Advance Auto Parts, Inc. Price, Consensus and EPS Surprise

 

Advance Auto Parts, Inc. Price, Consensus and EPS Surprise

Advance Auto Parts, Inc. price-consensus-eps-surprise-chart | Advance Auto Parts, Inc. Quote

Financial Position

Advance Auto Parts had cash and cash equivalents of $537.3 million as of Apr 20, 2019, down from $639.1 million as of Apr 21, 2018. The total long-term debt was $746.8 million as of Apr 20, 2019, lower than $1.05 billion as of Dec 29, 2018.

In first-quarter 2019, operating cash flow was $204.5 million, up 32.8% year over year.

Dividend & Share Repurchase

On May 14, 2019, Advance Auto Parts’ board approved a cash dividend of 6 cents per share to be paid as of Jul 6, 2019, for shareholders of record as of Jun 21, 2019.

On Aug 8, 2018, the board of directors authorized a $600-million share repurchase program, replacing the existing $500-million share repurchase program. Under this program, the company repurchased 0.8 million shares for $127.2 million in first-quarter 2019. Advance Auto Parts had $200 million remaining under the share repurchase program at the end of the reported quarter.

Store Update

As of Apr 20, 2019, the company operated 4,931 stores and 146 Worldpac branches, and served approximately 1,238 independently-owned Carquest stores.

Zacks Rank & Stocks to Consider

Advance Auto Parts currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Ford Motor Company F, Fox Factory Holding Corp. FOXF and AutoZone, Inc. AZO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford has an expected long-term growth rate of 7.3%. Over the past three months, shares of the company have gained 17.5%.

Fox Factory has an expected long-term growth rate of 16.4%. Over the past three months, shares of the company have gained 14.3%.

AutoZone has an expected long-term growth rate of 12%. Share price of the company has increased 13.3% in the past six months.

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