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Advance Auto Parts (AAP) Q2 Earnings & Sales Beat Estimates

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Zacks Equity Research
·3 min read
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Advance Auto Parts, Inc. AAP reported adjusted earnings of $2.92 per share in second-quarter 2020 (ended Jul 11, 2020), up 46% from the prior-year number. The earnings figure also beat the Zacks Consensus Estimate of $1.97.

Advance Auto Parts generated net revenues of $2,501 million, beating the Zacks Consensus Estimate of $2,360 million. The revenue figure also rose 7.3% from the year-ago quarter reported figure. During the second quarter, comparable store sales increased 7.5% year on year.

Adjusted operating income climbed 42.2% year over year to $279.3 million. Adjusted selling, general and administrative (SG&A) expenses totaled $817.7million compared with the $813 million witnessed in the year-ago quarter.

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

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 $1.14 billion as of Jul 11, 2020, compared with $418.7 million as of Dec 28, 2019. Total long-term debt was $1.24 billion as of Jul 11, 2020, compared with $747.32 million as of Dec 28, 2019.

Operating cash flow was $448.2 million as of Jul 11, 2020, down from the prior-year quarter’s $492.2 million.

Dividend & Share Repurchase

On Aug 11, Advance Auto Parts’ board approved a cash dividend of 25 cents per share to be paid on Oct 2, to all common shareholders of record as of Sep 18, 2020.

The company lifted its temporary suspension on its existing share-repurchase program as of Aug 12, 2020. At the end of the second quarter, the company had $861.7 million remaining under the share-repurchase program.

Store Update

As of Aug 11, 2020, the company operated 4,819 stores and 167 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also serves 1,262 independently-owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands.

Guidance

Advance Auto Parts scrapped the 2020 guidance as it expects the coronavirus pandemic’s impact to strain its operations in the days to come.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the auto sector include Sonic Automotive Inc. SAH, AutoNation, Inc. AN and LCI Industries LCII, each sporting a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Sonic Automotive have gained 42%, year to date, compared with the industry’s rise of 16%.

Shares of AutoNation have appreciated 20.2%, year to date, compared with the industry’s rally of 16%.

Shares of LCI Industries have been up 19.6%, year to date, as against the industry’s decline of 0.5%.

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