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Advance Auto Parts (AAP) Q3 Earnings Beat Estimates, Rise Y/Y

Zacks Equity Research

Advance Auto Parts, Inc. AAP reported adjusted earnings of $2.10 per share in third-quarter 2019 (ended Oct 5, 2019), up 11.1% from the prior-year quarter’s level. The figure surpassed the Zacks Consensus Estimate of $2.07. Adjusted operating income increased 5.9% year over year to $205.1 million.

Advance Auto Parts generated net revenues of $2,312 million, which surpassed the Zacks Consensus Estimate of $2,298 million. Revenues improved 1.6% from the year-ago quarter’s tally. During the quarter under review, comparable store sales increased 1.2% year over year.

Adjusted selling, general and administrative (SG&A) expenses totaled $810 million compared with $814 million in the year-ago quarter, mainly aided by improvement in labor costs, occupancy expenses and insurance claims.

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

 

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

Financial Position

Advance Auto Parts had cash and cash equivalents of $573.7 million as of Oct 5, 2019, compared with $896.5 million as of Dec 29, 2018. Total long-term debt was $747 million as of Sep 30, 2019, compared with $1.05 billion as of Dec 29, 2018. The debt-to-capital ratio stands at 17.7%, as of Oct 5, 2019.

In third-quarter 2019, operating cash flow was $708.5 million, up from $681.5 million in the prior-year quarter.

Dividend & Share Repurchase

On Nov 8, 2019, Advance Auto Parts’ board approved cash dividend of 6 cents per share to be paid on Jan 3, 2020, to all common shareholders of record as of Dec 20, 2019. The company also authorized $700 million as an addition to the existing share repurchase program.

Store Update

As of Oct 5 2019, the company operated 4,891 stores and 152 Worldpac branches as well as served approximately 1,260 independently-owned Carquest branched stores across Mexico, the Bahamas, Turks and Caicos, and British Virgin Islands.

Guidance

The company reiterated its guidance for 2019. For the year, it anticipates consolidated revenues in the range of $9,650-$9,750 million. Further, adjusted operating income margin projection is maintained at the band of 8-8.2% and capital expenditure is estimated at $250-$300 million.

Zacks Rank & Stocks to Consider

Currently, Advance Auto Parts has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. SPAR, SPX Corporation SPXC and BRP Inc. DOOO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 117.3% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The company’s shares have surged 58.5% in the past year.

BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 21.7% over the past year.

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Click to get this free report Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report Spartan Motors, Inc. (SPAR) : Free Stock Analysis Report SPX Corporation (SPXC) : Free Stock Analysis Report BRP Inc. (DOOO) : Free Stock Analysis Report To read this article on Zacks.com click here.