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Advance Auto Parts (AAP) to Report Q4 Earnings: A Sneak Peek

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·4 min read
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Advance Auto Parts, Inc. AAP is slated to announce fourth-quarter 2021 results on Feb 14, after the closing bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $1.95 per share and $2,356 million, respectively.

The Zacks Consensus Estimate for Advance Auto Parts’ fourth-quarter earnings per share has been revised upward by 1 cent in the past seven days. The year-ago earnings were recorded at $1.87 per share. The Zacks Consensus Estimate for quarterly revenues, however, suggests a marginal decline from $2,365 million generated in fourth-quarter 2020.

This aftermarket auto parts distributor delivered better-than-anticipated earnings in the last reported quarter on higher-than-expected comparable store sales growth. Over the trailing four quarters, Advance Auto Parts surpassed estimates on three occasions and missed on the other, with the average surprise being 9.01%.

Earnings Whispers

Our proven model predicts an earnings beat for Advance Auto Parts this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This has been elaborated below.

Earnings ESP: Advance Auto Parts has an Earnings ESP of +1.84%. This is because the Most Accurate Estimate is pegged 3 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Advance Auto Parts currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Consider

Courtesy of economic recovery from the pandemic lows and preference for personal mobility, demand for vehicles has been on the rise. This, in turn, is anticipated to have fueled the demand for automotive replacement parts, accessories, batteries and maintenance items. Advance Auto Parts’ upcoming results are likely to get a boost from the same. Encouragingly, the Zacks Consensus Estimate for comparable same-store sales growth for the to-be-reported quarter is 4.76%, indicating an increase from the year-ago quarter and the prior quarter’s 4.70% and 3.1%, respectively.

Advance Auto Parts is likely to have gained from the digital ramp-up and rising e-commerce initiatives. Significant advancement of its DIY omni-channel digital platform and enhancements to the online portal ‘MyAdvance’ are expected to have increased traffic and resulted in higher conversion rates, which is likely to have boosted revenues during the quarter in discussion.

Completion of the rollout of cross-banner replenishment is likely to have delivered savings. The firm’s Warehouse Management Systems and Labor Management System initiatives remained on track and are expected to have driven productivity.

AAP’s fourth-quarter results would reflect the benefits from its strengthening foothold through the opening of new stores. In the first nine months of 2021, the company opened six Worldpac branches, 19 Advance and Carquest stores, and 44 independent Carquest stores. The Zacks Consensus Estimate for the total number of retail stores at fourth quarter-end is pegged at 5,007, indicating growth from the third quarter’s store count of 4,727.

In the last earnings call, Advance Auto Parts raised projections for full-year 2021 sales, comps and FCF, which boosts confidence for the upcoming results.

Other Stocks With Favorable Combinations

Here are a few other auto retailers, which, according to our model, also have the right combination of elements to post an earnings beat for the quarter to be reported:

Asbury Automotive ABG has an Earnings ESP of +3.62% and a Zacks Rank #1. The company is set to report fourth-quarter 2021 earnings on Feb 15.

The Zacks Consensus Estimate for Asbury’s to-be-reported quarter’s earnings and revenues is pegged at $5.86 per share and $2.43 billion, respectively. ABG surpassed earnings estimates in the last four quarters, with an average of 24.3%.

Sonic Automotive SAH has an Earnings ESP of +4.87% and a Zacks Rank #1. The company is set to report fourth-quarter 2021 earnings on Feb 16.

The Zacks Consensus Estimate for Sonic’s to-be-reported quarter’s earnings and revenues is pegged at $1.83 per share and $3.17 billion, respectively. SAH surpassed earnings estimates in the last four quarters, with an average of 25.4%.

AutoNation AN has an Earnings ESP of +1.97% and a Zacks Rank #2. The company is set to report fourth-quarter 2021 earnings on Feb 17.

The Zacks Consensus Estimate for AutoNation’s to-be-reported quarter’s earnings and revenues is pegged at $5 per share and $6.37 billion, respectively. AN surpassed earnings estimates in the last four quarters, with an average of 40.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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