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Advance AutoParts' (AAP) Q2 Earnings Miss Estimates, Up Y/Y

Zacks Equity Research

Advance Auto Parts, Inc. AAP reported adjusted earnings of $2 per share in second-quarter 2019 (ended Jul 13, 2019), up 1.5% from the prior-year quarter’s level. The figure missed the Zacks Consensus Estimate of $2.22. Adjusted operating income declined 4.3% year over year to $196.4 million.

Advance Auto Parts generated net revenues of $2.33 billion, which missed the Zacks Consensus Estimate of $2.35 billion. Revenues were 0.2% higher than the year-ago quarter’s tally. During the quarter under review, comparable store sales were flat year over year.

Operating income inched up 1.9% year over year to $170.8 million in the reported quarter. Adjusted operating income margin declined 40 basis points year over year to 8.4% of net sales.

Adjusted selling, general and administrative (SG&A) expenses totaled $813 million compared with $811 million 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-eps-surprise-chart | Advance Auto Parts, Inc. Quote

 

Financial Position

Advance Auto Parts had cash and cash equivalents of $747.7 million as of Jul 13 compared with $896.5 million as of Dec 29, 2018. Total long-term debt was $746.9 million as of Jul 13 compared with $1.05 billion as of Dec 29, 2018.

In second-quarter 2019, operating cash flow was $492.2 million, up from $440 million in the prior-year quarter.

Dividend & Share Repurchase

On Aug 7, 2019, Advance Auto Parts’ board approved cash dividend of 6 cents per share to be paid on Oct 4, 2019 to all common shareholders of record as of Sep 20, 2019.

On Aug 7, 2019, the board of directors authorized a $400-million share repurchase program, replacing the remaining portion of the company's $600-million share repurchase program that was authorized in August 2018.

Store Update

As of Jul 13, the company operated 4,912 stores and 150 Worldpac branches as well as served approximately 1,250 independently-owned Carquest branched stores.

Zacks Rank & Stocks to Consider

Currently, Advance Auto Parts hold a Zacks Rank #4 (Sell).

Some better-ranked stocks in the auto space are Fox Factory Holding Corp FOXF, CarMax, Inc KMX and Gentex Corporation GNTX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory has an expected long-term growth rate of 16.7%. In the past six months, shares of the company have rallied 22.8%.

CarMax has an expected long-term growth rate of 12.6%. In the past six months, shares of the company have surged 36.2%.

Gentex has an expected long-term growth rate of 5%. In the past six months, shares of the company have returned 36.8%.

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