Advance Auto Meets but Profits Fall - Analyst Blog
09 Novembro 2012 - 8:20AM
Zacks
Advance Auto Parts Inc. (AAP) posted a 14.2%
fall in earnings per share to $1.21 in the third quarter of the
year from $1.41 in the same quarter a year-ago due to weak sales in
the cold weather markets,. However, the EPS tallied the Zacks
Consensus Estimate during the quarter. Net income dipped 15.2% to
$89.5 million from $105.6 million a year ago.
Revenues in the quarter slid $7.5 million or 0.5% to $1.5 billion,
reflecting a 1.8% decrease in comparable store versus a comparable
store sales increase of 2.2% during the third quarter of 2011,
offset partially by the positive impact of net addition of 82
stores during the past 12 months.
Gross margin increased marginally by 31 basis points to 49.8% from
49.5% in the third quarter of 2011. The improvement in margin was
attributable to increased shrink, cost deflation and supply chain
efficiencies, offset partially by enhanced promotional activity.
However, operating margin shrank 180 basis points to 10.3% from
12.1% in the fiscal 2011 quarter.
During the quarter, Advance Auto Parts opened 35 stores, including
7 Autopart International stores. With this, the company has opened
70 stores, including 13 Autopart International stores,
year-to-date. As of October 6, 2012, the company’s total store
count stood at 3,727, including 210 Autopart International stores.
The company is close to reaching the goal of 120 to 140 store
openings in fiscal 2012.
During the quarter, Advance Auto Parts repurchased shares worth
$25.2 million compared with the year-ago level of $629.2 million.
At the end of the quarter, the company had nearly $500 million
shares remaining under its share repurchase authorization.
Advance Auto Parts had cash and cash equivalents of $479.4 million
as of October 6, 2012, significantly up from $65.9 million as of
October 8, 2011. Long-term debt remained flat at $600.2 million as
of October 6, 2012 compared with $600.4 million as of October 8,
2011. However, long-term debt-to-capitalization ratio improved to
34.3% from 43.6% a year ago due to a rise in shareholder’s
equity.
In the 40-week period ended October 6, 2012, the company’s
operating cash flow declined to $504.8 million from $611.0 million
in the year-ago period mainly due to lower profits and higher
receivables. Meanwhile, capital expenditures (net) decreased
marginally to $200.9 million from $206.4 million a year ago.
Advance Auto Parts lowered its earnings outlook for 2012 due to the
short-term softness in sales. The company now expects to earn
between $5.05 and $5.15 per share for the year, down from the prior
guidance of $5.25 to $5.35.
Advance Auto Parts, Inc. operates in the U.S. automotive
aftermarket industry and is primarily engaged in selling
replacement parts (excluding tires), accessories, maintenance
items, batteries and automotive fluids for cars and light trucks.
The company is the second leading retailer catering to the DIY and
DIFM (or commercial) customers.
There are unconfirmed published reports claiming that Advanced Auto
Parts was exploring to sell the company. It competes with
AutoZone Inc. (AZO), O’Reilly Automotive
Inc. (ORLY) and Pep Boys-Manny, Moe &
Jack (PBY) and currently retains a Zacks #4 Rank on its
stock, which translates to a short-term (1 to 3 months) rating of
Sell.
ADVANCE AUTO PT (AAP): Free Stock Analysis Report
AUTOZONE INC (AZO): Free Stock Analysis Report
O REILLY AUTO (ORLY): Free Stock Analysis Report
PEP BOYS M M &J (PBY): Free Stock Analysis Report
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