DOW JONES NEWSWIRES
Advance Auto Parts Inc.'s (AAP) fiscal second-quarter earnings
rose 6.6% as the retailer continued to expand its margins and sales
continued to accelerate despite the recession.
But in after-hours trading, its shares were down 4.2% at $43.70.
The stock, having essentially doubled since late November, hit a
52-week high at the end of July.
So far, the recession hasn't put much of a brake on auto-parts
retailers as consumers have put off buying new cars and are doing
more of their own repairs. Still, the company has said it wants to
rev up profits by renegotiating rents and moving or closing
stores.
The second-largest U.S. auto-parts retailer after AutoZone Inc.
(AZO), Advance Auto Parts reported earnings of $80.3 million, or 83
cents a share, up from $75.4 million, or 78 cents a share, a year
earlier. The latest quarter included a charge of 6 cents a share
for store divestitures.
Sales for the quarter ended July 18 climbed 7% to $1.32
billion.
Analysts estimated adjusted earnings of 83 cents a share on
revenue of $1.32 billion, according to a poll by Thomson
Reuters.
Same-store sales rose 4.8%, up 0.7% for do-it-yourself customers
and 14.8% to commercial repair shops. The gains, however, were less
than what was seen in the prior quarter.
Gross margin widened to 49.3% from 47.4%.
During the second quarter, Advance opened 23 stores, closed 21
and moved three. As of July 18, the store count was 3,407. So far
this year, the company has closed 24 stores, resulting in a total
charge of 10 cents a share. The company expects the costs of
shedding 40 to 55 stores to reach 15 cents to 22 cents a share by
the end of the fiscal year.
-By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com