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Advance Auto Parts' (AAP) Q1 Earnings Beat, '21 View Raised

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Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted earnings of $3.34 per share for first-quarter 2021 (ended Apr 24, 2021), skyrocketing 234% from the prior-year figure. The reported figure also beat Zacks Consensus Estimate of $3.08 on higher-than-expected comps growth. For the first quarter, comparable store sales increased 24.7%, outpacing the consensus mark of 13.33% growth.

Advance Auto Parts generated net revenues of $3,330.4 million, topping the Zacks Consensus Estimate of $3,314.4 million. Moreover, the revenue figure increased 23.4% from the year-ago reported figure.

Adjusted operating income climbed 164% year over year to $298.8 million. Adjusted selling, general and administrative expenses totaled $1,232.8 million compared with $1,094.3 million witnessed 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 — which shares space with O’Reilly Automotive (ORLY - Free Report) , AutoZone (AZO - Free Report) and CarMax (KMX - Free Report) — had cash and cash equivalents of $880.2 million as of Apr 24, 2021 compared with $834.9 million as of Jan 2, 2021. Total long-term debt was $1,033 million as of Apr 24, 2021, essentially unchanged from the fourth quarter.

Operating cash flow jumped to $329.9 million from the year-ago figure of $10.9 million. Free cash flow (FCF) came in at $259 million versus the year-ago negative FCF of $72.1 million.

Dividend & Share Repurchase

In April, Advance Auto Parts’ board approved a cash dividend of $1 per share, indicating a significant uptick from 25 cents. The dividend would be payable on Jul 2 to all common shareholders of record as of Jun 18, 2021. It also approved an additional buyback program of $1 billion. During the quarter, the company repurchased around 1.1 million shares for $170.4 million at an average price of $157.84 per share.

Advance Auto Parts returned $204 million to shareholders through buybacks and dividend in the quarter under review. At the end of first-quarter 2021, the company had $1.3 billion remaining under the share-repurchase program.

Store Update

As of Apr 24, it operated 4,971 stores and 178 Worldpac branches in the United States, Canada, Puerto Rico and U.S. Virgin Islands. It also serves 1,285 independently-owned Carquest-branded stores across these locations, in addition to Mexico, the Bahamas, Grand Cayman, Turks and Caicos, and British Virgin Islands.

Guidance for 2021

Advance Auto Parts raised full-year 2021 view. It now projects full-year 2021 net sales of $10.4-$10.6 billion, up from previous forecast of $10.2-$10.4 billion. Comparable store sales growth and adjusted operating income margin are now envisioned in the band of 4-6% and 9-9.2%, respectively. The Zacks Rank #2 (Buy) company expects FCF of minimum $575 million. It intends to open 100-150 stores this year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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