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Advance Auto Parts (AAP) Down 8.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Advance Auto Parts (AAP - Free Report) . Shares have lost about 8.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Advance Auto Parts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Advance Auto Parts’ Q4 Show Impresses
Advance Auto Parts reported adjusted earnings of $2.07 per share for fourth-quarter 2021 (ended Jan 1, 2022), increasing 17.6% from the prior-year figure. The reported figure also beat the Zacks Consensus Estimate of $1.97 on higher-than-expected comps growth. For the fourth quarter, comparable store sales witnessed 8.2% growth, outpacing the consensus mark of 4.76%. Advance Auto generated net revenues of $2,397 million, topping the Zacks Consensus Estimate of $2,362 million and edging up 1.3% from the year-ago reported figure.
Adjusted operating income was up 24.8% year over year to $176.8 million. Adjusted selling, general and administrative expenses totaled $946 million for fourth-quarter 2021, up 10% year over year.
Financial Position
Advance Auto had cash and cash equivalents of $601.4 million as of Jan 1, 2022 compared with $835 million on Jan 2, 2021. Total long-term debt was $1,034.3 million as of Jan 1, 2022, slightly up from $1,033 million on Jan 2, 2021. In 2021, AAP generated operating cash flow and FCF of $1.1 billion and $822.6 million, up 14.7% and 17.1%, respectively, on a year-over-year basis.
Dividend & Share Repurchase
On Feb 14, Advance Auto Parts’ board approved a 50% hike in its quarterly cash dividend. The dividend of $1.50 a share would be payable on Apr 1, 2022 to all common shareholders of record as of Mar 18, 2022.
In 2021, AAP — which currently carries a Zacks Rank #3 (Hold) — repurchased around 4.6 million shares for $886.7 million at an average price of $192.92 per share. At the end of fourth-quarter 2021, AAP had $545.5 million remaining under the share-repurchase program. A few days back, AAP authorized a new $1-billion share repurchase program, underpinning its commitment to maximize shareholder value.
Store Update
As of Jan 1, 2022, AAP operated 4,706 stores and 266 Worldpac branches in the United States, Canada, Puerto Rico, and U.S. Virgin Islands. It also served 1,317 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean Islands.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 5.25% due to these changes.
VGM Scores
At this time, Advance Auto Parts has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Advance Auto Parts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Advance Auto Parts (AAP) Down 8.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Advance Auto Parts (AAP - Free Report) . Shares have lost about 8.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Advance Auto Parts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Advance Auto Parts’ Q4 Show Impresses
Advance Auto Parts reported adjusted earnings of $2.07 per share for fourth-quarter 2021 (ended Jan 1, 2022), increasing 17.6% from the prior-year figure. The reported figure also beat the Zacks Consensus Estimate of $1.97 on higher-than-expected comps growth. For the fourth quarter, comparable store sales witnessed 8.2% growth, outpacing the consensus mark of 4.76%. Advance Auto generated net revenues of $2,397 million, topping the Zacks Consensus Estimate of $2,362 million and edging up 1.3% from the year-ago reported figure.
Adjusted operating income was up 24.8% year over year to $176.8 million. Adjusted selling, general and administrative expenses totaled $946 million for fourth-quarter 2021, up 10% year over year.
Financial Position
Advance Auto had cash and cash equivalents of $601.4 million as of Jan 1, 2022 compared with $835 million on Jan 2, 2021. Total long-term debt was $1,034.3 million as of Jan 1, 2022, slightly up from $1,033 million on Jan 2, 2021. In 2021, AAP generated operating cash flow and FCF of $1.1 billion and $822.6 million, up 14.7% and 17.1%, respectively, on a year-over-year basis.
Dividend & Share Repurchase
On Feb 14, Advance Auto Parts’ board approved a 50% hike in its quarterly cash dividend. The dividend of $1.50 a share would be payable on Apr 1, 2022 to all common shareholders of record as of Mar 18, 2022.
In 2021, AAP — which currently carries a Zacks Rank #3 (Hold) — repurchased around 4.6 million shares for $886.7 million at an average price of $192.92 per share. At the end of fourth-quarter 2021, AAP had $545.5 million remaining under the share-repurchase program. A few days back, AAP authorized a new $1-billion share repurchase program, underpinning its commitment to maximize shareholder value.
Store Update
As of Jan 1, 2022, AAP operated 4,706 stores and 266 Worldpac branches in the United States, Canada, Puerto Rico, and U.S. Virgin Islands. It also served 1,317 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean Islands.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 5.25% due to these changes.
VGM Scores
At this time, Advance Auto Parts has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Advance Auto Parts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.