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Advance Auto Parts (AAP) Q3 Earnings & Sales Beat Estimates

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Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted diluted earnings of $2.81 per share in third-quarter 2020 (ended Oct 3, 2020), substantially up 33.8% from the prior-year figure. The reported figure also beat the Zacks Consensus Estimate of $2.63.

Advance Auto Parts generated net revenues of $2,541.9 million, surpassing the Zacks Consensus Estimate of $2,478 million. Additionally, the revenue figure increased 9.9% from the year-ago quarter reported figure.

During the third quarter, comparable store sales increased 10.2% year on year as well as topped the consensus mark of 5.88%.

Adjusted operating income jumped 32.6% year over year to $271.9 million. Adjusted selling, general and administrative (SG&A) expenses totaled $856.7 million compared with the $809.9 million witnessed in the year-ago quarter.

Advance Auto Parts continues to refrain from providing the 2020 guidance given the uncertainties related to the full impact of the COVID-19 pandemic.

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 $1,068.2 million as of Oct 3, 2020, compared with $418.7 million as of Dec 28, 2019. Total long-term debt was $1,031.9 million as of Oct 3, 2020, compared with $747.3 million as of Dec 28, 2019.

Operating cash flow was $809.2 million as of Oct 3, 2020, up from the $708.5 million as of Oct 5, 2019. Free cash flow generated during the reported quarter came in at $308.5 million, up from the $158.6 million generated in the prior-year period.

Dividend & Share Repurchase

On Oct 6, Advance Auto Parts’ board approved a cash dividend of 25 cents per share to be paid on Jan 4, to all common shareholders of record as of Dec 18, 2020.

During the reported quarter, the company repurchased 0.7 million shares of its common stock at an aggregate cost of $109.6 million, or an average price of $153.06 per share. At the end of the third quarter, the company had $752.2 million remaining under the share-repurchase program.

Store Update

As of Oct 3, 2020, the company operated 4,811 stores and 168 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also serves 1,269 independently-owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands.

However, the reported figure of 4,811 stores lagged the Zacks Consensus Estimate of 4,978 stores.

Zacks Rank & Key Picks

Advance Auto Parts currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Better-ranked stocks in the auto sector include American Axle Manufacturing Holdings Inc (AXL - Free Report) , Autoliv Inc (ALV - Free Report) and Lear Corporation (LEA - Free Report) , all of which sport a Zacks Rank of 1, at present.

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