Back to top

Image: Bigstock

Advance Auto Parts (AAP) Q4 Earnings Miss Estimates, Up Y/Y

Read MoreHide Full Article

Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted diluted earnings of $1.87 per share in fourth-quarter 2020 (ended Jan 2, 2021), up 14% from the prior-year figure. The reported figure, however, lagged the Zacks Consensus Estimate of $1.93 on lower-than-expected comps growth. During the fourth quarter, comparable store sales increased 4.7% year on year. However, the reported figure marginally missed the consensus mark of 4.82%.

Advance Auto Parts generated net revenues of $2,365.1 million, topping the Zacks Consensus Estimate of $2,340 million. Moreover, the revenue figure increased 12% from the year-ago quarter reported figure.

Adjusted operating income climbed 14.6% year over year to $171.8 million. Adjusted selling, general and administrative (SG&A) expenses totaled $913.5 million compared with the $779 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 had cash and cash equivalents of $835 million as of Jan 2, 2021, compared with $418.7 million as of Dec 28, 2019. Total long-term debt was $1,033 million as of Jan 2, 2021, compared with $747.3 million as of Dec 28, 2019.

Operating cash flow was $969.7 million as of Jan 2, 2021, up from the $866.9 million as of Dec 5 28, 2019. Free cash flow as of Jan 2, 2021 came in at $702.1 million, up from the $596.8 million as of 28, 2019.

Dividend & Share Repurchase

On Feb 10, Advance Auto Parts’ board approved a cash dividend of 25 cents per share to be paid on Apr 2, to all common shareholders of record as of Mar 19, 2021.

During the reported quarter, the company returned $319.9 million to shareholders through the share-repurchase program. At the end of the fourth quarter, the company had $432.2 million remaining under the share-repurchase program.

Store Update

As of Jan 2, the company operated 4,806 stores and 170 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also serves 1,277 independently-owned Carquest branded stores across these locations, in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands.

Outlook for 2021

Advance Auto Parts projects full-year 2021 net sales of $10.1-$10.3 billion. Comparable store sales growth and adjusted operating income margin are envisioned in the band of 1-3% and 8.7-8.9%, respectively. The company expects free cash flow of minimum $600 million. It intends to open 50-100 stores this year.

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) , Magna International (MGA - Free Report) and Meritor Inc. , all of which sport a Zacks Rank of 1, at present.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


 

Published in