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Advance Auto (AAP) Beats on Q1 Earnings, Ups '22 EPS View
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Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted earnings of $3.57 per share for first-quarter 2022 (ended Apr 23, 2022), up 6.9% from the year-ago quarter figure. The reported figure also beat the Zacks Consensus Estimate of $3.53 on higher-than-expected comps growth. Advance Auto generated net revenues of $3,374.2 million, falling short of the Zacks Consensus Estimate of $3,381 million but edging up 1.3% from the year-ago reported figure.
The first quarter of 2022 marked the eighth consecutive quarter of comps and adjusted operating income growth. While comparable same-store sales grew 0.60%, adjusted operating income was up 1.6% year over year to $303.6 million despite a rise in SG&A costs. Adjusted SG&A expenses increased $1.3 billion for first-quarter 2022, up from $1.2 billion in the year-ago period.
Advance Auto Parts, Inc. Price, Consensus and EPS Surprise
Advance Auto had cash and cash equivalents of $138.7 million as of Apr 23, 2022 compared with $601.4 million on Jan 1, 2022. Total long-term debt was $1,187.2 million as of Apr 23, 2022, up from $1,034.3 million on Jan 1, 2022. During the reported quarter, net cash used in operating activities totaled $55 million against $329.9 million of net cash provided by operating activities in the first quarter of 2021. Consequently, AAP recorded a negative Q1’22 FCF of $169.8 million, deteriorating from a positive FCF of $259 million in the comparable year-ago period.
Dividend & Share Repurchase
On May 18, AAP’s board declared a cash dividend of $1.50 a share, which would be payable on Jul 1, 2022 to all common shareholders of record as of Jun 17, 2022.
During the quarter under discussion, AAP — which currently carries a Zacks Rank #3 (Hold) — repurchased around 1.1 million shares for $248.2 million at an average price of $231.41 per share. At the end of first-quarter 2022, AAP had $1.3 billion remaining under the share-repurchase program.
Store Update
As of Apr 23, 2022, AAP operated 4,687 stores and 311 Worldpac branches in the United States, Canada, Puerto Rico, and U.S. Virgin Islands. It also served 1,318 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean Islands.
Guidance for 2022
Advance Auto estimates 2022 net sales in the band of $11.2-$11.5 billion. Comparable store sales growth and adjusted operating income margin are envisioned in the range of 1-3% and 10-10.2%, respectively. Advance Auto expects capex in the $300-$350 million range and targets FCF of a minimum of $775 million. Adjusted EPS is now forecast between $13.30 and $13.85, up from the previously guided range of $13.20-$13.75. The auto parts retailer intends to buy back stocks worth $500-$700 million. AAP aims to open 125-150 new stores this year.
Zacks Rank & Key Picks
Advance Auto currently carries a Zacks Rank #3 (Hold).
Group 1: Group 1 is one of the leading automotive retailers in the world, with operations primarily located in the United States and the UK. The Zacks Consensus Estimate for current-year earnings and sales implies year-over-year growth of 19.6% and 20%, respectively.
Over the trailing four quarters, GPI surpassed estimates on all occasions, the average surprise being 6.6%. GPI reported first-quarter 2022 adjusted earnings per share of $10.81, beating the Zacks Consensus Estimate of $9.45.
Genuine Parts: Atlanta-based Genuine Parts distributes automotive and industrial replacement parts and materials. The Zacks Consensus Estimate for current-year earnings and sales implies year-over-year growth of 13.6% and 12.2%, respectively.
Over the trailing four quarters, GPC surpassed estimates on all occasions, the average surprise being 11.3%. Genuine Parts reported first-quarter 2022 adjusted earnings of $1.86 per share, topping the Zacks Consensus Estimate of $1.70.
Standard Motor: Standard Motor is one of the leading manufacturers, distributors, and marketers of premium automotive replacement parts for engine management and temperature control systems. The Zacks Consensus Estimate for current-year earnings and sales implies year-over-year growth of 2% and 6.4%, respectively.
Over the trailing four quarters, SMP surpassed estimates on all occasions, the average surprise being 40.3%. Standard Motor reported first-quarter 2022 adjusted earnings of 92 cents per share, beating the Zacks Consensus Estimate of 81 cents.
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Advance Auto (AAP) Beats on Q1 Earnings, Ups '22 EPS View
Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted earnings of $3.57 per share for first-quarter 2022 (ended Apr 23, 2022), up 6.9% from the year-ago quarter figure. The reported figure also beat the Zacks Consensus Estimate of $3.53 on higher-than-expected comps growth. Advance Auto generated net revenues of $3,374.2 million, falling short of the Zacks Consensus Estimate of $3,381 million but edging up 1.3% from the year-ago reported figure.
The first quarter of 2022 marked the eighth consecutive quarter of comps and adjusted operating income growth. While comparable same-store sales grew 0.60%, adjusted operating income was up 1.6% year over year to $303.6 million despite a rise in SG&A costs. Adjusted SG&A expenses increased $1.3 billion for first-quarter 2022, up from $1.2 billion in the year-ago period.
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 had cash and cash equivalents of $138.7 million as of Apr 23, 2022 compared with $601.4 million on Jan 1, 2022. Total long-term debt was $1,187.2 million as of Apr 23, 2022, up from $1,034.3 million on Jan 1, 2022. During the reported quarter, net cash used in operating activities totaled $55 million against $329.9 million of net cash provided by operating activities in the first quarter of 2021. Consequently, AAP recorded a negative Q1’22 FCF of $169.8 million, deteriorating from a positive FCF of $259 million in the comparable year-ago period.
Dividend & Share Repurchase
On May 18, AAP’s board declared a cash dividend of $1.50 a share, which would be payable on Jul 1, 2022 to all common shareholders of record as of Jun 17, 2022.
During the quarter under discussion, AAP — which currently carries a Zacks Rank #3 (Hold) — repurchased around 1.1 million shares for $248.2 million at an average price of $231.41 per share. At the end of first-quarter 2022, AAP had $1.3 billion remaining under the share-repurchase program.
Store Update
As of Apr 23, 2022, AAP operated 4,687 stores and 311 Worldpac branches in the United States, Canada, Puerto Rico, and U.S. Virgin Islands. It also served 1,318 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean Islands.
Guidance for 2022
Advance Auto estimates 2022 net sales in the band of $11.2-$11.5 billion. Comparable store sales growth and adjusted operating income margin are envisioned in the range of 1-3% and 10-10.2%, respectively. Advance Auto expects capex in the $300-$350 million range and targets FCF of a minimum of $775 million. Adjusted EPS is now forecast between $13.30 and $13.85, up from the previously guided range of $13.20-$13.75. The auto parts retailer intends to buy back stocks worth $500-$700 million. AAP aims to open 125-150 new stores this year.
Zacks Rank & Key Picks
Advance Auto currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space include Group 1 Automotive (GPI - Free Report) Genuine Parts Company (GPC - Free Report) and Standard Motor Products (SMP - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Group 1: Group 1 is one of the leading automotive retailers in the world, with operations primarily located in the United States and the UK. The Zacks Consensus Estimate for current-year earnings and sales implies year-over-year growth of 19.6% and 20%, respectively.
Over the trailing four quarters, GPI surpassed estimates on all occasions, the average surprise being 6.6%. GPI reported first-quarter 2022 adjusted earnings per share of $10.81, beating the Zacks Consensus Estimate of $9.45.
Genuine Parts: Atlanta-based Genuine Parts distributes automotive and industrial replacement parts and materials. The Zacks Consensus Estimate for current-year earnings and sales implies year-over-year growth of 13.6% and 12.2%, respectively.
Over the trailing four quarters, GPC surpassed estimates on all occasions, the average surprise being 11.3%. Genuine Parts reported first-quarter 2022 adjusted earnings of $1.86 per share, topping the Zacks Consensus Estimate of $1.70.
Standard Motor: Standard Motor is one of the leading manufacturers, distributors, and marketers of premium automotive replacement parts for engine management and temperature control systems. The Zacks Consensus Estimate for current-year earnings and sales implies year-over-year growth of 2% and 6.4%, respectively.
Over the trailing four quarters, SMP surpassed estimates on all occasions, the average surprise being 40.3%. Standard Motor reported first-quarter 2022 adjusted earnings of 92 cents per share, beating the Zacks Consensus Estimate of 81 cents.