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Why Is Advance Auto Parts (AAP) Down 15.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Advance Auto Parts (AAP - Free Report) . Shares have lost about 15.3% 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 the most recent earnings report in order to get a better handle on the important drivers.
Advance Auto Parts reported adjusted earnings of $2.88 per share for fourth-quarter 2022, an increase of 39.1% from the year-ago quarter figure. The reported figure outpaced the Zacks Consensus Estimate of $2.41 a share. Advance Auto generated net revenues of $2,474 million, surpassing the Zacks Consensus Estimate of $2,422 million and increasing 3.2% from the year-ago reported figure.
Comparable store sales increased 2.1%. Adjusted operating income increased 23.6% year over year to $218.5 million. Adjusted SG&A expenses totaled $942.5 million for fourth-quarter 2022, down 0.4% year over year.
Financial Position
Advance Auto had cash and cash equivalents of $269.3 million as of Dec 31, 2022 compared with $601.4 million on Jan 1, 2022. Total long-term debt was $1,188.3 million as of Dec 31, 2022, up from $1,034.3 million on Jan 1, 2022. Year to date, net cash provided by operating activities and FCF totaled $722.2 million and $298.2 million, respectively.
Dividend & Share Repurchase
AAP’s board declared a cash dividend of $1.50 per share, which would be paid out on Apr 28, 2023, to all common shareholders of record as of Apr 14, 2023.
During the quarter under discussion, AAP repurchased around 0.5 million shares for $75 million at an average price of $150 per share. At the end of fourth-quarter 2022, AAP had $947.3 million remaining under its share repurchase program.
Store Update
As of Dec 31, 2022, AAP operated 4,770 stores and 316 Worldpac branches in the United States, Canada, Puerto Rico and U.S. Virgin Islands. It also served 1,311 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean Islands.
2023 Guidance
Advance Auto estimates 2023 net sales in the band of $11.4-$11.6 billion. Comparable store sales are envisioned to range between 1. Adjusted operating income margin is envisioned in the range of 7.8%-8.2%. Advance Auto expects its 2023 capex to be in the range of $300-$350 million. The company targets a minimum FCF of $400 million. Diluted EPS is forecast between $10.2 and $11.2. It aims to open 60 to 80 new stores this year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -23.34% due to these changes.
VGM Scores
Currently, Advance Auto Parts has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Advance Auto Parts has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Advance Auto Parts (AAP) Down 15.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Advance Auto Parts (AAP - Free Report) . Shares have lost about 15.3% 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 the most recent earnings report in order to get a better handle on the important drivers.
Advance Auto's Q4 Earnings Beat, Revenues Increase Y/Y
Advance Auto Parts reported adjusted earnings of $2.88 per share for fourth-quarter 2022, an increase of 39.1% from the year-ago quarter figure. The reported figure outpaced the Zacks Consensus Estimate of $2.41 a share. Advance Auto generated net revenues of $2,474 million, surpassing the Zacks Consensus Estimate of $2,422 million and increasing 3.2% from the year-ago reported figure.
Comparable store sales increased 2.1%. Adjusted operating income increased 23.6% year over year to $218.5 million. Adjusted SG&A expenses totaled $942.5 million for fourth-quarter 2022, down 0.4% year over year.
Financial Position
Advance Auto had cash and cash equivalents of $269.3 million as of Dec 31, 2022 compared with $601.4 million on Jan 1, 2022. Total long-term debt was $1,188.3 million as of Dec 31, 2022, up from $1,034.3 million on Jan 1, 2022. Year to date, net cash provided by operating activities and FCF totaled $722.2 million and $298.2 million, respectively.
Dividend & Share Repurchase
AAP’s board declared a cash dividend of $1.50 per share, which would be paid out on Apr 28, 2023, to all common shareholders of record as of Apr 14, 2023.
During the quarter under discussion, AAP repurchased around 0.5 million shares for $75 million at an average price of $150 per share. At the end of fourth-quarter 2022, AAP had $947.3 million remaining under its share repurchase program.
Store Update
As of Dec 31, 2022, AAP operated 4,770 stores and 316 Worldpac branches in the United States, Canada, Puerto Rico and U.S. Virgin Islands. It also served 1,311 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean Islands.
2023 Guidance
Advance Auto estimates 2023 net sales in the band of $11.4-$11.6 billion. Comparable store sales are envisioned to range between 1. Adjusted operating income margin is envisioned in the range of 7.8%-8.2%. Advance Auto expects its 2023 capex to be in the range of $300-$350 million. The company targets a minimum FCF of $400 million. Diluted EPS is forecast between $10.2 and $11.2. It aims to open 60 to 80 new stores this year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -23.34% due to these changes.
VGM Scores
Currently, Advance Auto Parts has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Advance Auto Parts has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.