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Advance Auto Parts (AAP) Q4 Earnings & Revenue Miss Estimates

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Advance Auto Parts, Inc. AAP reported adjusted earnings of $1.64 per share in fourth-quarter 2019 (ended Dec 28, 2019), up 40.2% from the prior-year number. The earnings figure, however, missed the Zacks Consensus Estimate of $1.36. Adjusted operating income increased 18% year over year to $149.9 million.

Advance Auto Parts generated net revenues of $2,113 million, missing the Zacks Consensus Estimate of $2,124 million. Revenues also edged down 0.4% from the year-ago quarter reported figure. During the fourth quarter, comparable store sales inched up 0.1% year on year.

Adjusted selling, general and administrative (SG&A) expenses totaled $779 million compared with the $802 million witnessed in the year-ago quarter, amid lower labor costs.

Advance Auto Parts, Inc. Price, Consensus and EPS Surprise


Financial Position

Advance Auto Parts had cash and cash equivalents of $418.7 million as of Dec 28, 2019, compared with $896.5 million as of Dec 29, 2018. Total long-term debt was $747 million as of Dec 28, 2019, compared with $1.05 billion as of Dec 29, 2018. The debt-to-capital ratio stands at 17.29%, as of Dec 28, 2019.

Operating cash flow was $867 million as of Dec 28, 2019, up from the prior-year quarter’s $811 million.

Dividend & Share Repurchase

On Feb 12, Advance Auto Parts’ board approved a cash dividend of 25 cents per share to be paid on Apr 3, to all common shareholders of record as of Mar 20, 2020.

The company also authorized $700 million as an addition to the existing $400-million share-repurchase program in fourth-quarter 2019. Under this program, the company repurchased 3.4 million shares of its common stock, at an aggregate amount of $487.4 million, for an average price of $144.23 per share. At the end of the fourth quarter, the company had $890.8 million remaining under the share-repurchase program.

Store Update

As of Dec 28, 2019, the company operated 4,877 stores and 160 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also serves 1,253 independently-owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands.


For full-year 2020, the company anticipates consolidated revenues of $9,880-$10,100 million. Further, adjusted operating income margin is estimated in the band of 8.4-8.7% and capital expenditure is projected at $275-$325 million.

Zacks Rank & Stocks to Consider

Advance Auto Parts currently carries a Zacks Rank of 4 (Sell).

Some better-ranked stocks in the Auto-Tires-Trucks sector include BRP Inc. DOOO, Fox Factory Holding Corp. (FOXF - Free Report) and SPX Corp. SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

BRP has a projected earnings growth rate of 20.17% for 2020. Its shares have surged 99.7% over the past year.

Fox Factory has an estimated earnings growth rate of 9.67% for the ongoing year. The company’s shares have appreciated 21.6% in a year’s time.

SPX has an expected earnings growth rate of 6.52% for the current year. The stock has rallied 39.4% in the past year.

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