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Advance Auto Parts (AAP) Q1 Earnings Miss, Sales Top Estimates

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Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted earnings of 91 cents per share in first-quarter 2020 (ended Apr 18, 2020), significantly down 63% from the prior-year number. The earnings figure also missed the Zacks Consensus Estimate of $1.61.

Advance Auto Parts generated net revenues of $2,698 million, beating the Zacks Consensus Estimate of $2,664 million. However, the revenues dropped 8.6% from the year-ago quarter reported figure. During the first quarter, comparable store sales decreased 9.3% year on year.

Adjusted operating income slumped 57.2% year over year to $104.3 million. Adjusted selling, general and administrative (SG&A) expenses totaled $1,094 million compared with the $1,097 million witnessed in the year-ago quarter.

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

Financial Position

Advance Auto Parts had cash and cash equivalents of $1.3 billion as of Apr 18, 2020, compared with $418.7 million as of Dec 28, 2019. Total long-term debt was $1.24 billion as of Apr 18, 2020, compared with $747.32 million as of Dec 28, 2019.

Operating cash flow was $10.9 million as of Apr 18, 2020, down from the prior-year quarter’s $204.5 million.

Dividend & Share Repurchase

On May 15, Advance Auto Parts’ board approved a cash dividend of 25 cents per share to be paid on Jul 3, to all common shareholders of record as of Jun 13, 2020.

On Nov 8, 2019, the company authorized $700 million as an addition to the existing $400-million share-repurchase program. Under this program, the company repurchased 0.2 million shares of its common stock, at an aggregate amount of $29 million, for an average price of $128.36 per share. At the end of the first quarter, the company had $861.7 million remaining under the share-repurchase program. However, during the quarter, the company suspended its existing share-repurchase program on the coronavirus scare.

Store Update

As of Apr 18, 2020, the company operated 4,843 stores and 168 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also serves 1,258 independently-owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands.

Guidance

Advance Auto Parts scrapped the 2020 guidance as it expects the coronavirus pandemic’s impact to strain its operations in the days to come.

Zacks Rank & Stocks to Consider

Advance Auto Parts currently carries a Zacks Rank of 3 (Hold).

Some better-ranked stocks in the same sector are Veoneer, Inc. (VNE - Free Report) , Unique Fabricating, Inc. (UFAB - Free Report) and Tesla, Inc. (TSLA - Free Report) , each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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