Advance Auto Parts Net Sales Fall 1.3% On Flat Gross Margin

Scott Peters
24 May, 2022
New York City

Advance Auto Parts, Inc after the auto parts retailer reported sales in the first quarter ending on April 23 declined 1.3% to $3.4 billion and comparable same store sales increased 0.6%. 

Net earnings in the quarter fell 26% to $139.7 million or $2.26 a share from $185.9 million or $2.81 a share.   

Gross profit margin in the quarter was flat at 44.6% on the improved category mix and increased store brands partially offset by inflationary costs and unfavorable channel and product mix. 

Net cash used in operating activities was $54.9 million and free cash outflow was $169.8 million compared to net cash flow of $329.9 million and free cash inflow of $259.0 million in a year ago period. 

The decrease was primarily driven by lower net income and working capital. 

On a GAAP basis, the company's operating income was $203.3 million, or 6.0% of net sales, compared with 7.6% in the first quarter of 2021.

The retailer also opened 35 new stores and returned $403 million to shareholders through stock repurchases and dividends. 

During the quarter, the company repurchased 1.1 million shares at an aggregate cost of $248.2 million at an average price of $231.41 a share. 

At the end of the fiscal first quarter the company had $1.3 billion remaining in its share repurchase program. 

On May 18, 2022 the company declared a regular cash dividend of $1.50 per share to be paid on July 1, 2022 to all common stockholders of record as of June 17, 2022.

Guidance and Outlook 

The retailer guided full-year 2022 revenues between $11.2 billion and $11.5 billion and comparable sales to increase between 1% and 3%. 

Capital expenditures between $300 million and $350 million and stock repurchase between $500 million and $700 million. 

Adjusted diluted earnings per share are expected to fall between $13.30 and $13.85 compared to $12.02 in 2021. 

Free cash flow is expected to exceed $775 million compared to $823 million in 2021. 

Company and Stock 

Advance Auto Parts, Inc declined 3.7% to $176.50 after the auto parts retailer reported quarterly results. 

Advance Auto Parts has fallen 23.9% to $180.23.