Advance Auto Net Drops 35%, Retailer Pushes More Store Brands

Scott Peters
16 Nov, 2022
New York City

Advance Auto Parts plunged 16.3% to $153.77 after the retailer reported mixed quarterly results and reiterated weak annual outlook.

Net sales in the third quarter increased 0.8% to $2.64 billion  and comparable store sales declined 0.7%.

Gross profit margin decreased 44 basis points to 44.7% of net sales.

In the quarter, operating income margin decreased to 6.7% of net sales compared to 8.7% a year ago. 

Net income in the quarter dropped 35% to $111 million from $169.8 million and diluted earnings per share fell to $1.84 from $2.68 a year ago.

The LIFO, Last In First Out, impact on earnings increased to $67.5 million from $29.4 million a year ago.  

 

Free Cash Flow 

In the third quarter, net cash provided by operating activities declined to $483.1 million from $924.9 million a year ago. 

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

Free  cash flow in the quarter fell to $149.5 million from $734.0 million in the same period a year ago. 

 

Outlook 

The retailer reiterated its annual sales outlook between $11.0 billion and $11.2 billion and comparable store sales to range between flat and 0.1% decline. 

The company also revised its free annual cash flow outlook to minimum $300 million from minimum $700 million. 

The company reiterated its new store and branch opening in the range between 125 and 150 in the year. 

The retailer opened 37 new stores and branches in the third quarter. 

Dividend and Stock Repurchase 

The company declared a cash dividend of $1.50 per share to be paid to shareholders on record on December 16, 20222 on January 3,  2023. 

In the third quarter, the company repurchased 0.4 million shares of its common stock at an aggregate  cost of $75.0 million, or an average price of $168.93 per share.

At the end of the quartet, the company still have $1.0 billion available in its stock repurchase program.