Is Advance Auto Parts Growing Fast Enough?
Advance Auto Parts shares retreated after it reported its third-quarter financial results before the markets opened on Tuesday.
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Advance Auto Parts Inc. (NYSE: AAP | AAP Price Prediction) reported its third-quarter financial results before the markets opened on Tuesday. The specialty retailer said that it had $2.10 in earnings per share (EPS) and $2.3 billion in revenue, while consensus estimates had called for $2.05 in EPS and $2.3 billion in revenue. The same period of last year reportedly had $1.89 in EPS and $2.24 billion in revenue.
During the latest quarter, net sales increased 1.6%, with comparable store sales increasing 1.2% in this time as well. The decrease was driven primarily by an increase in coupon redemptions in connection with the impact of the launch of the company’s enhanced loyalty program initiatives.
Looking ahead to the 2019 full year, the company expects to see net sales between $9.65 billion and $9.75 billion and comparable store sales in the range of 1.0% to 1.5%. Consensus estimates call for $7.90 in EPS and $9.72 billion in revenue for the full year.
Tom Greco, president and CEO, commented:
In addition to our performance improvements and margin expansion, we continue to invest in critical information technology and supply chain initiatives that are expected to unlock significant productivity over the next several years. Notably, our working capital improvements were driven by our focus on cash management across the board. I am confident in our teams’ ability to drive additional sales and margin progress. We are on track to deliver record free cash flow, resulting in a substantial year over year increase in 2019 versus the prior year. Consistent with our commitment to drive significant value growth for our shareholders, I am also pleased to announce an additional $700.0 million share repurchase authorization.
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Shares of Advance Auto Parts traded down about 7.5% Tuesday morning to $156.10, in a 52-week range of $130.09 to $186.15. The consensus price target is $172.81.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
