Advance Auto Parts Inc.
) saw a 7.8% decline in earnings to $1.65 per share in the first
quarter of its fiscal year ended Apr 20, 2013 from $1.79 in the
same quarter of prior fiscal year. Nevertheless, earnings were
higher than the Zacks Consensus Estimate of $1.61 per share. Net
earnings fell 8.8% to $121.8 million from $133.5 million in the
first quarter of fiscal 2012.
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Revenues went up 3.0% to $2.02 billion, nearly meeting the Zacks
Consensus Estimate of $2.01 billion. The increase was driven by
the acquisition of BWP Distributors and the net addition of 163
new stores in the last 12 months, partially offset by a decline
in comparable store sales of 3.2% versus an increase of 2.1%
during the first quarter of fiscal 2012.
Comparable store sales in the quarter were hurt by unseasonably
warm weather, which had deferred the maintenance on vehicles.
Further, payroll tax increases, delayed income tax refunds and a
very slow start to the spring selling season led to softer
Gross margin was 50.0% during the quarter compared with 50.1% a
year ago. The eight basis-point decrease in gross profit rate was
driven by planned increases in supply chain costs related to the
full operations of the company's new distribution center and the
impact of BWP sales, which have a lower gross margin rate as a
result of higher mix of their sales to commercial customers.
These were partially offset by improved shrink rates.
SG&A was 39.9% of sales during the quarter compared with
38.6% in the first quarter of fiscal 2012. The 127 basis-point
increase was driven by lower expenses due to the company's 3.2%
decline in comparable store sales and increased new store
openings. These were partially offset by lower advertising
expenses and a decrease in credit card fees because of the in
sourcing of the company's commercial credit program.
Operating income decreased 9.1% to $204.1 million from $224.6
million in the first quarter of fiscal 2012. Operating margin was
10.1% versus 11.5% in the first quarter of fiscal 2012.
During the quarter, Advance Auto Parts acquired 124 BWP stores
and opened 56 stores, including 7 Autopart International stores,
and closed 5 stores. As of Apr 20, 2013, the company's total
store count stood at 3,969, including 223 Autopart International
Advance Auto repurchased about 767 thousand shares of its common
stock at an aggregate cost of $58.8 million, implying an average
price of $76.72. As of Apr 20, 2013, the company had
approximately $434 million available on its $500 million share
repurchase program authorized by the Board of Directors on May
Advance Auto Parts had cash and cash equivalents of $407.7
million as of Apr 20, 2013, an increase from $364.1 million in
the corresponding period a year ago. Long-term debt increased to
$605.0 million as of the above date compared with $600.6 million
as of Apr 21, 2012. The long-term debt-to-capitalization ratio
stood at 32.3%, down from 38.0% as of Apr 21, 2012.
In the 16-week period, ended Apr 20, 2013, operating cash flow
dipped to $135.3 million from $235.4 million in the year-ago
period. The decline in cash flow was primarily attributable to
lower earnings and increases in accounts receivable and
inventories. Capital expenditures (net) decreased to $63.0
million from $82.3 million a year ago.
Advance Auto Parts, a Zacks #3 Rank (Hold) stock, Advance Auto
Parts, Inc. operates in the U.S. automotive aftermarket industry
and is primarily engaged in selling replacement parts (excluding
tires), accessories, maintenance items, batteries and automotive
fluids for cars and light trucks.
Advance Auto Parts lowered its earnings outlook for fiscal 2013
due to the short-term softness in sales and the slow start to
spring. The company now expects to earn at the lower end of its
previously announced outlook of $5.30 and $5.45.per share for the
year. Currently, its shares retain a Zacks Rank #3, which
translates to a short-term (1 to 3 months) rating of Hold.
The company's competitors,
O'Reilly Automotive Inc.
) have recently reported their first quarter results.
AutoNation posted a 21.4% rise in earnings per share to 68 cents
for the quarter from 56 cents in the same quarter of 2012,
topping the Zacks Consensus Estimate by 5 cents. Revenues
increased 10.8% to $4.1 billion, nearly tallying the Zacks
Consensus Estimate of $4.0 billion.
In the same quarter, O'Reilly Automotive posted a 19.3% increase
in earnings to $1.36 per share compared with $1.14 in the
year-ago quarter, exceeding the Zacks Consensus Estimate by a
penny. Revenues during the quarter scaled up 4% to $1.59 billion
from $1.53 billion in the same period a year ago.
Last month, CarMax posted a profit of $107.2 million or 46 cents
per share in the fourth quarter of fiscal 2013 ended Feb 28,
2013, barely exceeding the Zacks Consensus Estimate by a penny.
Profits increased 12.8% from $95.0 million or 12.2% from 41 cents
per share in the prior-year quarter. Net sales and operating
revenues in the quarter rose 14% to $2.83 billion, topping the
Zacks Consensus Estimate of $2.70 billion.