We are downgrading Advance Auto Parts to Neutral from Outperform
based on weakening financial position and price competition.
However, the company reported a 27.7% rise in adjusted comparable
earnings to $1.89 per share in the third quarter of fiscal 2014,
surpassing the Zacks Consensus Estimate of $1.87. Revenues went up
50.6% year over year to $2.29 billion, in line with the Zacks
Consensus Estimate. Sales benefited from the General Parts
takeover, increase in comparable same-store sales and the addition
of new stores over the last 12 months. Advance Auto Parts expects
comparable cash earnings per share to be in the range of $7.50
$7.60 for 2014. Store expansion and benefits from acquisitions are
Advance Auto Parts, Inc. operates in the U.S. automotive
aftermarket industry and is primarily engaged in selling
replacement parts (excluding tires), accessories, batteries and
maintenance items for cars, vans, sport utility vehicles and light
trucks. It is the second leading retailer catering to the
"do-it-yourself" or "DIY and "do-it-for me or "DIFM" (or
Advance Auto Parts operates under two reportable segments:
Advance Auto Parts ("AAP") and Autopart International ("AI"). The
AAP segment consists of stores in the U.S., Puerto Rico and the
Virgin Islands under the trade names Advance Auto Parts and Advance
Discount Auto Parts. The AI segment, an acquired business, operates
as an independent and wholly owned subsidiary of the company. It
provides automotive replacement parts to the DIFM market as well as
to warehouse distributors and jobbers in the North American
As of Oct 4, 2014, Advance Auto Parts operated 5,305 stores and
109 Worldpac branches, and served approximately 1,350 independently
owned Carquest stores.
Advance Auto Parts Inc. (AAP): Read the Full
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