Advance Auto Parts Inc.
) saw a 35.5% rise in adjusted comparable earnings to $2.25 per
share in the first quarter of fiscal 2014 (ended April 19, 2014)
from $1.66 in the prior-year quarter. It also exceeded the Zacks
Consensus Estimate by 9 cents per share.
Adjusted net earnings rose 34.7% to $165.4 million from $122.8
million in the first quarter of fiscal 2013.
Including amortization of acquired intangible assets of 11 cents,
integration costs of 10 cents related to the acquisition of General
Parts International and integration expenses of 3 cents for B.W.P.
Distributors, earnings per share (on a reported basis) came in at
$2.01 compared with $1.65 in the year-ago quarter.
Revenues went up 47.3% year over year to $2.97 billion, marginally
missing the Zacks Consensus Estimate of $2.99 billion. Sales
benefited from the acquisition of General Parts, increase in
comparable same-store sales and the net addition of new stores in
the last 12 months. Comparable store sales increased 2.4% versus a
decrease of 3.2% in the first quarter of fiscal 2013.
Gross profit increased 34.2% to $1.4 billion or 45.6% of sales in
the quarter compared with $1 billion or 50% of sales a year ago.
The decrease in gross profit margin was due to higher mix of
commercial sales (which has a lower gross margin rate), partly
offset by synergy savings in the quarter.
Comparable selling, general and administrative (SG&A) expenses
were $1.1 billion or 36% of sales in the quarter, compared with
$802.4 million or 39.8% in the first quarter of fiscal 2013.
Comparable operating income increased 38.2% to $284.4 million from
$205.8 million in the first quarter of fiscal 2013. Operating
margin stood at 9.6% versus 10.2% a year ago.
During the quarter, Advance Auto Parts opened 22 stores and closed
9 stores and acquired 1,336 Carquest stores and Worldpac branches
as part of its acquisition of General Parts on Jan 2, 2014. As of
Apr 19, 2014, the company's total store count stood at 5,276, with
105 Worldpac branches, and it served roughly 1,400 independently
owned Carquest stores.
The Board of Advance Auto Parts declared a regular quarterly
dividend of 6 cents per share to be paid on Jul 2, 2014, to
stockholders of record as of Jun 18, 2014.
Advance Auto Parts had cash and cash equivalents of $83.4 million
as of Apr 19, 2014, a decrease from $407.7 million as of Apr 20,
2013. Total long-term debt increased to $2.1 billion as of Apr 19,
2014, from $604.9 million as of Apr 20, 2013. The long-term
debt-to-capitalization ratio stood at 55.4% versus 32.3% as of Apr
In the 16-week period ended Apr 19, 2014, operating cash flow
dipped to $81.1 million from $135.3 million in the year-ago period.
Free cash flow in the period was $20.6 million versus $81.3 million
last year. This decline can be attributed to the increase in owned
inventory, a decrease in accrued expenses, partly offset by an
increase in net income. Capital expenditures in the 16-week period
ended Apr 19, 2014, stood at $60.5 million compared with $63
million a year ago.
Advance Auto Parts increased its earnings expectation to
$7.30-$7.50 per share for 2014 from the previous guidance of
$7.20-$7.40 per share.
Advance Auto Parts, which is a prominent player in the automotive
replacement parts and accessories industry, along with
O'Reilly Automotive Inc.
), currently carries a Zacks Rank #2 (Buy).
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