Advance Auto Parts

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Q3 Net Sales Increased 0.8% to $2.6 Billion; Year to Date Increased 1.0% Returned $167 Million to Shareholders in Q3; Year to Date Returned $860 Million Reiterates Net Sales, Comparable Store Sales and Adjusted Operating Income Margin Guidance RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourself customers, announced its financial results for the third quarter ended October 8, 2022. "I want to thank the entire family of Advance team members as well as our growing network of independent partners for their continued dedication,” said Tom Greco, president and chief executive officer. “We continue to execute our strategy to drive full year net sales growth and adjusted operating income margin expansion while returning excess cash to shareholders. In the third quarter, net sales grew 0.8% which benefited from improvements in strategic pricing and new stores, while comparable store sales declined by 0.7% in-line with previous guidance. Our deliberate move to increase owned brand penetration, which carries a lower price point, reduced net sales by approximately 80 basis points and comp sales by approximately 90 basis points. We also continued to invest in our business while returning approximately $860 million in cash to our shareholders through the first three quarters of 2022. “We’re reiterating our full year guidance that implies 20 to 40 basis points of adjusted operating income margin expansion, despite margins contracting in the third quarter. 2022 will be the second consecutive year that we have grown adjusted operating income margins in a highly inflationary environment. Our industry has proven to be resilient, and the fundamental drivers of demand remain positive. While we continue to execute against our long-term strategic plan, we’re not satisfied with our relative topline performance versus the industry this year and are taking measured, deliberate actions to accelerate growth.” Third Quarter 2022 Results (1) Net sales increased 0.8% to $2.6 billion Comparable store sales (2) decreased 0.7% Gross profit decreased 0.2% to $1.2 billion; Adjusted gross profit (3) increased 2.9% to $1.2 billion Gross profit margin decreased 44 basis points to 44.7% of Net sales; Adjusted gross profit margin (3) increased 98 basis points to 47.2% of Net sales SG&A increased 5.2% to $1.0 billion; Adjusted SG&A (3) increased 5.4% to $989.3 million SG&A was 38.0% of Net sales compared with 36.4% of Net sales; Adjusted SG&A (3) was 37.5% of Net sales compared with 35.8% of Net sales Operating income decreased 22.7% to $177.2 million; Adjusted operating income (3) decreased 5.8% to $258.0 million Operating income margin was 6.7% of Net sales compared with 8.7% of Net sales; Adjusted operating income margin (3) was 9.8% of Net sales compared with 10.4% of Net sales Diluted EPS decreased 31.3% to $1.84; Adjusted diluted EPS (3) decreased 11.5% to $2.84 Net cash provided by operating activities through the third quarter was $483.1 million; Free cash flow (3) through the third quarter was an inflow of $149.5 million Opened 37 new store and branch locations in the third quarter Third quarter of 2022 Net sales totaled $2.6 billion, a 0.8% increase compared with the third quarter of the prior year, primarily driven by strategic pricing and new store openings. Comparable store sales for the third quarter of 2022 decreased 0.7%, which was impacted by increased owned brand penetration, which has a lower price point than national brands. The company's GAAP Gross profit decreased 0.2% to $1.2 billion. Adjusted gross profit increased 2.9% to $1.2 billion. The company's GAAP Gross profit margin of 44.7% of Net sales decreased 44 basis points compared with the third quarter of the prior year. Adjusted gross profit margin increased 98 basis points to 47.2% of Net sales, compared with 46.2% in the third quarter of 2021. This was primarily driven by improvements in strategic pricing and product mix as well as owned brand expansion. These headwinds were partially offset by continued inflationary product costs and unfavorable channel mix. The company's GAAP SG&A was 38.0% of Net sales compared with 36.4% in the third quarter of 2021. Adjusted SG&A increased to $989.3 million from $938.2 million in the third quarter of the prior year. On an adjusted basis, SG&A was 37.5% of Net sales, which deleveraged 166 basis points compared with the third quarter of 2021. This was primarily driven by inflation in store labor, medical and fuel costs. On a GAAP basis, the company's Operating income was $177.2 million, or 6.7% of Net sales, compared with 8.7% in the third quarter of 2021. The company's Adjusted operating income was $258.0 million, a decrease of 5.8% versus the third quarter of the prior year. Adjusted operating income margin decreased 68 basis points to 9.8% of Net sales compared with 10.4% of Net sales in the third quarter of the prior year. The company's effective tax rate was 24.7%, compared with 23.7% in the third quarter of 2021. On a GAAP basis, the company's Diluted EPS was $1.84, a decrease of 31.3% from $2.68 in the third quarter of 2021. The company's Adjusted Diluted EPS was $2.84, a decrease of 11.5% from $3.21 in the third quarter of the prior year. On both a GAAP and adjusted basis, the company’s diluted EPS was negatively affected by approximately $0.20 as a result of foreign currency impact in the quarter. Net cash provided by operating activities was $483.1 million through the third quarter of 2022 versus $924.9 million in the same period of the prior year. The decrease was primarily driven by lower Net income and working capital. Free cash flow through the third quarter of 2022 was $149.5 million compared with $734.0 million in the same period of the prior year. ____________________ (1) All comparisons are based on the same time period in the prior year. (2) Comparable store sales include locations open for 13 complete accounting periods and excludes sales to independently owned Carquest locations. (3) For a better understanding of the company's adjusted results, refer to the reconciliation of non-GAAP adjustments in the accompanying financial tables included herein. Capital Allocation During the third quarter of 2022, 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, in connection with its share repurchase program. At the end of the third quarter of 2022, the company had $1.0 billion remaining under the share repurchase program. On November 7, 2022, the company declared a regular cash dividend of $1.50 per share to be paid on January 3, 2023 to all common stockholders of record as of December 16, 2022. Full Year 2022 Guidance Jeff Shepherd, executive vice president and chief financial officer, commented, “As we begin the final quarter of 2022, we’re reiterating our full year guidance for net sales growth, comparable store sales and adjusted operating income margin expansion. In addition, we’re updating our adjusted diluted EPS guidance range to reflect the impact of foreign currency. Finally, getting more parts closer to our customers is a top priority. Therefore, we’re making strategic inventory investments to improve our availability, which is an important step to accelerate growth in 2023. Inventory is the primary driver of our reduced free cash flow guidance.” View the full article

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10/20/2022 ADVANCE AUTO PARTS NAMES SPRAYWAY 2022 VENDOR PARTNER OF THE YEAR Automotive aftermarket parts provider recognizes six additional vendor partners during its annual Partner Summit; Advance Auto Parts Foundation and vendor partners gift more than $2 million to military veteran nonprofits RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider, presented its 2022 Vendor of the Year awards during the company’s annual Partner Summit, held Oct. 17, at the North Ridge Country Club in Raleigh, N.C. During the event, Advance honored numerous vendors for their partnership and performance. The retailer also announced that, thanks to the generous contributions of its vendor partners, the Advance Auto Parts Foundation will gift more than $2 million to military veteran nonprofits. The 2022 Vendor Partner of the Year award was presented to Sprayway, a leading manufacturer of aerosol products. Sprayway partnered with Advance’s supply chain team to tackle the aerosol can shortage. Thanks to innovative sourcing methods and shifts in production, Sprayway continued to supply Advance with brake cleaner, appearance chemicals and other essential automotive products. The gift from Advance’s vendor partners via the Advance Auto Parts Foundation will benefit three nonprofits in support of military veterans. Beneficiaries include Building Homes for Heroes, which gifts mortgage-free homes to wounded service members and their families; Hire Heroes USA, which provides free job search and career support to U.S. military members, veterans and their families; and Stop Soldier Suicide, whose goal is to reduce service member and veteran suicide by providing mental health support and resources. Since 2011, Advance’s vendor partners have contributed over $17 million to support military veteran nonprofits. “Our vendor partners are essential to Advance’s success,” said Jason McDonell, Advance’s executive vice president of merchandising, marketing and eCommerce. “Our vendor partners are dedicated to providing Advance with the highest quality parts and partnering with us on strategies and solutions to get those parts to our customers with care and speed. Without them, the ability to meet the needs of our DIY and professional customers would not be possible. On behalf of Advance, we congratulate Sprayway and all our winning vendors, and we thank all our vendor partners for their generous contributions to support our veteran nonprofits.” Advance kicked off the evening by awarding its 2022 New Vendor Partner of the Year award to two suppliers. The first recipient was Test Rite Products Corporation for their help in designing and delivering packaging for the DieHard® Power Tools product line. Delivering work to exact specifications and without delay, their speed and execution were key contributors to the new product line’s successful launch. Trensor, LLC was named co-recipient of the New Vendor Partner of the Year award for their instrumental role in Advance’s private label engine management brand changeover. Trensor contributed to the changeover by overcoming shifts to the execution timeline, providing funding to support competitive products and altering their shipping methods to ensure successful execution. For the second year in a row, Clarios was named Strategic Initiative Vendor Partner of the Year. Recognized for their role in the innovation of the DieHard® brand, they helped deliver a first-to-market battery designed specifically for hybrid and electric vehicles. Additionally, their partnership helped Advance’s DieHard® AGM battery receive circular economy validation from UL Solutions, the world’s first automotive battery to do so. Their collaboration and expertise have helped Advance experience record category growth while meeting an array of customer needs. Dorman was named Superior Availability Vendor Partner of the Year for providing Advance with exemplary service, availability and innovative solutions. A long-time partner of Advance operating in more than 180 product categories, Dorman’s ability to deliver new and innovative products and solutions has allowed Advance to become a leader within the professional installer market. GB Remanufacturing Incorporated was named Professional Excellence Vendor Partner of the Year. A leader in the automotive aftermarket with 36 years in the industry, their team constantly works to find creative and mutually beneficial solutions. Their product expertise, excellent order fill and on-time deliveries enable Advance to drive sales growth. dentsu X was named Marketing Partner of the Year for their continued media partnership with Advance. Involved in all paid media efforts, their creative work has led to highly successful campaigns, including the launch of Advance’s new brand voice and superfan, Ed Vance. Their adaptability to changes in Advance’s media approach has allowed for valuable media efforts that meet key company goals. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of July 16, 2022 Advance operated 4,724 stores and 312 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,329 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com. View the full article

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RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourself customers, announced its financial results for the second quarter ended July 16, 2022. "In Q2 we delivered another quarter of growth in net sales and adjusted operating income, underscored by adjusted operating income margin expansion," said Tom Greco, president and chief executive officer. "Our adjusted operating income margin rate of 11.7% was the highest-level AAP has achieved in seven years. This helped enable a quarterly record for adjusted diluted earnings per share of $3.74, which increased 10.0% compared with Q2 2021 and 72% compared with Q2 2019. Additionally, we returned $291 million dollars to our shareholders through a combination of share repurchases and our quarterly cash dividend. This was despite a more challenging quarter on the topline than we expected, with net sales growing 0.6% and comparable store sales declining 0.6%. Our deliberate move to increase owned brand penetration reduced both net and comp sales by approximately one full point. Our DIY omnichannel sales were particularly challenged in the quarter and we expect that high inflation and significant year over year increases in fuel prices will continue to pressure DIY consumers in the back half of the year. As a result, we are updating our 2022 full year guidance. “While our industry is not immune to the inflationary pressures consumers and broader retail have been experiencing, we believe our industry is well positioned for the long-term within the broader retail space to withstand these headwinds. In addition, our team continues to make progress on our strategic initiatives to drive long-term shareholder value. We remain relentlessly focused on customer service, parts availability and reliability of delivery. We're confident this will help enable sustainable sales growth, margin expansion and strong cash returns." View the full article

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ONLINE ONLY: Save 15% OFF on your Order! Use Code SAVE15 https://shop.advanceautoparts.com/ Valid through May 1st, 2022 at 11:59pm ET. Detailed Terms and Conditions. Promo Codes At Your One-Stop Automotive Parts Store Keeping a car up and running can be expensive, even when you’re buying and installing the new parts yourself. But, with an Advance Auto Parts coupon code, you’ll be able to save more on the parts you need to keep your car on the road. Advance Auto Parts is the leader in automotive parts and we offer some of the best prices on everything from lawn and garden batteries to brakes. And, with our exclusive Advance Auto Parts coupons and discount codes, your savings will be even more substantial. Just browse our latest Advance Auto Parts promo codes above to find the discount or offer that you can use. Then, just apply your promo code when prompted during checkout to see just how much you’ll save. Take advantage of Advance Auto Parts discounts today so you can keep your engine purring for less.