Yahoo Finance Why Is Advance Auto Parts (AAP) Down 6.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Advance Auto Parts (AAP). Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Advance Auto Parts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Advance Auto Q1 Earnings Miss Estimates, Decline Y/Y
Advance Auto reported adjusted earnings of 67 cents per share for first-quarter 2024, which missed the Zacks Consensus Estimate of 69 cents. The company reported an adjusted earnings per share (EPS) of 72 cents in the year-ago quarter.
Advance Auto generated net revenues of $3.41 billion, which missed the Zacks Consensus Estimate of $3.43 billion on lower-than-expected comparable store sales. Comparable store sales decreased 0.2% year over year. We projected a rise of 0.7% for the same. The top line dipped 0.3% year over year.
AAP reported an operating income of $86 million, which declined from $97.9 million recorded in the corresponding quarter of 2023. SG&A expenses totaled $1.34 billion for first-quarter 2024, down 1.4% year over year.
The company had cash and cash equivalents of $451 million as of Apr 20, 2024, compared with $503.5 million as of Dec 30, 2023. Total long-term debt was $1,787.2 million as of Apr 20, 2024, compared with $1,786.4 million as of Dec 30, 2023. In the first quarter of 2024, net cash provided by operating activities and negative free cash flow totaled $2.68 million and $46.3 million, respectively.
AAP’s board declared a cash dividend of 25 cents per share, which will be paid out on Jul 26, 2024, to all common shareholders of record as of Jul 12, 2024.
As of Apr 20, 2024, the company operated 4,777 stores and 320 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also served 1,152 independently owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean islands.
Advance Auto expects 2024 net sales in the band of $11.30-$11.40 billion. Comparable store sales are projected in the range of 0-1%. The operating income margin is envisioned in the range of 3.2-3.5%.
AAP expects 2024 capex in the range of $200-$250 million. The company projects a minimum free cash flow of $250 million. Earnings per share are expected between $3.75 and $4.25.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -21.61% due to these changes.
VGM Scores
At this time, Advance Auto Parts has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Advance Auto Parts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Advance Auto Parts belongs to the Zacks Automotive - Retail and Wholesale - Parts industry. Another stock from the same industry, AutoZone (AZO), has gained 6.6% over the past month. More than a month has passed since the company reported results for the quarter ended May 2024.
AutoZone reported revenues of $4.24 billion in the last reported quarter, representing a year-over-year change of +3.5%. EPS of $36.69 for the same period compares with $34.12 a year ago.
For the current quarter, AutoZone is expected to post earnings of $53.81 per share, indicating a change of +15.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
AutoZone has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Advance Auto Parts, Inc. (AAP): Free Stock Analysis Report
AutoZone, Inc. (AZO): Free Stock Analysis Report
