Advance Auto Parts Meets Earnings Estimates

By Chris Lange Published Aug 13, 10:05AM EDT

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Advance Auto Parts Inc. (NYSE: AAP) reported its fiscal second-quarter financial results before the markets opened on Thursday. The retailer had $2.27 in earnings per share (EPS) on $2.37 billion in revenue, compared to Thomson Reuters consensus estimates of $2.25 in EPS on $2.38 billion in revenue. In the same period of the previous year, had $2.08 in EPS on $2.35 billion in revenue.

The board of directors declared a regular quarterly cash dividend of $0.06 per share, to be paid on October 2, for stockholders of record as of September 18.

As of mid-July, the company operated 5,252 stores and 117 Worldpac branches and served roughly 1,300 independently owned Carquest stores.

Mike Norona, executive vice president and chief financial officer, said:

Our teams once again delivered on our synergy expectations, expanded our core gross margins and demonstrated expense discipline to grow our Comparable Operating Income 8.7% in the quarter. We continue to stay focused on our base business while meeting our integration milestones and remain on pace to deliver against our full-year guidance for Comparable Cash EPS in the range of $8.10 to $8.30 including achievement of our full-year synergy targets.

In other guidance, the company expects to close 50 stores in the second half of 2015 and achieve its 12% operating profit target in 2016. Consensus estimates call for $8.26 in EPS on $9.90 billion in revenue for the full year.

Darren R. Jackson, CEO of Advance Auto Parts, commented on earnings:

I would like to thank all our Team Members for their hard work during the second quarter of 2015. Our second quarter comparable store sales increased 1.0% and Comparable Cash EPS grew 9.1% to $2.27. These results were in-line with our expectations given the continuing demands of the General Parts integration. Our integration continues to be on-track overall along with our sales and profitability.

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Free cash flow increased to $216.3 million through the second quarter of fiscal 2015 from $214.3 million through the second quarter of fiscal 2014. On the books, the company had cash and cash equivalents of $114.5 million, compared to 67.4 million in the same period from the previous year.

Shares of Advance Auto Parts were up 4.1% to $179.24 early Thursday, in its 52-week trading range of $126.25 to $180.16. The stock has a consensus analyst price target of $174.67.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.