Advance Auto Parts Q2 EPS Beats Estimate; Raises FY21 Guidance

  • Advance Auto Parts Inc AAP reported second-quarter FY21 sales growth of 5.9% year-on-year, to $2.649 billion, managing to surpass the consensus of $2.62 billion.
  • Comparable store sales increased 5.8%. On a two-year stack, comparable store sales increased 13.3%. In Q1 of FY21, comparable store sales increased 24.7%.
  • Gross profit rose 8.4% Y/Y to $1.2 billion with a margin of 44.9%, a 110 basis points increase.
  • Adjusted gross profit increased 11.7% to $1.2 billion, with the margin expanding 239 basis points to 46.4%.
  • The operating margin was 9.2%, a 126 basis points decrease and operating income for the quarter fell 6.8% to $244.9 million. Adjusted operating income margin expanded 11 basis points to 11.4%.
  • Adjusted EBITDAR of $1.8 billion rose 11.5% Y/Y
  • Adjusted EPS of $3.40 beat the analyst consensus of $3.03.
  • Advance Auto Parts held $809.3 million in cash and equivalents as of July 17, 2021.
  • Cash provided by operating activities year to date totaled $776.2 million with a free cash flow of $646.6 million.
  • The company's regular cash dividend of $1.00 per share is payable on October 1, 2021, to all common stockholders of record as of September 17, 2021.
  • Outlook: Advance Auto Parts raised FY21 sales to $10.6 billion - $10.8 billion (prior $10.4 billion - $10.6 billion) versus the consensus of $10.66 billion.
  • Price Action: AAP shares are trading lower by 2.10% at $203.40 in premarket on the last check Tuesday.
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