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Advance Auto's (AAP) Q4 Earnings Beat, Revenues Increase Y/Y

Advance Auto Parts, Inc. AAP reported adjusted earnings of $2.88 per share for fourth-quarter 2022, an increase of 39.1% from the year-ago quarter figure. The reported figure outpaced the Zacks Consensus Estimate of $2.41 a share. Advance Auto generated net revenues of $2,474 million, surpassing the Zacks Consensus Estimate of $2,422 million and increasing 3.2% from the year-ago reported figure.

Comparable store sales increased 2.1%. Adjusted operating income increased 23.6% year over year to $218.5 million. Adjusted SG&A expenses totaled $942.5 million for fourth-quarter 2022, down 0.4% year over year.

Advance Auto Parts, Inc. Price, Consensus and EPS Surprise

 

Advance Auto Parts, Inc. Price, Consensus and EPS Surprise
Advance Auto Parts, Inc. Price, Consensus and EPS Surprise

Advance Auto Parts, Inc. price-consensus-eps-surprise-chart | Advance Auto Parts, Inc. Quote

 

Financial Position

Advance Auto had cash and cash equivalents of $269.3 million as of Dec 31, 2022 compared with $601.4 million on Jan 1, 2022. Total long-term debt was $1,188.3 million as of Dec 31, 2022, up from $1,034.3 million on Jan 1, 2022. Year to date, net cash provided by operating activities and FCF totaled $722.2 million and $298.2 million, respectively.

Dividend & Share Repurchase

AAP’s board declared a cash dividend of $1.50 per share, which would be paid out on Apr 28, 2023, to all common shareholders of record as of Apr 14, 2023.

During the quarter under discussion, AAP repurchased around 0.5 million shares for $75 million at an average price of $150 per share. At the end of fourth-quarter 2022, AAP had $947.3 million remaining under its share repurchase program.

Store Update

As of Dec 31, 2022, AAP operated 4,770 stores and 316 Worldpac branches in the United States, Canada, Puerto Rico and U.S. Virgin Islands. It also served 1,311 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean Islands.

2023 Guidance

Advance Auto estimates 2023 net sales in the band of $11.4-$11.6 billion. Comparable store sales are envisioned to range between 1%-3%. Adjusted operating income margin is envisioned in the range of 7.8%-8.2%. Advance Auto expects its 2023 capex to be in the range of $300-$350 million. The company targets a minimum FCF of $400 million. Diluted EPS is forecast between $10.2 and $11.2. It aims to open 60 to 80 new stores this year.

Zacks Rank & Key Picks

AAP currently has a Zacks Rank #5 (Strong Sell).

A few top-ranked players in the auto space include Bayerische Motoren Werke BAMXF, Wabash National WNC and Modine Manufacturing MOD, all sporting a Zacks Rank #1 (Strong Buy).

Bayerische is a multi-brand automobile manufacturer that focuses on the premium segments of the worldwide automobile and motorcycle markets and has three brands: BMW, MINI and Rolls-Royce. The Zacks Consensus Estimate for BAMXF’s 2023 sales implies year-over-year growth of 1.88%.

Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimates for WNC’s 2023 sales and earnings imply year-over-year growth of 13.06% and 24%, respectively.

Modine operates primarily in a single industry consisting of the manufacture and sale of heat transfer equipment. The Zacks Consensus Estimates for MOD’s 2023 sales and earnings imply year-over-year growth of 11.43% and 43.09%, respectively.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report

Wabash National Corporation (WNC) : Free Stock Analysis Report

Modine Manufacturing Company (MOD) : Free Stock Analysis Report

Bayerische Motoren Werke AG (BAMXF) : Free Stock Analysis Report

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