Advance Auto Parts Posts Q2 Earnings Beat

8/18/20

By Jay Wilson, NC BIZ News

Advance Auto Parts, the auto parts retailer, reported stronger-than-expected second-quarter earnings results on Tuesday, as consumers funded DIY (“do it yourself”) vehicle repairs and maintenance projects with COVID-19 stimulus checks.

For the second quarter ended July 11, Advance Auto Parts reported diluted earnings per share of $2.74, an increase of 58.4 percent from the $1.73 reported in the same period a year ago. On average, analysts had expected EPS of $1.98.

Revenue for the quarter increased 7.3 percent to $2.5 billion, outpacing Wall Street’s forecasts of $2.38 billion.

Meanwhile, the closely-followed comparable-store sales jumped 7.5 percent in the quarter, the highest quarterly growth rate in nearly a decade.

The company attributed the sales boost to its DIY (“do it yourself”) omnichannel business, which includes sales from brick-and-mortar retail locations, online purchases picked up in stores, and e-commerce orders shipped home. The company called out government stimulus checks as helping fuel these sales.

“Without question, we benefited from a surge in industry demand in the quarter fueled by the government stimulus, unemployment benefits and the impact COVID-19 had on consumer behavior in terms of how they repaired and maintained their vehicles,” CEO Tom Greco said in the earnings release.

During the start of the third quarter, Advance Auto Parts said it’s continued to see “strong growth” in its DIY omnichannel business as more consumers look for contact-free options for car maintenance.

Advance Auto Parts withdrew its guidance in early April because of the uncertainty surrounding the COVID-19 pandemic and didn’t provide an update in the earnings report.

Elsewhere, during the quarter, the company closed 55 locations and opened 4 new stores, ending the period with 4,986 locations, compared to 5,037 stores at the end of 2019.

After surging in the pre-market trading session, shares of Advance Auto Parts (AAP) were last trading up 1.96 percent, or $3.15, at $164.15 a share.

Recent Deals

Interested in advertising your deals? Contact Edwin Warfield.