Advance Auto Profit Rises, Sales In Line - Update

(RTTNews) - Advance Auto Parts Inc (AAP) Thursday reported an increase in third-quarter profit as the auto parts retailer benefited from a near 51 percent jump in sales, partly offset by lower gross margins. Sales were in line with Wall Street estimates, and benefited from the purchase of General Parts International, higher comparable store sales, as well as the addition of new stores.

The company reaffirmed its earnings guidance for the full year, which is indicated to fall short of current Wall Street estimates. Advance Auto shares is currently trading down 3.6 percent on the New York Stock Exchange.

Advance Auto, based in Roanoke, Virginia, posted third-quarter net earnings of $122.2 million or $1.66 per share, compared with $103.8 million or $1.42 per share last year.

Results for the quarter included amortization costs of $0.08 per share and integration costs of $0.14 per share related to the purchase of General Parts International Inc.

Excluding items, comparable cash earnings for the quarter were $1.89 per share, compared with $1.48 per share a year ago.

On average, 23 analysts polled by Thomson Reuters expected earnings of $1.88 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the third quarter increased 50.6 percent to $2.29 billion from $1.52 billion in the prior year. Eighteen analysts had a consensus sales estimate of $2.29 billion for the quarter.

Comparable store sales for the quarter rose 1.5 percent.

Gross margin for the quarter dropped to 45.2 percent from 50.2 percent a year ago, hurt by the higher mix of commercial sales which has a lower gross margin rate resulting from the acquisition of General Parts.

For the full year, Advance Auto still expects comparable cash earnings of $7.50 to $7.60 per share, while analysts currently expect $7.70 per share.

In January, Advance Auto closed the purchase of General Parts International, a distributor of original equipment and replacement products. The deal enhanced Advance Auto's presence in north America and expanded its offering in products such as paint and heavy duty.

As of October 4, Advance Auto had 5,305 company-operated stores.

AAP is trading at $144.16, down $5.21 or 3.49%%, on a volume of 1.5 million shares on the NYSE.