Advance Auto earnings up in second quarter

The Roanoke-based auto parts seller’s earnings topped Wall Street expectations, but revenue fell short.

Associated Press

Friday, August 9, 2013

RICHMOND — Advance Auto Parts Inc. said Thursday that its second-quarter net income rose 17 percent as it benefited from its acquisition of a Northeast car parts supplier and its profit margins expanded.

Its earnings topped Wall Street expectations, but revenue was short.

The Roanoke seller of auto parts and batteries posted earnings of $116.8 million, or $1.59 per share, for the quarter ended July 13, up from $99.6 million, or $1.34 per share, a year ago.

Advance Auto Parts, which operates more than 3,990 stores in the U.S., Puerto Rico and the Virgin Islands, said revenue increased 6 percent to $1.55 billion as it benefited from its January acquisition of privately held Northeast car parts supplier B.W.P. Distributors Inc. and the addition of 175 new stores over the last 12 months.

Analysts polled by FactSet expected earnings of $1.49 per share on revenue of $1.6 billion.

Revenue at stores open at least a year fell less than one percent. That’s an important measure for retailers because it excludes the volatility from newly opened or closed stores. During the quarter, the company opened 26 stores and closed five. It plans to open its 4,000th store in Montgomery, N.Y., on Friday.

In a conference call with investors, CEO Darren Jackson said while the company was disappointed in its sales at stores open at least a year, long-term fundamentals remain positive as the age of vehicles continues to increase, gas prices are stabilizing and the number of miles being driven is increasing.

However, Jackson said that the economic environment remains challenging with higher payroll taxes, high unemployment stressing the finances of its core customers.

“In an economy of necessity, consumers are only performing repairs that are absolutely necessary to keep their vehicles on the road,” he said.

Monday, August 12, 2013