Advance Auto Parts, Inc. (NYSE: AAP), a leading retailer of automotive
aftermarket parts, accessories, batteries, and maintenance items, today
announced its third quarter earnings per diluted share (EPS) are
anticipated to be $1.21, a decrease of 14.2% versus the third quarter
last year of $1.41.
The decline in EPS was driven by a decrease in total sales for the third
quarter of approximately 0.5% to $1.46 billion, as compared with total
sales during the third quarter of fiscal 2011. The sales decrease
reflected a comparable store sales decrease of approximately 1.8%,
partially offset by the net addition of 82 new stores during the past 12
months. Additionally, the decrease in the Company’s EPS was driven by
increased promotions, higher spending on in-store labor and advertising
in an effort to drive consumer traffic and maintain market share in the
softer consumer environment, and expense deleverage as a result of the
lower sales volume.
The Company anticipates that its operating performance will continue to
be constrained for the balance of the year driven by continued softness
in its colder weather markets, lower overall consumer spending on
maintenance and failure parts and continued investments in the Company’s
strategic initiatives primarily focused on growing its Commercial sales.
The Company does not anticipate any changes to its previously shared
annual outlook for SG&A per store to decrease 1% to 2% and its
previously shared annual outlook for the Company’s gross profit rate to
improve modestly for the year. As a result, the Company now anticipates
its full year EPS outlook for fiscal 2012 will be in the range of $5.05
to $5.15.
“Our efforts to invest in the continued long-term growth of Commercial
and increase customer traffic helped drive improvements in our comp
store sales from the second quarter to the third quarter of this year
and strengthened our positive Commercial comps for Advance stores
through the quarter. Despite these improved sales trends, we were still
unable to achieve our profitability expectations and fully mitigate the
weak consumer demand within several of our markets, especially in our
colder weather markets,” said Darren R. Jackson, President and Chief
Executive Officer. “As we look beyond our current quarter, we believe
the industry fundamentals remain positive and that we are well
positioned with our initiatives to fuel our future growth. These
initiatives include the successful launch of our Advance Commercial
Credit program, our new distribution center in Remington, IN, our recent
expansion into New York City and our continued momentum from our B2B
online ordering capability, hub investments and inventory upgrades.”
Earnings Release and Investor Conference Call
The financial results contained in this release are preliminary, and
therefore, subject to the Company's completion of its customary
quarterly closing and review procedures. Further details will be
released during the Company's previously scheduled earnings release and
conference call.
The Company will report its third quarter financial results before
market open on Thursday, November 8, 2012. The Company will host a
conference call scheduled to begin at 10:00 a.m. Eastern Time on
Thursday, November 8, 2012, which will be made available concurrently on
the Company’s website, www.AdvanceAutoParts.com.
The call is also available by dialing (866) 908-1AAP. The pass code is
Advance Auto Parts. A replay of the conference call will available on
the Advance website for one year.
About Advance Auto Parts
Headquartered in Roanoke, Va., Advance Auto Parts, Inc., a leading
automotive aftermarket retailer of parts, accessories, batteries, and
maintenance items in the United States, serves both the do-it-yourself
and professional installer markets. As of October 6, 2012, the Company
operated 3,727 stores in 39 states, Puerto Rico, and the Virgin Islands.
Additional information about the Company, employment opportunities,
customer services, and online shopping for parts, accessories and other
offerings can be found on the Company's website at www.AdvanceAutoParts.com.
Certain statements contained in this release are forward-looking
statements, as that statement is used in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements address future
events or developments, and typically use words such as believe,
anticipate, expect, intend, plan, forecast, outlook or estimate. These
statements discuss, among other things, expected growth and future
performance, including store growth, capital expenditures, comparable
store sales, SG&A, operating income, gross profit rate, free cash flow,
profitability and earnings per diluted share for fiscal year 2012. These
forward-looking statements are subject to risks, uncertainties and
assumptions including, but not limited to, competitive pressures, demand
for the Company's products, the market for auto parts, the economy in
general, inflation, consumer debt levels, the weather, business
interruptions, information technology security, availability of suitable
real estate, dependence on foreign suppliers and other factors disclosed
in the Company's 10-K for the fiscal year ended December 31, 2011 on
file with the Securities and Exchange Commission. Actual results may
differ materially from anticipated results described in these
forward-looking statements. The Company intends these forward-looking
statements to speak only as of the time of this news release and does
not undertake to update or revise them as more information becomes
available.
