Advance Auto Parts Delivers Strong Q1 Results as Profit Soars

Advance Auto Parts (AAP), an automotive after-market parts provider in North America, announced strong first-quarter results.

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However, shares dropped 1.7% to close at $191.33 on June 2.

In Q1, net sales came in at $3.3 billion, which was slightly above the Street’s estimates of $3.28 billion and jumped 23.4% from the year-ago period.

Adjusted earnings came in at $3.34 per share, beating the consensus estimates of $3.08 per share, and soared 234% year-over-year.

Comparable store sales increased 24.7%. (See Advance Auto Parts stock analysis on TipRanks)

Advance Auto Parts’ CFO Jeff Shepherd said, “We continue to see top-line sales strength in the early weeks of the second quarter of 2021.”

Shepherd further added, “Through the first four weeks of Q2, our comp sales continue to trend in the mid-teens and on a two-year stack are comparable with our Q1 2021 increase of 15.4%. While we’re still anticipating significant volatility throughout the balance of this year due to macro-economic factors, we’re again updating our full year guidance to reflect this continued top-line momentum.”

Advance Auto Parts raised full-year 2021 guidance. It now expects net sales to be in the range of $10.4 – $10.6 billion, up from the previous forecast of $10.2-$10.4 billion. Comparable store sales growth is now envisioned in the band of 4% – 6% versus previous expectations of 2%-4%.

Following the Q1 earnings release, Oppenheimer analyst Brian Nagel assigned a Hold rating on the stock.

Nagel commented, “We look quite favorably upon recent, upbeat trends at AAP and applaud senior management of the chain for continuing to pursue successfully key strategic repositioning efforts, all the while navigating well a challenging and fluid sector and macro backdrop.”

The analyst further added, “We continue to update our financial model for AAP and review recent trends and ongoing initiatives at the chain.”

Consensus among analysts is a Strong Buy based on 12 Buys versus 3 Holds. The average analyst price target stands at $221.38 and implies upside potential of 15.7% to current levels. Shares have gained 34.4% over the past year.

TipRanks data shows that financial blogger opinions are 100% Bullish on Advance Auto Parts, compared to a sector average of 71%.