Shares of Advance Auto Parts (NYSE:AAP) are in focus today after the automotive aftermarket parts provider swung to a loss in the fourth quarter but issued an optimistic financial outlook. During the quarter, revenue ticked lower by 0.4% year-over-year to $2.46 billion, missing estimates by $10 million. Further, the company reported a net loss per share of $0.59 compared to an EPS of $2.88 in the year-ago period. Analysts had estimated an EPS of $0.20 for the period.
AAP is focusing on driving performance and operational efficiency in the current business environment. In Q4, the company undertook annualized selling, general, and administrative (SG&A) cost reductions to the tune of $150 million. It has launched further actions to lower costs by $50 million on an annualized basis. AAP is also consolidating its supply chain into a single unified network.
In Q4, AAP’s comparable store sales declined by 1.4%, and gross profit declined by nearly 12% to $950.8 million. Further, lower net income and working capital resulted in its net cash from operating activities declining to $300 million from $700 million in the year-ago period. For Fiscal Year 2024, AAP expects net sales in the range of $11.3 billion to $11.4 billion. EPS for the year is anticipated in the range of $3.75 to $4.25. In addition, comparable store sales growth is expected in the flat to 1% bracket.
Is AAP a Good Stock to Buy?
AAP’s stock price has rallied by nearly 28% over the past three months. Still, the stock remains nearly 54% lower over the past year. Overall, the Street has a Hold consensus rating on Advance Auto Parts alongside an average price target of $49. However, analysts’ views on the stock could see a revision following today’s earnings report.
Read full Disclosure