AAP Earnings Prediction
The chart below shows how AAP performed 10 days before and after its earnings report, based on data from the past quarters. Typically, AAP sees a +11.51% change in stock price 10 days leading up to the earnings, and a -6.14% change 10 days following the report. On the earnings day itself, the stock moves by -5.79%. This data can give you a slight idea of what to expect for the next quarter's release.
AAP Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
2.15B
-21.00%
-19.94%
Gross Margin
42.27%
16.48%
1.78%
Operating Margin
0.02%
101.24%
-99.25%
Net Margin
-1.18%
-34.08%
-170.24%
EPS
-0.10
-87.80%
-113.33%
No Data Available
AAP Earnings Analysis
ADVANCE AUTO PARTS INC Corporation (AAP.N) Earnings Conference Call
Positive
Cash Liquidity Boost: 1. Strong Cash Position: The completion of the Worldpac sale added $1.5 billion of liquidity to Advance Auto Parts' balance sheet, resulting in approximately $2 billion in cash, exceeding the company's total debt position.
Gross Profit Margin Improvement: 2. Improved Gross Profit Margin: Gross profit from continuing operations was $908 million, representing 42.3% of net sales, an improvement of approximately 540 basis points year-over-year, driven by stabilization of product costs and pricing investments.
Adjusted Operating Income Recovery: 3. Positive Adjusted Operating Income: Adjusted operating income from continuing operations was $16.7 million, translating to 80 basis points as a percentage of net sales, a significant recovery from a negative 3.3% in the prior year.
Employee Retention Improvement: 4. Reduction in Turnover: The company reported a nearly 700 basis point reduction in turnover for four key field roles over the past year, indicating improved employee retention and operational stability.
Operating Income Margin Target: 5. Strategic Growth Plan: Advance Auto Parts aims to achieve an adjusted operating income margin of approximately 7% by the end of fiscal 2027, supported by identified opportunities for over 500 basis points of margin improvement through operational efficiencies.
Negative
Net Sales Decline: 1. Declining Net Sales: Net sales from continuing operations decreased by 3% year-over-year to $2.1 billion, reflecting ongoing sales softness and macroeconomic headwinds.
Decline in Store Sales: 2. Negative Comparable Store Sales: Comparable store sales fell by 2.3%, driven by a decline in consumer spending and impacted by external events such as hurricanes and a system outage, which accounted for an estimated 50 basis points of headwind.
SG&A Expense Analysis: 3. Increased SG&A Expenses: Adjusted SG&A expenses remained flat year-over-year at $891 million, but as a percentage of net sales, it increased to 41.5%, indicating a 130 basis point deleverage due to lower sales.
Operating Income Challenges: 4. Operating Income Loss: Adjusted operating income from continuing operations was only $16.7 million, representing a mere 0.8% of net sales, compared to a negative 3.3% in the prior year, highlighting ongoing profitability challenges.
Store Closures Revenue Impact: 5. Store Closures Impact: The decision to close over 700 locations is expected to reduce net sales by approximately $700 million, indicating a significant contraction in revenue as part of the company's restructuring efforts.
AAP FAQs
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AAP Earning Call Sentiment
Advance Auto Parts, Inc. (AAP) Q3 2024 Earnings Call Transcript
1.0x
00:00
00:00
AAP.N
3.89%Positive
The earnings call summary presents a mixed picture. The financial performance shows a decline in net sales and comparable store sales, but there are improvements in gross profit and operating income. The Q&A section reveals management's confidence in strategic initiatives but also highlights risks and uncertainties, such as execution challenges and unclear cost impact. The sale of Worldpac boosts liquidity, but the absence of a share buyback or dividend program limits shareholder returns. Overall, the sentiment is neutral with potential for slight positive movement due to strategic actions and improved margins.
