Advance Auto Elements Q1 outcomes present continued progress


Automotive aftermarket components supplier Advance Auto Elements, Inc. introduced its monetary outcomes for the primary quarter ended April 23, 2022, its eighth consecutive quarter of progress, though climate and stimulus modifications decreased DIY outcomes.

“Within the first quarter of 2022, we gave our 8”th constant quarter of comparable retailer gross sales, adjusted working earnings and adjusted earnings per share progress,” mentioned Tom Greco, president and chief govt officer of Advance Auto Elements, Inc.

“We began 2022 with sturdy mid-single-digit progress in the course of the first ten weeks of our 16-week quarter. In the course of the previous six weeks, we skilled a comp decline pushed by our DIY omnichannel enterprise. This was primarily a results of a sluggish begin to the spring gross sales season attributable to cooler temperatures and better rainfall, together with headwinds from the anticipated lap of boosting DIY gross sales from the 2021 stimulus. These headwinds have been mitigated with comparable gross sales progress inside our full-year steerage vary in the course of the first 4 weeks of our second quarter.

“We imagine that the investments we’ve got made within the firm, our crew members in addition to our provider companions are enabling us to capitalize on rising alternatives whereas specializing in the disciplined execution of our long-term strategic plan. In keeping with this, We proceed to construct and strengthen a differentiated buyer providing behind improved components availability, industry-leading innovation and a superior on-line and in-store expertise.

“This consists of right this moment’s announcement that Advance Auto Elements is the primary to market with our unique Diehard EV Battery for Hybrid and Battery Electrical Autos. This modern 12-volt battery is best and longer lasting for the rising energy calls for of hybrid and electrical automobiles. An enduring battery will present efficiency.

“We returned greater than $400 million in money to shareholders within the quarter by means of a mix of money dividends and share repurchases. In keeping with our balanced strategy to returning money to shareholders, our Board additionally accredited a quarterly money dividend of $1.50 per share. Granted. We’re assured that we’re properly positioned to execute our strategic initiatives in the course of the the rest of 2022 to ship worthwhile progress and top-quartile whole shareholder returns over the long run.

Advance Auto Elements First Quarter 2022 Outcomes(1)

All figures in USD.

  • Internet gross sales up 1.3% to $3.4 billion
  • comparable retailer gross sales(2) elevated by 0.6%; Comparable retailer gross sales elevated 25.3% over the two-year stack
  • Gross revenue elevated 1.5% to $1.5 billion; adjusted gross revenue(3) grew 6.6% to $1.6 billion
  • Gross revenue margin was flat; adjusted gross revenue margin(3) Internet gross sales rose 231 foundation factors to 47.1%
  • SG&A grew 5.7% to $1.3 billion; Adjusted SG&A(3) grew 7.8% to $1.3 billion
  • SG&A was 38.6% of internet gross sales in comparison with 37.0% of internet gross sales; Adjusted SG&A(3) Eradicated 229 foundation factors for 38.1% of internet gross sales
  • Working earnings declined 19.4% to $203.3 million; adjusted working earnings(3) up 1.6% to $303.6 million
  • working earnings margin declined 155 foundation factors to six.0%; Adjusted Working Earnings Margin(3) was flat
  • Diluted EPS declined 19.6% to $2.26 in comparison with $2.81 within the first quarter of 2021; adjusted diluted eps(3) elevated by 6.9% to $3.57 in comparison with the primary quarter of 2021
  • Internet money utilized in working actions was $54.9 million; free money move(3) There was an outflow of $169.8 million
  • Returned $403 million to shareholders by means of a mix of share repurchases and money dividends
  • 35 new shops opened within the first quarter

Complete gross sales within the first quarter of 2022 had been $3.4 billion, up 1.3% from the primary quarter of the earlier yr. This was primarily pushed by year-over-year progress in our skilled and unbiased companies. Comparable retailer gross sales elevated 0.6% for the primary quarter of 2022.

The corporate’s GAAP gross revenue margin of 44.6% was flat in comparison with the prior yr’s first quarter. Adjusted gross revenue elevated 6.6% to $1.6 billion. Adjusted gross revenue margin was 47.1% of internet gross sales within the first quarter of 2022, a rise of 231 foundation factors from the primary quarter of 2021. This was primarily pushed by enhancements in class administration, together with strategic pricing and proprietary model enlargement. These enhancements had been partially offset by the price of inflation and unfavorable channel and product combine.

The corporate’s GAAP SG&A was 38.6% of whole gross sales in Q1 2022 as in comparison with 37.0% in Q1 2021. Adjusted SG&A elevated to $1.3 billion from $1.2 billion within the prior yr quarter.

As a share of internet gross sales, adjusted SG&A within the first quarter of 2022 was 38.1%, down 229 foundation factors in comparison with the primary quarter of 2021. That is primarily attributable to enhance in retailer labour, gasoline prices in addition to prices related to start-up opening of latest shops and channel combine.

These prices had been partially offset by a year-on-year lower in financial savings related to COVID-19-related bills and incentive compensation in addition to SG&A discount efforts.

On a GAAP foundation, the corporate’s working earnings was $203.3 million, or 6.0% of internet gross sales, in comparison with 7.6% within the first quarter of 2021. The corporate’s adjusted working earnings for the primary quarter of 2022 was $303.6 million, a rise of 1.6. % versus the prior yr’s first quarter. Adjusted working earnings margin of 9.0% of internet gross sales was flat within the first quarter in comparison with the prior yr’s first quarter.

The corporate’s efficient tax price was 23.7% within the first quarter of 2022, in comparison with 24.3% within the first quarter of 2021. On a GAAP foundation, the corporate’s diluted EPS was $2.26, in comparison with $2.81 within the first quarter of 2021. The corporate’s adjusted diluted EPS for the primary quarter of 2022 was $3.57, a rise of 6.9% in comparison with the prior yr’s first quarter.

Internet money utilized in working actions was $54.9 million in the course of the first quarter of 2022, in comparison with internet money offered by working actions of $329.9 million in the identical interval prior yr. The lower was primarily pushed by decrease internet earnings and dealing capital. Free money move in the course of the first quarter of 2022 was a money outflow of $169.8 million, in comparison with a money influx of $259.0 million within the prior yr’s first quarter.

(1) All comparisons are based mostly on the identical time interval final yr.
(2) Comparable retailer gross sales don’t embody gross sales of independently owned Carquest places.
Advance Auto Elements, Inc. and subsidiaries
Condensed Consolidated Assertion of Operations
(In 1000’s of USD, excluding knowledge per share) (Unaudited) sixteen weeks finish
23 April 2022 (1) April 24, 2021 (1)
product sales $3,374,210 3,330,370
Price of gross sales together with buy and storage prices 1,867,690 1,845,444
Gross revenue 1,506,520 1,484,926
Promoting, Normal and Administrative Bills 1,303,250 1,232,797
working earnings 203,270 252,129
Different, pure:
curiosity expense (12,868) (11,191)
Loss on early redemption of senior unsecured notes (7,408) ,
different earnings, internet 136 4,836
whole different, pure (20,140) (6,355)
Earnings earlier than provision of earnings tax 183,130 245,774
provision for earnings taxes 43,339 59,844
Internet earnings 139,791 185,930
primary earnings per share $2.28 $2.83
weighted common frequent shares excellent 61,261 65,688
diluted earnings per frequent share $2.26 $2.81
weighted common frequent shares excellent 61,732 66102
(1) These preliminary condensed consolidated statements of operations are ready in step with the corporate’s beforehand ready consolidated statements of operations filed with the SEC, however don’t embody the footnotes required by GAAP.

capital allocation

In the course of the first quarter of 2022, the Firm repurchased 1.1 million shares of its frequent inventory in reference to its share repurchase program at a complete value of $248.2 million, or a mean value of $231.41 per share. On the finish of the primary quarter of 2022, the corporate had $1.3 billion remaining below the share repurchase program.

On Could 18, 2022, the corporate declared an everyday money dividend of $1.50 per share to be paid on July 1, 2022 to all frequent shareholders of document as of June 17, 2022.

Full 12 months 2022 Steering

“Regardless of the volatility within the broader macro surroundings, we proceed to execute in opposition to our long-term plans,” mentioned Jeff Shepherd, govt vp and chief monetary officer. “Based mostly on our Q1 outcomes and 2022 outlook, we’re reaffirming our 2022 steerage together with comparable retailer gross sales progress, adjusted working margin enlargement and double-digit adjusted earnings per share progress. Importantly, we’re growing our adjusted diluted EPS steerage vary barely yr over yr reflecting share repurchases. ,

Full 12 months 2022 Steering 2022
(In hundreds of thousands, excluding knowledge per share) low Excessive
product sales $11,200 $11,500
comparable retailer gross sales 1.0% 3.0%
Adjusted Working Earnings Margin 10.0% 10.2%
earnings tax price 24.0% 26.0%
adjusted diluted eps (2, 3) $13.30 $13.85
capital expenditures $300 $350
free money move Minimal $775
share buyback $500 $700
New retailer and department opening 150
(2) As of February 14, 2022, the corporate’s adjusted diluted EPS steerage was between $13.20 and $13.75.
(3) Assumes weighted-average shares excellent as of Could 20, 2022, which incorporates 0.5 million shares repurchased after April 23, 2022 and excludes any future share repurchases made by the Firm.

investor convention name

The Firm detailed its outcomes for the primary quarter ended April 23, 2022, by way of a webcast scheduled for Tuesday, Could 24, 2022 at 8 a.m. Japanese Time. The webcast will likely be accessible by means of the Investor Relations web page of the Firm’s web site (ir.AdvanceAutoParts.). com).

A replay of the convention name will likely be accessible on the corporate’s investor relations web site for one yr.

About Advance Auto Elements

Advance Auto Elements, Inc. is a number one automotive aftermarket components supplier serving each skilled installers and do-it-yourself clients. As of April 23, 2022, Advance operated 4,687 shops and 311 WorldPack branches, primarily inside the USA, with further places in Canada, Puerto Rico and the US Virgin Islands. The corporate additionally served 1,318 independently owned CarQuest branded shops in these places along with Mexico and numerous Caribbean islands. Extra details about Advance, together with employment alternatives, buyer companies and on-line purchases of components, equipment and different provides, will be discovered at www.AdvanceAutoParts.com.



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