Advance Auto Parts Reports Q4 Beat & Better Than Expected Guidance

Advance Auto Parts (NYSE:AAP) shares plunged more than 25% yesterday after the company posted very weak Q1 results and revised its 2023 guidance well-below consensus driven by management's expectation for a continued challenging competitive environment.

Q1 EPS came in at $0.72, compared to the Street estimate of $2.56. Revenue was $3.4 billion, compared to the Street estimate of $3.43 billion. The company provided its outlook for fiscal 2023, expecting EPS to be in the range of $6.00-$6.50, compared to the Street estimate of $10.64, and revenue in the range of $11.2-11.3 billion, compared to the Street estimate of $11.43 billion.

Advance Auto Parts (NYSE:AAP) reported its Q4 results, with EPS of $2.88 beating the Street estimate of $2.43. Revenue was $2.5 billion, above the Street estimate of $2.42 billion.

The company provided its full 2023 year outlook, expecting revenue in the range of $11.4-11.6 billion, compared to the Street estimate of $11.33 billion.

According to the analysts at RBC Capital, visibility into the company's forward margin trajectory remains limited, feeding into the current valuation gap vs. peers. With an unclear margin outlook and uncertainty around where new leadership may be focused, the analysts believe shares are likely to trade sideways near-term. The analysts maintained their Sector Perform rating and $158 price target on the company’s shares.

Advance Auto Parts, Inc. (NYSE:AAP) shares dropped nearly 10% on Wednesday following the company’s reported Q2 results, with EPS coming in at $3.74, worse than the Street estimate of $3.76. Revenue was up 0.6% year-over-year to $2.7 billion, below the Street estimate of $2.75 billion.

Analysts at Oppenheimer said they look upon Q2 results and updated 2022 guidance as largely mixed. According to the analysts, somewhat better than planned margins offset modestly weaker than expected sales.

For a long while, the company has represented the turnaround opportunity amongst leading auto parts retail chains. The analysts said they admire the efforts of CEO Tom Greco and his team to reposition the company successfully.