Advance Auto Parts, Inc. MONKEY reported first-quarter earnings and earnings of $3.37 billion and $3.57 per share, respectively, marginally missing Street’s expectations on both metrics.
Wells Fargo on Advanced Auto Parts: analyst Zachary Fade maintained an Equal Weight rating for the company, while lowering the price target from $230 to $200.
While Advance Auto Parts broadly lived up to expectations, the market has become increasingly “punitive,” Fadem said in a note to customers. The company “continues to undercut competitors,” he added.
“Adj. EBIT margins slightly outperformed our -10bps (+3bps), but it took +300bps non-GAAP adjustments to do so, including 230bps of LIFO and perpetual restructuring charges that still exist since FY14,” he wrote. the Wells Fargo analyst continues.
RBC Capital Markets on Advanced Auto Parts: analyst Steven Shemesh maintained a Sector Perform rating and a price target of $247.
While comparable store sales grew 0.6% year-over-year, management proposed single-digit growth in the first 10 weeks of the quarter and a decline in the last six weeks, “driven by weakness in DIY stores.” – mainly due to headwinds from lagging YAG stimulus payments and a slower start to the spring sales season due to lower temperatures and more precipitation,” Shemesh said in a note.
“Importantly, the team noted that these headwinds have eased in the first 4 weeks of the second quarter, with comp sales in the +1-3% range,” he added.
“Adjusted gross margin increased +231 bps year-over-year to 47.1%, well above RBCe’s 45.6%/cons. 45.5% driven by improvement in category management, partially offset by inflationary costs and unfavorable channel/product mix,” RBC Capital Markets continued.
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Raymond James on Advanced Auto Parts: analyst Bobby Griffin reiterated a Strong Buy advice for the company.
“AAP delivered EPS for the first quarter of 22, which was in line with consensus view, driven largely by better-than-expected gross margin performance, offset by higher-than-expected SG&A %,” Griffin said in a note. The quarterly results “support our claim that the company’s turnaround efforts are gaining momentum and should continue to deliver better results going forward,” he added.
AAP Price Action: Shares of Advance Auto Parts were down 1.60% to $180.30 at the time of publication Tuesday Benzinga Pro†
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