Advance Auto reports lower earnings
THE TAKE: Advance Auto reported lower income in its first quarter. Sales at existing stores fell 3.2 percent during the quarter. Revenue rose because of its acquisition of BWP and the net addition of 163 new stores over the past 12 months.
The company said its quarterly earnings were affected by warm weather last year that caused consumers to defer vehicle maintenance and payroll tax increases on consumers.
Revenue: Total sales in the first quarter rose 3 percent to $2 billion, compared with $1.96 billion during the same quarter the previous year.
Net income: Total profit for the quarter fell 8.8 percent to $122 million, compared with $133.5 million the previous year.
Earnings: Earnings per diluted share were $1.65, compared with $1.79 a year ago.
THE COMPANY’S TAKE: “During the first quarter, as anticipated, our business continued to be constrained by the unseasonably warm weather last year which had deferred the maintenance on vehicles. Additionally, due to the impact of payroll tax increases on our core consumer, delayed income tax refunds and a very slow start to the spring selling season, our business was softer than anticipated with our comp store sales declining 3.2 percent,” Darren R. Jackson, Advance Auto CEO, said in a statement. “However, we had our best performance the last two weeks of our first quarter. During that period we saw our first week of positive transaction growth and strength across our major categories. We are encouraged by the fact that we have continued to generate positive comp store sales growth so far through our second quarter. This is a clear sign that our market remains strong and consumers still have a willingness to invest in reliable transportation.”