Advance Auto Parts Q2 Profit Drops, Cuts FY Outlook; To Sell Worldpac To Carlyle For $1.5 Bln

(RTTNews) - Advance Auto Parts Inc. (AAP) reported that its second-quarter net income dropped to $44.99 million or $0.75 per share from $78.58 million or $1.32 per share in the prior year.

In Thursday pre-market trade, AAP was trading at $54.19 down $7.73 or 12.48%.

The company's gross profit decreased 2.3% to $1.1 billion. Gross profit margin was 41.5% compared with 42.5% in the second quarter of the prior year. This was primarily due to the company's strategic pricing investments and higher product costs.

Net sales for the second quarter were $2.68 billion, compared to $2.69 billion in the previous year. Analysts expected revenue of $2.67 billion for the quarter. Comparable store sales increased 0.4%.

Looking ahead for fiscal year 2024, the company projects earnings per share to be in the range of $2.00 - $2.50 per share, net sales of $11.15 billion - $11.25 billion. It expects annual comparable store sales to range from -1.0% to 0.0%. Wall Street currently is looking for fiscal year 2024 earnings of $3.55 per share on annual revenues of $11.29 billion.

The company said in May that it expected earnings in a range of $3.75 to $4.25 per share on net sales between $11.30 billion and $11.50 billion, with comparable store sales increase in a range of 0 to 1 percent.

On August 7, 2024, the company declared a regular cash dividend of $0.25 per share to be paid on October 25, 2024, to all common stockholders of record as of October 11, 2024.

In a separate press release, Advance Auto Parts said Thursday that it agreed to sell Worldpac Inc., an automotive parts wholesale distribution business, to funds managed by global investment firm Carlyle (CG) for $1.5 billion in cash. The transaction is expected to close before the end of the year.

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