Advance Auto Parts Reports 3% Increase In 3rd-Quarter Sales

Advance Auto Parts Reports 3% Increase In 3rd-Quarter Sales

However, the company plans to open fewer new stores in 2021 than previously anticipated.

Advance Auto Parts reported third-quarter net sales of $2.6 billion, a 3.1% year-over-year increase.

Comparable-store sales for the quarter, which ended on Oct. 9, increased by 3.1% as well.

“In Q3, we delivered another quarter of improved top-line growth and margin expansion and returned significant cash to our shareholders in line with the strategy we outlined in April,” Advance CEO Tom Greco said in a news release. “Following several years of investments in both our team as well as our diversified physical and digital asset base, we continue to differentiate Advance in the marketplace. Our team members and independent partners once again adapted to a dynamic landscape and executed our plan with excellence.”

Advance and other parts retailers are facing tough year-over-year comparisons, after several massive stimulus packages drove parts sales to record levels in 2020. In its DIY business, Advance ended the third quarter “slightly positive after lapping our toughest quarterly comparison of high double-digit growth from the prior year,” according to Greco.

Meanwhile, DIFM sales – which took a hit during the height of the pandemic – continued their recovery.

“Our professional business once again led our sales improvement as well as the ongoing recovery in key urban markets where miles driven was most impacted in 2020,” Greco said.

The company issued updated guidance for its full-year financial expectations. Advance had been projecting full-year net sales between $10.6 billion and $10.8 billion. As of Nov. 15, the company is projecting full-year net sales between $10.9 billion and $10.95 billion.

Advance now is expecting comparable-store sales to increase between 9.5% and 10% for 2021. The company had been projecting a more modest year-over-year increase between 6% and 8%.

“We are pleased with the first three quarters of the year and the continued momentum as we began the fourth quarter,” said Jeff Shepherd, executive vice president and chief financial officer. “As a result, we are increasing our full-year 2021 sales and profit guidance to reflect the positive results year-to-date and our expectations for the balance of the year. This guidance incorporates both continued top-line strength as well as higher than planned inflation headwinds.”

Not all of its full-year guidance was higher. Advance had been expecting to open as many as 120 new stores in 2021. As of Nov. 15, Advance is projecting a minimum of 30 new-store openings this year. “The construction environment in California remains challenging, primarily related to the ongoing pandemic,” Shepherd said. “We remain committed to the successful conversion of our 109 California locations and are confident once completed will be highly accretive to our growth trajectory.”

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