Advertisement
New Zealand markets closed
  • NZX 50

    12,292.03
    +107.54 (+0.88%)
     
  • NZD/USD

    0.6094
    +0.0044 (+0.72%)
     
  • ALL ORDS

    8,303.50
    +60.20 (+0.73%)
     
  • OIL

    80.80
    +0.04 (+0.05%)
     
  • GOLD

    2,475.30
    +7.50 (+0.30%)
     

Advance Auto (AAP) to Report Q1 Earnings: What's in the Offing?

Advance Auto Parts AAP is slated to release first-quarter 2023 results on May 31, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $2.60 and $3.43 billion, respectively.

For the first quarter, the consensus estimate for AAP’s earnings per share has moved up by a cent in the past 30 days. Its bottom-line estimates imply a deterioration of 27.17% from the year-ago reported number.

The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year increase of 1.56%.

Over the trailing four quarters, AAP surpassed earnings estimates on two occasions, met the same once and missed on the other, the average negative surprise being 1.54%. This is depicted in the graph below.

Advance Auto Parts, Inc. Price and EPS Surprise

 

Advance Auto Parts, Inc. Price and EPS Surprise
Advance Auto Parts, Inc. Price and EPS Surprise

Advance Auto Parts, Inc. price-eps-surprise | Advance Auto Parts, Inc. Quote

Q4 Highlights

In fourth-quarter 2022, AAP’s adjusted earnings per share of $2.88 beat the consensus mark of $2.41. The bottom line also rose by 39.1% year over year. The company generated net revenues of $2,474 million, surpassing the Zacks Consensus Estimate of $2,422 million and increasing 3.2% from the year-ago reported figure. Comparable store sales increased by 2.1%.

Factors to Shape Q1 Results

Advance Auto Parts’ efforts to expand and optimize its footprint by opening new stores, widening its online presence and entering into strategic collaborations are expected to have resulted in higher sales and profits. But the intensive expansion efforts have forced Advance Auto Parts to bear the brunt of high selling, general and administrative (SG&A) costs, which are limiting the firm’s margins. High SG&A is likely to have strained margins in the to-be-reported quarter.

Moreover, rising investments to develop technology platforms and digital initiatives are set to dent the firm’s margins in the to-be-reported quarter. The company continues to deploy capital to pursue new growth opportunities through investments, partnerships and acquisitions. Further, tough price competition makes it difficult for AAP to achieve targeted margins in 2023, as outlined in its three-year strategic plan.

Advance Auto Parts’ expansion plan, high capital expenditure and tough price competition are likely to weigh on its first-quarter results.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Advance Auto Parts for the quarter to be reported, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: AAP has an Earnings ESP of -7.89%. This is because the Most Accurate Estimate is 20 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings Whispers for Other Auto Companies

NIO NIO will release fiscal first-quarter 2023 results on Jun 9. The company has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell).

The Zacks Consensus Estimate for NIO’s to-be-reported quarter’s loss and revenues is pegged at 22 cents per share and $1.69 billion, respectively.

Thor Industries THO will release fiscal third-quarter 2023 results on Jun 6. The company has an Earnings ESP of +1.38% and a Zacks Rank #4 (Sell).

The Zacks Consensus Estimate for THO’s to-be-reported quarter’s earnings and revenues is pegged at $1.13 per share and $2.94 billion, respectively.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

ADVERTISEMENT

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Thor Industries, Inc. (THO) : Free Stock Analysis Report

Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report

NIO Inc. (NIO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research