Dj O'Reilly Automotive Inc. Stock Underperforms Thursday When Compared To Competitors

Advance Auto Parts, Inc. AAP reported an adjusted loss of 4 cents per share for the third quarter of 2024 as against the Zacks Consensus Estimate of earnings of 52 cents. The company had incurred an adjusted loss of 82 cents in the year-ago quarter.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

Advance Auto generated net revenues of $2.1 billion, which missed the Zacks Consensus Estimate of $2.67 billion. Comparable store sales decreased 2.3% year over year. We projected a decline of 1.2% for the same. The top line decreased from $2.2 billion generated in the year-ago quarter.

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

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

Gross profit increased 11% to $907.9 million (42.3% of net sales). AAP reported operating income of $403,000. SG&A expenses totaled $907.8 million for third-quarter 2024, up 11% year over year.

The company had cash and cash equivalents of $464.5 million as of Oct. 5, 2024, compared with $488 million as of Dec. 30, 2023. Total long-term debt was $1.78 billion as of Oct. 5, 2024.

In the first three quarters of 2024, net cash provided by operating activities and negative free cash flow totaled $81 million and $48.7 million, respectively.

As of Oct. 5, 2024, the company operated 4,781 stores and 321 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also served 1,125 independently owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean islands.

On Nov. 1, the company closed the sale of Worldpac to Carlyle Group CG for approximately $1.5 billion. On Oct. 29, AAP declared a dividend of 25 cents a share to be paid on Jan. 24, 2025, to shareholders as of Jan. 10, 2025.

AAP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Guidance

Advance Auto revised its full-year 2024 guidance. It now expects 2024 net sales of around $9 billion, down from the prior guided range of $11.15-$11.25 billion. Comparable store sales are projected to be negative 1%. The operating income margin is envisioned in the range of 0.25-0.75%, down from the previous estimate of 2.1-2.5%. AAP expects 2024 capex in the range of $175-$225 million. The bottom line is expected to be breakeven to a loss of 60 cents a share, down from the previous estimate of earnings per share in the range of $2-$2.50.

The company also released preliminary guidance for 2025. Net sales for 2025 are expected between $8.4 billion and $8.6 billion. It aims to open 30 new stores next year. Comparable store sales are envisioned to grow 0.5-1.5% for the full year. Adjusted operating income margin is forecast in the range of 2-3%.

It has also laid out targets for 2027. Net sales and adjusted operating income margin are expected to be $9 billion and 7%, respectively. AAP targets to open 50-70 stores in 2027, with comps envisioned to grow at a positive low-single-digit percentage.

Peer Release

O’Reilly Automotive ORLY reported third-quarter 2024 adjusted EPS of $11.41, which missed the Zacks Consensus Estimate of $11.53. However, the bottom line increased from $10.72 reported in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.36 billion, missing the Zacks Consensus Estimate of $4.43 billion. The top line, however, increased 3.8% year over year. During the quarter, comparable store sales grew 1.5%. ORLY opened 47 new stores in the United States, Mexico and Canada during the quarter. The total store count was 6,291 as of Sept. 30, 2024.

O’Reilly had cash and cash equivalents of $115.6 million at the end of the reported quarter, down from $279.1 million recorded as of 2023-end. Its long-term debt was $5.36 billion, lower than $5.57 billion as of Dec. 31, 2023.

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