Advance Auto Parts (AAP) reported better-than-expected results for its second quarter, with a turnaround in comparable store sales bringing a higher view for the aftermarket parts retailer’s full-year outcome.
The Roanoke, Virginia-based company said net sales rose 2.8% in the second quarter to $2.33 billion, beating the consensus on Capital IQ for $2.26 billion. Adjusted earnings increased to $1.97 a share from $1.58 in the same period of 2017, and that also topped Wall Street’s view, which was for $1.86 a share.
Shares in the company were jumping in early Tuesday trading, adding to the year-to-date surge of about 45%, as Advance Auto Parts said comparable store sales rose 2.8%, better than the decrease in the first quarter of 0.8%.
“I am encouraged by the progress our team made during the first half of 2018 and confident in our ability to drive growth throughout the balance of 2018,” said Tom Greco, the company’s chief executive officer.
Advance Auto Parts is now predicting 2018 sales in a range of $9.3 billion to $9.5 billion, up from a projection given in February for $9.1 billion to $9.5 billion. The retailer is looking for comparable sales of flat to up 1.5%, better than the earlier view of a decrease of 2% to flat.
“Our increased revenue outlook is reflective of the improving industry trends, coupled with our top-line growth, better operational execution and our robust SKU assortment,” Greco said, referring to stock keeping units, which help businesses organize inventories.
Ahead of the earnings, Wedbush Securities said Advance Auto Parts’ five-year target to lift operating margins and comparable sales, as well as working capital improvements to fuel share repurchases, “point to a potential doubling of EPS by 2021.”
Advance Auto Parts said Tuesday it was aiming to return $100 million to $200 million to shareholders in the second half of the year through a $600 million repurchase program authorized by the board earlier this month.