Advance Auto Parts has announced its financial results for the fourth quarter ended Jan. 2, 2016. Fourth quarter comparable cash earnings per diluted share (Comparable Cash EPS) were $1.22. These results exclude 8 cents of amortization of acquired intangible assets and integration and restructuring costs of 40 cents, primarily associated with the acquisition of General Parts International Inc. (General Parts).
“Fourth quarter sales results did not meet our expectations, however, we demonstrated additional cost discipline to offset the softer than expected sales and met our earnings expectations,” said George Sherman, president and interim CEO. “We are a company composed of 5,300 hyper-local businesses that serve the needs of our valuable local customers. We recognize that the best way to substantially improve our customers’ experience is to empower our terrific team members who touch those customers every day. We are therefore adapting to a more empowered, field-centric organization that aggressively pursues improved profitability while achieving better than market top line growth. We are relentlessly pursuing opportunities to reduce expenses and increase efficiency while providing our customers with an exemplary experience that drives increased frequency. Through these actions, we fully expect to generate greater profitability and value for our shareholders.”
Fourth Quarter And Full Year 2015 Highlights
On a comparable basis, total sales for the fourth quarter decreased 2.6 percent to $2.03 billion, as compared with total sales during the fourth quarter of fiscal 2014 of $2.09 billion. The sales decline was driven by the comparable store sales decrease of 2.5 percent and the impact of previously announced store closures executed in the fourth quarter, partially offset by new store openings. Comparable store sales were negatively impacted by approximately 90 basis points related to the year-over-year timing of the New Year’s day holiday which fell in the 53rd week last year, 46 basis points due to foreign exchange currency fluctuations from the company’s Canadian business, as well as lower demand for seasonal categories due to warmer winter weather, partially offset by the favorable consolidation impact from CARQUEST stores. On a GAAP basis, total sales for the fourth quarter were $2.03 billion for fiscal 2015 compared to $2.24 billion for the fourth quarter of fiscal 2014. For fiscal 2015, the company’s comparable and GAAP total sales were $9.74 billion. On a comparable and GAAP basis, the company’s total sales for fiscal 2014 were $9.69 billion and $9.84 billion, respectively.
On both a comparable and GAAP basis, the company’s gross profit rate was 44.7 percent of sales during the fourth quarter as compared to 44.9 percent during the fourth quarter last year. The 15 basis-point decrease in gross profit rate was primarily the result of supply chain expense deleverage due to the comparable store sales decline, partially offset by lower shrink expenses. On a comparable and GAAP basis, the company’s gross profit rate was 45.4 percent for fiscal 2015 versus 45.2 percent over the same period last year.
The company’s comparable operating income was $157.6 million during the fourth quarter, a decrease of 8.2 percent versus the fourth quarter of fiscal 2014. As a percentage of sales, comparable operating income in the fourth quarter was 7.7 percent compared to 8.2 percent during the fourth quarter of fiscal 2014. On a GAAP basis, the company’s operating income during the fourth quarter of $100.7 million decreased 31.1 percent versus the fourth quarter of fiscal 2014. On a GAAP basis, the operating income rate was 5 percent during the fourth quarter as compared to 6.5 percent during the fourth quarter of fiscal 2014. For fiscal 2015, the company’s comparable operating income rate was 10.2 percent versus 9.9 percent during fiscal 2014. For fiscal 2015, the company’s GAAP operating income rate was 8.5 percent versus 8.7 percent during fiscal 2014.