Advance Auto Parts has announced its financial results for the fourth quarter (12 weeks) and full year (52 weeks) ended Jan. 1, 2022. The company’s 2020 results in both the fourth quarter (13 weeks) and full year (53 weeks) include an additional week.
Fourth quarter 2021 net sales totaled $2.4 billion, a 1.3% increase compared with the fourth quarter of the prior year. Excluding sales from the additional week in the fourth quarter 2020, net sales increased 8.6%. Comparable store sales growth for the fourth quarter 2021 was 8.2%.
For full year 2021, net sales of $11 billion increased 8.8% from full year 2020. On a comparative 52-week basis, net sales increased 10.6%. Full year 2021 Comparable store sales growth was 10.7%.
“Advance had a strong fourth quarter and delivered a record year in 2021 across all key metrics,” said Tom Greco, president and CEO. “We remained focused throughout the year on the execution of the strategy we outlined last April to deliver top quartile total shareholder return. Thanks to the dedication of our team members and independent partners, our business is substantially stronger and better positioned today than it was prior to the pandemic.
“We closed the year with a record $11 billion in net sales and approximately 159 basis points in adjusted operating income margin expansion relative to the comparative 52 weeks in 2020. We also returned a record $1 billion in cash to shareholders through share repurchases and quarterly cash dividends,” Greco added. “In addition, we’ve now granted over 24,000 stock awards to frontline team members, valued at over $60 million upon grant since the inception of our Fuel the Frontline program. This investment creates an ownership culture that helps enable Advance to remain an employer of choice for the long-term.
“As we begin 2022, we remain focused on the disciplined execution of our strategic plan,” said Greco. “While we are still navigating uncertain times as it relates to macroeconomic factors, including significant inflation, the investments we’ve made in differentiating our business will continue to provide competitive advantage for Advance. We believe these investments, along with industry tailwinds, such as improvement in miles driven and an aging fleet will enable us to continue to drive profitable growth and total shareholder return.”
The company’s GAAP Gross profit margin decreased to 44.7% from 45.8% in the fourth quarter of the prior year. Adjusted gross profit increased 12.1% from the comparative 12 weeks in the fourth quarter of 2020 to $1.1 billion in the fourth quarter of 2021. Adjusted gross profit margin was 46.8% of net sales in the fourth quarter of 2021, a 145-basis point increase from the comparative 12 weeks in the fourth quarter of 2020, primarily driven by improvements in category management including strategic pricing, inventory related and owned brand expansion. This was partially offset by ongoing inflationary costs, unfavorable channel mix and the lapping of shrink benefits in the fourth quarter of the prior year. GAAP Gross profit margin increased 47 basis points to 44.8% for full year 2021, while adjusted gross profit margin for full year 2021 was 46%, a 175-basis point improvement from the comparative 52 weeks in the prior year.
Capital Allocation
During 2021, the company repurchased a total of 4.6 million shares of its common stock for an aggregate amount of $886.7 million, or an average price of $192.92 per share. At the end of the fourth quarter of 2021, the company had $545.5 million remaining under the share repurchase program. On Feb. 8, 2022, the company’s board of Directors authorized an additional $1 billion to the existing share repurchase program.
On Feb. 14, 2022, the company’s board of directors declared a 50% increase to the company’s quarterly cash dividend to $1.50 per share to be paid on April 1, 2022, to shareholders of record as of March 18, 2022.
Full Year 2022 Guidance
“Today we are introducing our full year 2022 guidance,” said Jeff Shepherd, executive vice president and CFO. “We believe that we are well-positioned to deliver growth building off our record 2021 results and the ongoing execution of our strategic initiatives. We’re encouraged by the first four weeks of 2022 with comp sales trending above the top-end of our full year guidance range as the growth drivers of our industry remain positive. However, our guide also takes into consideration macroeconomic uncertainty related to the acceleration of inflation across the economy and the impact it could have on our core customer.”
