vance Auto Parts has announced its financial results for the first quarter ended April 21, 2018.
“We are pleased to report another quarter of operational improvement as we begin the second year of our five-year plan. Through the commitment of our entire team and a relentless focus on execution, we were able to deliver operating margin expansion and double-digit EPS growth in the first quarter. In addition, we have taken a disciplined approach to significantly improve both working capital and cash generation. Our first quarter performance reinforces our commitment to making consistent progress on the transformation of Advance, strengthening our customer value proposition and driving increased value for our shareholders,” said Tom Greco, president and CEO.
First Quarter 2018 Highlights
Total net sales for the first quarter were $2.9 billion, a 0.6 percent decrease versus the prior-year period. Comparable store sales for the first quarter decreased 0.8 percent.
The company’s gross profit margin increased 32 basis points in the first quarter to 44.3 percent from 44 percent in the first quarter of the prior year. The increase was primarily driven by a reduction in material costs and related items.
The company’s Adjusted Operating Income was $224.1 million, 7.8 percent of net sales for the quarter. This represented an increase of 71 basis points versus the prior-year period, driven by the increase in gross profit, as well as a decrease in SG&A from the expense management initiatives described above. On a GAAP basis, the company’s operating income was $198.2 million, 6.9 percent of net sales, an increase of 68 basis points.
As a result of the recently signed Tax Cut and Jobs Act, which lowered the federal tax rate, the company’s effective tax rate in the first quarter was 24.5 percent, compared to 35 percent in the previous prior-year first quarter. The company’s Adjusted EPS was $2.10 for the quarter, an increase of 31.3 percent compared the first quarter of the prior year. On a GAAP basis, the company’s diluted EPS increased 26 percent to $1.84.
Operating cash flow was $154 million in the first quarter 2018 versus $35.1 million in the same period 2017. Free cash flow in the quarter was $119.5 million compared to negative $30.2 million. These increases were primarily driven by improved net income and the optimization of working capital.
On May 15, 2018, the company’s board of directors declared a regular quarterly cash dividend of 6 cents per share to be paid on July 6, to all common stockholders of record as of June 22.