Advance Auto Parts has announced its financial results for the fourth-quarter and full year ended Dec. 30, 2017.
“Through the strong dedication of our entire team, we continued to close the performance gap versus the industry and our laser focus on working capital enabled a 56 percent increase in free cash flow in a difficult sales environment,” said Tom Greco, president and CEO. “As we enter the second year of our transformation plan, we still have a lot that we want to accomplish. We remain steadfast in our commitment to strengthen our customer value proposition, deliver market share improvement and execute our productivity agenda to drive margin expansion.”
Total net sales for the fourth quarter came in at $2.04 billion, a 2.2 percent decrease versus the prior-year period. Comparable store sales for the quarter decreased 2.6 percent. Net sales for full year 2017 were $9.37 billion, versus $9.57 billion in 2016. Comparable store sales for the full year decreased 2 percent.
The company’s Adjusted Operating Income was $113.7 million, 5.6 percent of net sales for the quarter. On a GAAP basis, the company’s Operating Income was $87.2 million, 4.3 percent of net sales, a decline of 82 basis points. For full year 2017, the company’s Adjusted Operating Income was 7.3 percent versus 9.4 percent during full year 2016. The company’s GAAP Operating Income rate was 6.1 percent compared to 8.2 percent for full year 2016.
The impact of recently signed tax reform resulted in a lower federal tax rate for the company in the fourth quarter. The company reported Adjusted EPS of 77 cents for the quarter. On a GAAP basis, the company’s diluted EPS was $2.49, which includes a benefit of $1.94 related to the tax reform.
Operating cash flow increased 14.8 percent to $600.8 million for full year 2017 from $523.3 million for full year 2016. Free cash flow was $411 million for full year 2017 compared to $263.7 million in the prior-year period, an increase of 55.9 percent. This increase was primarily driven by optimization of working capital and disciplined capital spending.
