Advance Auto Parts has announced its financial results for the fourth quarter and full year ended Dec. 31, 2022.
“In 2022, our team members once again worked to serve our customers with relentless focus and dedication. Despite challenges throughout 2022, we made progress on our strategic initiatives, including the expansion of our footprint, further strengthening of our DieHard brand and improved customer loyalty,” said Tom Greco, president and CEO. “However, we are not satisfied with our results in 2022 and are taking decisive actions to improve performance in 2023. Importantly, the disciplined inventory and pricing actions we discussed last quarter to adapt to an evolving competitive landscape contributed to stronger results in Q4 and we ended the year with positive momentum.
“We expect to see further improvements in inventory availability throughout 2023, which we view as the single-most important driver to accelerate topline growth. After several years of significant investments in complex transformation initiatives and the majority of the integration behind us, we’re now able to focus more time and resources on leveraging our differentiated asset base and improving execution to drive long-term shareholder value.”
Fourth Quarter and Full Year 2022 Results
Fourth quarter 2022 Net sales totaled $2.5 billion, a 3.2% increase compared with the prior year, primarily driven by strategic pricing and new store openings. Comparable store sales for the fourth quarter 2022 increased 2.1%. For full year 2022, Net sales of $11.2 billion increased 1.4% from 2021. Comparable store sales for the full year increased 0.3%.
The company’s GAAP Gross profit increased 1.7% from the fourth quarter of the prior year to $1.1 billion or 44.1% of Net sales compared with 44.7% the prior year quarter. Adjusted gross profit increased 3.4% from the fourth quarter of the prior year to $1.2 billion. Adjusted gross profit margin as 46.9% of Net sales was relatively flat compared with the fourth quarter of the prior year, primarily driven by improvements in strategic pricing, channel mix favorability and owned brand expansion. This was partially offset by product cost inflation. The company’s full year GAAP Gross profit was $5 billion, or 44.5% of Net sales, which decreased 33 basis points compared with the prior year. Adjusted gross profit was $5.3 billion, or 47.3% of Net sales, which increased 135 basis points from the prior year.
Net cash provided by operating activities was $0.7 billion for the full year 2022 versus $1.1 billion for the prior year. The decrease was primarily driven by lower Net income and working capital. Free cash flow for the full year 2022 was $298.2 million, compared with $822.6 million for the prior year.
Capital Allocation
During 2022, the company repurchased a total of 3 million shares of its common stock for an aggregate amount of $598.2 million, or an average price of $201.88 per share. At the end of the fourth quarter of 2022, the company had $947.3 million remaining under the share repurchase program.
On Feb. 21, 2023, the company declared a regular cash dividend of $1.50 per share to be paid on April 28, 2023, to all common stockholders of record as of April 14, 2023.
