Advance Auto Parts has announced its financial results for the third-quarter ended Oct. 6, 2018.
“I am extremely pleased to report another quarter of improved top and bottom line growth in the third quarter. Through the dedication of our team members and our unrelenting focus on enhancing our customer value proposition, we delivered our strongest comparable sales growth in nearly eight years. In addition, through the disciplined execution of our financial priorities we increased our free cash flow by 140 percent and returned $120 million to our shareholders through share repurchases,” said Tom Greco, president and CEO.
Third Quarter 2018 Highlights
Net sales for the third quarter of 2018 were $2.3 billion, a 4.3 percent increase versus the third quarter of the prior year. Comparable store sales for the third quarter of 2018 increased 4.6 percent.
The company’s Adjusted operating income was $193.7 million in the third quarter of 2018, an increase of 12.5 percent versus the third quarter of the prior year. Adjusted operating income margin improved to 8.5 percent of Net sales for the third quarter, an increase of 62 basis points compared to the third quarter of the prior year. On a GAAP basis, the company’s operating income was $154.2 million, 6.8 percent of net sales, a decline of 39 basis points from the third quarter of 2017.
The company’s effective tax rate in the third quarter of 2018 was 21.2 percent, compared to 33.3% in the third quarter of the prior year. The company’s Adjusted EPS was $1.89 for the third quarter of 2018, an increase of 32.2 percent compared to the third quarter of the prior year. On a GAAP basis, the company’s Diluted EPS increased 20 percent to $1.56.
2018 Full Year Guidance
Greco commented, “Following continued operational improvement in the third quarter, coupled with the improving demand environment, we are pleased to update our outlook for the balance of the year. Our increased revenue outlook is reflective of our confidence to capitalize on the improving industry trends using our robust SKU assortment to further enhance our customer value proposition to say ‘yes’ more often and win with our customers. We remain focused on cost control and dedicated to delivering additional margin expansion and free cash flow during the remainder of the year.”
Share Repurchase Authorization
On Aug. 8, the company’s board of directors authorized a $600 million share repurchase program. Under this new authorization, the company repurchased 720,000 shares of its common stock for $119.9 million during the third quarter. At the end of the third quarter, the company had $480.1 million remaining under the share repurchase program.
