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What to Expect From Advance Auto Parts' (AAP) Q1 Earnings
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Advance Auto Parts, Inc. (AAP - Free Report) is scheduled to report first-quarter 2021 results on Jun 2, before the bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $3.08 per share and $3.31 billion, respectively. The automotive aftermarket parts provider registered weaker-than-anticipated earnings in the last reported quarter on lower-than-expected comparable store sales.
Over the trailing four quarters, Advance Auto Parts beat the Zacks Consensus Estimate on two occasions for as many misses, with the average surprise being 2.1%. This is depicted in the graph below:
The Zacks Consensus Estimate for Advance Auto Parts’ first-quarter earnings per share witnessed a downward revision of a penny in the past 60 days. Nonetheless, the bottom-line estimate signals 238.4% growth year over year. Moreover, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 22.8%.
Factors at Play
Last month, Advance Auto Parts announced that it has witnessed strong sales growth since the start of 2021, thanks to solid demand from DIY (Do-It-Yourself) omnichannel and professional customers. Gradual recovery of the economy buoyed by widespread vaccination drive and fiscal stimulus increased vehicle sales in the United States during first-quarter 2021. Consequently, revenues of this aftermarket parts provider are likely to have increased in the to-be-reported quarter.
Advance Auto Parts is anticipated to have gained from the expansion of footprint through new stores and widening online presence during first-quarter 2021. Enhancements to the firm’s online portal ‘MyAdvance’ is likely to have increased traffic and resulted in higher conversion rates. It expects first-quarter comps growth within 22-24%, indicating a significant increase from the previous quarter’s 4.7%. The metric also suggests an improvement from the year-ago period, when comparable store declined 9.3%. On a further encouraging note, adjusted operating income margin is expected between 8.5% and 8.7%, implying growth from the year-ago level of 3.9% as well as the prior quarter’s 7.3%.
Having said that, the company’s massive costs for store openings, partnerships and investments to strengthen the supply chain are likely to have flared up expenses and dented margins to a certain extent in the to-be-reported quarter.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Advance Auto Parts this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Earnings ESP: Advance Auto Parts has an Earnings ESP of -0.13%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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What to Expect From Advance Auto Parts' (AAP) Q1 Earnings
Advance Auto Parts, Inc. (AAP - Free Report) is scheduled to report first-quarter 2021 results on Jun 2, before the bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $3.08 per share and $3.31 billion, respectively. The automotive aftermarket parts provider registered weaker-than-anticipated earnings in the last reported quarter on lower-than-expected comparable store sales.
Over the trailing four quarters, Advance Auto Parts beat the Zacks Consensus Estimate on two occasions for as many misses, with the average surprise being 2.1%. This is depicted in the graph below:
Advance Auto Parts, Inc. Price and EPS Surprise
Advance Auto Parts, Inc. price-eps-surprise | Advance Auto Parts, Inc. Quote
Trend in Estimate Revisions
The Zacks Consensus Estimate for Advance Auto Parts’ first-quarter earnings per share witnessed a downward revision of a penny in the past 60 days. Nonetheless, the bottom-line estimate signals 238.4% growth year over year. Moreover, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 22.8%.
Factors at Play
Last month, Advance Auto Parts announced that it has witnessed strong sales growth since the start of 2021, thanks to solid demand from DIY (Do-It-Yourself) omnichannel and professional customers. Gradual recovery of the economy buoyed by widespread vaccination drive and fiscal stimulus increased vehicle sales in the United States during first-quarter 2021. Consequently, revenues of this aftermarket parts provider are likely to have increased in the to-be-reported quarter.
Advance Auto Parts is anticipated to have gained from the expansion of footprint through new stores and widening online presence during first-quarter 2021. Enhancements to the firm’s online portal ‘MyAdvance’ is likely to have increased traffic and resulted in higher conversion rates. It expects first-quarter comps growth within 22-24%, indicating a significant increase from the previous quarter’s 4.7%. The metric also suggests an improvement from the year-ago period, when comparable store declined 9.3%. On a further encouraging note, adjusted operating income margin is expected between 8.5% and 8.7%, implying growth from the year-ago level of 3.9% as well as the prior quarter’s 7.3%.
Having said that, the company’s massive costs for store openings, partnerships and investments to strengthen the supply chain are likely to have flared up expenses and dented margins to a certain extent in the to-be-reported quarter.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Advance Auto Parts this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Earnings ESP: Advance Auto Parts has an Earnings ESP of -0.13%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Advance Auto Parts — which shares space with O’Reilly Automotive (ORLY - Free Report) , AutoZone (AZO - Free Report) and CarMax (KMX - Free Report) — currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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