Advance Auto Parts, Inc. (NYSE: AAP), a leading retailer of automotive aftermarket parts, accessories, batteries, and maintenance items, today announced its third quarter earnings per diluted share (EPS) are anticipated to be $1.21, a decrease of 14.2% versus the third quarter last year of $1.41.
The decline in EPS was driven by a decrease in total sales for the third quarter of approximately 0.5% to $1.46 billion, as compared with total sales during the third quarter of fiscal 2011. The sales decrease reflected a comparable store sales decrease of approximately 1.8%, partially offset by the net addition of 82 new stores during the past 12 months. Additionally, the decrease in the Company’s EPS was driven by increased promotions, higher spending on in-store labor and advertising in an effort to drive consumer traffic and maintain market share in the softer consumer environment, and expense deleverage as a result of the lower sales volume.
The Company anticipates that its operating performance will continue to be constrained for the balance of the year driven by continued softness in its colder weather markets, lower overall consumer spending on maintenance and failure parts and continued investments in the Company’s strategic initiatives primarily focused on growing its Commercial sales. The Company does not anticipate any changes to its previously shared annual outlook for SG&A per store to decrease 1% to 2% and its previously shared annual outlook for the Company’s gross profit rate to improve modestly for the year. As a result, the Company now anticipates its full year EPS outlook for fiscal 2012 will be in the range of $5.05 to $5.15.
“Our efforts to invest in the continued long-term growth of Commercial and increase customer traffic helped drive improvements in our comp store sales from the second quarter to the third quarter of this year and strengthened our positive Commercial comps for Advance stores through the quarter. Despite these improved sales trends, we were still unable to achieve our profitability expectations and fully mitigate the weak consumer demand within several of our markets, especially in our colder weather markets,” said Darren R. Jackson, President and Chief Executive Officer. “As we look beyond our current quarter, we believe the industry fundamentals remain positive and that we are well positioned with our initiatives to fuel our future growth. These initiatives include the successful launch of our Advance Commercial Credit program, our new distribution center in Remington, IN, our recent expansion into New York City and our continued momentum from our B2B online ordering capability, hub investments and inventory upgrades.”