Shares of auto parts retailer Advance Auto Parts (AAP) - Get Advance Auto Parts, Inc. Report jumped premarket Tuesday after the company reported strong second quarter results that topped analyst estimates for the quarter.
The company reported a 7.5% increase in comparable store sales, leading to $2.5 billion in net sales. Adjusted earnings rose 46% to $2.92 per share. The 7.5% increase in comps was the company's highest quarterly growth rate in nearly 10 years.
Analysts were expecting the company to report comps of 2.7%, revenue of $2.38 billion and earnings of $1.98 per share.
Advance Auto Parts shares rose 5.8% to $170.30 premarket Tuesday. The stock has strengthened since its March low and now new highs are coming into focus.
"Without question, we benefited from a surge in industry demand in the quarter fueled by the government stimulus, unemployment benefits and the impact COVID-19 had on consumer behavior in terms of how they repaired and maintained their vehicles," said CEO Tom Greco.
Advance Auto Parts temporarily discontinued its share repurchase program in the first quarter, but based on the company's stronger financial position in the second quarter it lifted its temporary suspension as of Aug. 12.
The company also withdrew its full year guidance on April 9 due to uncertainty amid the coronavirus pandemic, and the company said that it will still not provide guidance.
The strong quarter was expected after the company reported an optimistic second quarter outlook following disappointing first quarter results reported in May.
Real Money checked the charts and indicators of Advance Auto Parts to see if prices can break out over the highs of last October and November.