Advance Auto Parts is trading lower after-hours

Advance Auto Parts Inc (NYSE: AAP) said its profit and revenue topped Wall Street expectations in the fiscal third quarter. Shares of the company still tanked about 2.0% in after-hours trading on Monday.

Q3 financial performance

Advance Auto Parts reported $169.8 million in net income that translates to $2.70 per share. In the same quarter last year, its net income was capped at $147.4 million or $2.14 per share. On an adjusted basis, the automotive aftermarket parts provider earned $3.21 per share.

The U.S. firm generated $2.60 billion in net sales that represents an annualised growth of 3.1%. In comparison, analysts had called for $2.78 of adjusted EPS on $2.56 billion in sales.

Future outlook and dividend

For the full financial year, the North Carolina-based company now forecasts $10.9 billion to $10.95 billion in revenue, on an up to 10% increase in comparable sales. Last week, Advance Auto Parts declared a quarterly cash dividend of $1.0 per share.

Other notable figures in the earnings report include adjusted gross margin that jumped 246 basis points in the recent quarter to 46.2%.

CEO Tom Greco’s remarks

Commenting on the earnings report, CEO Tom Greco said:

We’re encouraged by the positive sales trends during the first four weeks of our fourth quarter with our two-year stack remaining in line with Q3. We look forward to finishing 2021 with momentum and remain confident in our ability to drive total shareholder return in the coming years.

Free cash flow was up 19% from last year and 36% on a year-over-two-year basis. Advance Auto Parts returned $291.2 million to shareholders in Q3 via dividends and share repurchase.