RICHMOND, Va. (AP) — Advance Auto Parts Inc. said Thursday that its first-quarter profit fell nearly 9 percent as it experienced softer sales and higher costs.
The Roanoke, Va., seller of auto parts and batteries posted earnings of $121.8 million, or $1.65 per share, for the quarter ended April 20, down from $133.5 million, or $1.79 per share, a year ago.
The results beat Wall Street expectations by three cents per share but the company tempered its full-year outlook. Its shares fell $2.10, or 2.5 percent, to $83.70 in midday trading.
Advance Auto Parts, which operates about 3,970 stores in the U.S., Puerto Rico and the Virgin Islands, said revenue increased 3 percent to $2.01 billion, matching analyst estimates, according to FactSet.
The company said its sales benefited from its January acquisition of privately held Northeast car parts supplier B.W.P. Distributors Inc.
Revenue at stores open at least a year decreased 3 percent. That’s an important measure for retailers because it excludes the volatility from newly opened or closed stores. During the quarter, the company acquired 124 stores, opened 56, and closed seven.
In a conference call with investors, CEO Darren R. Jackson said demand continued to be weak during the quarter as unseasonably warm weather, especially in cold-weather markets, deferred vehicle maintenance. Payroll tax increases, delays in tax refunds and a slow start to the spring selling season also hurt its results, Jackson said.
When vehicle sales tumbled a few years ago, auto parts retailers such as Advance Auto Parts got a sales boost, as more Americans kept their vehicles longer and invested more in keeping them running.
But Americans have been buying new cars and trucks at a healthy pace in recent months, fueled by low interest rates, better credit availability and aging cars that need replacement.
Advance Auto Parts has been focused on streamlining and simplifying its organization to reduce costs and minimize the impact to sales and service levels.
Selling, general and administrative expenses grew more than 6 percent and made up a larger part of its sales for the quarter. The company also said it experienced higher supply chain costs.
The company also said Thursday that it expects to be on the lower end of its full-year adjusted earnings forecast of $5.30 and $5.45. Analysts expected $5.23 per share.
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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.
