Latest news with #ShaneO'Kelly
Yahoo
31-07-2025
- Automotive
- Yahoo
Is Advance Auto Parts a Buy?
Key Points The auto parts retailer is restructuring its operations as it struggles with operational losses and declining sales. The stock soared after the company reported better-than-expected Q1 earnings. Advance Auto Parts is scheduled to report its second-quarter results on Aug. 14. 10 stocks we like better than Advance Auto Parts › Shares of Advance Auto Parts (NYSE: AAP) slid 4% last week on news that the auto parts retailer is issuing $1.5 billion in senior unsecured notes to refinance its debt. In layman's terms, it's buying new money to pay off older debt. Advance Auto Parts has been struggling mightily amid fierce competition from AutoZone and O'Reilly Auto Parts. With the stock down down 67% over the past three years -- and its turnaround efforts showing some positive signs -- is this a good opportunity to go bargain hunting? Q1 results topped expectations Advance Auto Parts stock catapulted 57% higher on May 22, when the company reported better-than-expected first-quarter 2025 results. While Advance Auto Parts' Q1 net sales fell 7% to $2.6 billion, they exceeded the company's own guidance by roughly $80 million. Investors also cheered the company's adjusted diluted earnings per share (EPS), which came in at a loss of $0.22, topping the consensus estimate by $0.47. CEO Shane O'Kelly gave investors more grist for the optimism mill when he said the company is on target to deliver positive operating margins by the second quarter. On July 24, Advance Auto Parts guided for Q2 adjusted operating income margin between 2.8% and 3%. The company will report its Q2 results on Aug. 14. The chart below should help illustrate why a return to positive operating margins would be such a big deal for the company, and could lift the stock higher: Operating margin measures the percentage of revenue a company retains as operating profit. Hampered by operational and supply chain inefficiencies, Advance Auto Parts' margins have lagged industry heavyweights AutoZone and O'Reilly Auto Parts over the past decade. As the chart above shows, AutoZone and O'Reilly have maintained relatively steady operating margins, while Advance Auto Parts' margins have been trending in the wrong direction since 2021. A key reason Advance Auto Parts has struggled in this area is its merchandising margin, or cost of goods sold. Simply put, the company isn't making as much profit per part as its competitors. To address this gap, Advance Auto Parts has been conducting line reviews with its parts suppliers to eliminate underperforming units, boost availability of high-demand items, and negotiate better pricing. In May, O'Kelly said the company expects to cut its product costs by more than 0.5% annually, starting in the second half of 2025. If Advance Auto Parts can swing to positive operating margins this year, it would be a clear sign that at least once facet of the company's turnaround plan is working. It's all about the parts Making sure the right parts are in stock when customers call (or click) is where the rubber meets the road for auto parts retailers. It's an area where Advance Auto Parts has struggled in relation to its larger rivals. Advance Auto Parts' turnaround plan focuses on improving parts availability and order-fulfillment speeds. A big component of the plan is creating a leaner and meaner distribution footprint. To that end, the company is consolidating its disparate network of 38 distribution centers, with the goal of having 12 large facilities -- averaging 500,000 square feet -- that are optimized for efficiency and unified under the same management software system. Advance Auto Parts has shuttered more than 500 corporate stores and exited more than 200 Carquest locations, based on its previously announced plans. At the same time, the company is building out its network of "market hubs," which are larger stores that serve as mini distribution centers. With three times the number of SKUs (stock-keeping units) as a regular store, market hubs expand same-day parts delivery to as many as 90 stores in their area. Advance Auto Parts aims to have 60 market hubs by the middle of 2027. On the Q1 earnings call, O'Kelly estimated that the company had seen a 1% uptick in comparable-store sales in areas where market hubs are already up and running. While those are early results, it bodes well for Advance Auto Parts' "multi-echelon supply network," as O'Kelly called it. In May, O'Kelly said the company has trimmed roughly 10 minutes off its average delivery time compared to last year. Is this a good time to buy Advance Auto Parts stock? Prior to last week's pullback, Advance Auto Parts stock had been rolling. From the closing bell on May 21 -- the day before its first-quarter results were published -- through July 21, the share price had doubled. If you're thinking about starting a position now, it's natural to wonder if you're late to the party. Based on its forward price-to-earnings (P/E) ratio of 30, which is based on earnings estimates, Advance Auto Parts stock is trading at a premium to its median P/E multiple over the past decade. However, its forward P/E multiple is roughly at the midpoint of rivals AutoZone and O'Reilly. When Advance Auto Parts reports its second-quarter results on Aug. 14, investors will want to see more signs of progress on the restructuring plan. If it can continue to shore up its bottom line -- and provide more details on its plan to capture market share from competitors -- I think this turnaround story could have some legs. Investors looking to buy should wait until after the report so they have more information on which to base a decision. Should you buy stock in Advance Auto Parts right now? Before you buy stock in Advance Auto Parts, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advance Auto Parts wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Josh Cable has positions in AutoZone. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is Advance Auto Parts a Buy? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
24-07-2025
- Automotive
- Business Wire
Advance Auto Parts Announces Preliminary Second Quarter 2025 Financial Highlights
RALEIGH, N.C.--(BUSINESS WIRE)--Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers ('Advance' or the 'Company'), announced preliminary second quarter 2025 financial highlights. 'Our team remains focused on implementing our strategic initiatives to improve business performance. We are pleased to share preliminary second-quarter financial results, which align with the upper range of our expectations, demonstrating progress in our turnaround efforts,' said Shane O'Kelly, president and chief executive officer. 'Today, we are announcing proactive debt financing transactions, aimed at preserving financial flexibility for the business as we continue to execute our initiatives.' 'We are working closely with our banking partners to establish a revised debt financing structure that we believe serves as a bridge toward re-attainment of an investment grade credit rating in the future,' said Ryan Grimsland, executive vice president and chief financial officer. 'As we navigate the dynamic macro-economic environment, the additional liquidity generated from our financing plans will support the new asset-backed revolving loan facility and commitments under the supply chain financing program utilized by our vendors. We believe that our revised debt structure will position us to maintain continued access to this program while providing us the optionality to optimize the program for the long-term.' Preliminary Second Quarter 2025 Financial Highlights Based on preliminary unaudited financials for the second quarter ended July 12, 2025, the Company expects to report the following: Net sales: $1.98 billion to $2.00 billion Year-over-year comparable store sales percent change: 0.0% to +0.1% Adjusted operating income margin (1): 2.8% to 3.0% The Company expects to report financial results for the second quarter ended July 12, 2025 before the market opens on Thursday, August 14, 2025. About Advance Auto Parts Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installers and do-it-yourself customers. As of April 19, 2025, Advance operated 4,285 stores primarily within the United States, with additional locations in Canada, Puerto Rico, and the U.S. Virgin Islands. The company also served 881 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at Forward-Looking Statements This press release provides a preliminary view of management's current plans and intentions relating to the Company' capital structure and debt financing arrangements. These plans and intentions are subject to change and the Company can provide no assurances that the Company will successfully negotiate and complete the entry into the asset-backed revolving loan facility or the other potential arrangements or transactions described or implied in this disclosure. In addition, the preliminary second quarter 2025 financial highlights presented in this press release are derived from the Company's internal records and based on the most current information available to management, are subject to the closing and finalization of financial and accounting procedures for the period (which have yet to be performed) and should not be viewed as a substitute for our full financial statements prepared in accordance with GAAP. Our normal reporting processes with respect to the preliminary estimated financial data provided below have not been fully completed. As a result, these preliminary estimated results may differ from the actual results that will be reflected in our unaudited condensed consolidated financial statements for the second quarter of 2025 when they are completed. While we believe that these estimates are based on reasonable assumptions, our actual results may vary, and such variations may be material. Certain statements herein are 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as 'anticipate,' 'believe,' 'could,' 'estimate,' 'expect,' 'forecast, 'guidance,' 'intend,' 'likely,' 'may,' 'plan,' 'position,' 'possible,' 'potential,' 'probable,' 'project,' 'should,' 'strategy,' 'target,' 'will,' or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about the Company's strategic initiatives, restructuring and asset optimization, financial objectives, including the refinancing of the Company's $1.0 billion revolving loan facility with the planned asset-backed revolving loan facility, the additional debt capital raise operational plans and objectives, statements about the Company's preliminary estimated results for the quarter ended July 12, 2025, statements about the status of, and capacity and utilization under, the Company's supply chain financing arrangements, statements about the Company's future credit ratings and outlook, statements regarding expectations for economic conditions, future business and financial performance, including with respect to tariffs, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect the Company's views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the Company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, the Company's ability to complete its debt financing plans on terms favorable to the Company or at all, risks relating to incurrence of indebtedness and increased leverage, the Company's ability to hire, train and retain qualified employees, the timing and implementation of strategic initiatives, risks associated with the Company's restructuring and asset optimization plans, risks relating to refinancing the Company's existing revolving loan facility with the planned asset-backed revolving loan facility, risks related to the Company's credit ratings or perceived creditworthiness, deterioration of general macroeconomic conditions, geopolitical factors including increased tariffs and trade restrictions, the highly competitive nature of the industry, demand for the Company's products and services, risks relating to the impairment of assets, including intangible assets such as goodwill, access to financing on favorable terms, complexities in the Company's inventory and supply chain and challenges with transforming and growing its business. Please refer to ' Item 1A. Risk Factors ' of the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ('SEC'), for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. 1 Adjusted operating income margin is a non-GAAP measure. For a better understanding of the Company's non-GAAP adjustments, refer to the reconciliation of non-GAAP financial measures in the company's periodic reports filed with the SEC. The Company is not able to provide a reconciliation of this forward-looking non-GAAP measure because it is unable to predict with reasonable accuracy the value of certain adjustments and as a result, the comparable GAAP measure is unavailable without unreasonable efforts.
Yahoo
09-06-2025
- Automotive
- Yahoo
Advance Auto Parts, Inc. (AAP): A Bull Case Theory
We came across a bullish thesis on Advance Auto Parts, Inc. (AAP) on Deep Value Capital's Substack. In this article, we will summarize the bulls' thesis on AAP. Advance Auto Parts, Inc. (AAP)'s share was trading at $51.68 as of 4th June. AAP's trailing and forward P/E were 174.7 and 36.50 respectively according to Yahoo Finance. An engineer at a workbench surrounded by automotive parts, tools, and microchips. Advance Auto Parts (AAP), one of North America's largest aftermarket auto parts retailers, is undergoing a dramatic turnaround under the leadership of new CEO Shane O'Kelly, who took the helm in September 2023. The company operates 4,285 stores and supplies 881 Carquest locations, primarily across the Eastern U.S., as well as in Canada, Puerto Rico, and other territories. AAP serves both professional installers and DIY customers, with an even revenue split between the two. However, the company has increasingly leaned into the higher-margin professional segment, which is expected to improve profitability over time. Despite a challenging past, O'Kelly's arrival has sparked renewed optimism. His early actions have de-risked the business, set a clear path for margin expansion, and positioned AAP to return to growth. The turnaround is not just about stabilization but about building long-term operational and financial momentum. With a broad product portfolio including parts, tools, fluids, and accessories, AAP remains deeply entrenched in the aftermarket ecosystem. The strategic shift under O'Kelly has already started to gain traction, and if execution continues on its current track, there is a compelling case for meaningful upside. The thesis suggests a 176% share price appreciation—or a 48.4% compound annual growth rate—by 2027. This potential return is anchored in both operational improvements and a valuation rerating as the market recognizes the turnaround's durability. With risk now better managed and growth initiatives underway, AAP presents an attractive opportunity for investors betting on a high-quality transformation story with substantial upside. We previously covered another (AAP) by Stock Analysis Compilation, which emphasized the company's discounted valuation and leadership overhaul as key drivers of a long-term turnaround. Which is reflected by a 23% appreciation in stock price since then. Deep Value Capital shares this optimism but focuses more on the company's shift toward higher-margin professional customers and quantifies the upside, projecting a 176% return by 2027 if execution stays on track. Advance Auto Parts, Inc. (AAP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held AAP at the end of the first quarter which was 43 in the previous quarter. While we acknowledge the risk and potential of AAP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Automotive
- Yahoo
Why Advance Auto Parts, Inc. (AAP) Soared Today
We recently published a list of In this article, we are going to take a look at where Advance Auto Parts, Inc. (NYSE:AAP) stands against other stocks that soared today. Advance Auto Parts soared by 57.04 percent on Thursday to close at $49.17 apiece as investors cheered the company's maintained full-year outlook despite the threats of higher tariffs. In its financial statement, Advance Auto Parts, Inc. (NYSE:AAP) maintained its guidance for net sales from continuing operations, between $8.4 billion and $8.6 billion, with same-store sales growth between 0.5 percent and 1.5 percent. A manufacturing facility floor filled with an array of automotive parts and accessories. 'The recently implemented tariffs have created a highly dynamic economic environment. Despite this, the team is staying focused on the turnaround and our path ahead. We are reaffirming our annual guidance based on performance to date, expected progress on our strategic initiatives for the balance of the year, and our planned mitigation actions for the tariffs currently in effect,' said Advance Auto Parts, Inc. (NYSE:AAP) President and CEO Shane O'Kelly. In the first quarter of the year, Advance Auto Parts, Inc. (NYSE:AAP) reported a 41-percent increase in net income from continuing operations, at $24 million versus the $17 million registered in the same period last year. Net sales, however, decreased by 6.8 percent to $2.583 billion from $2.772 billion year-on-year. Overall, AAP ranks 2nd on our list of stocks that soared today. While we acknowledge the potential of AAP, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AAP and has 10,000% upside potential, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
22-05-2025
- Automotive
- Yahoo
Why Advance Auto Parts Is in the Fast Lane Today
Advance lost less in the quarter than analysts had feared, an indication that the retailer's turnaround plan is on track. The CEO sounded an optimistic note about the ongoing turnaround plan, despite the impact that tariffs will have on the company. There's more room for the stock to recover, but its path ahead is likely to remain volatile. 10 stocks we like better than Advance Auto Parts › Advance Auto Parts (NYSE: AAP) reported first-quarter results Thursday morning that easily topped expectations, and said its transformation plan was ahead of schedule. Investors were pleased, and sent shares of Advance up by about 46% as of 10:45 a.m. ET. Shares of Advance Auto Parts had lost more than half their value over the past year, weighed down by poor results and macroeconomic concerns. The company has been implementing an aggressive restructuring plan, closing hundreds of stores while opening new ones at what it believes to be better locations. But investors had low expectations for the company heading into this earnings season. Advance lost $0.22 per share in the quarter on revenue of $2.58 billion. That loss was $0.47 per share better than Wall Street had expected, and revenue, though down 7% year over year, also came in about $70 million above expectations. The company also reiterated its guidance, saying that its restructuring plan remains on track despite complications due to President Donald Trump's trade wars. "The recently implemented tariffs have created a highly dynamic economic environment," said CEO Shane O'Kelly in a statement. "Despite this, the team is staying focused on the turnaround and our path ahead." Even after Thursday's surge, the stock is still down by about 35% over the past year. Advance is a work in progress, and the stock has the potential to go higher should the company continue to produce better-than-expected results. That said, the turnaround plan will take time to fully implement, and as O'Kelly notes, tariffs have added a lot of uncertainty to it. For investors interested in buying in, patience would likely be prudent. Thursday morning's 40%-plus gain was great to see for shareholders, but the stock will likely continue to take a volatile path from here. Before you buy stock in Advance Auto Parts, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advance Auto Parts wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $807,814!* Now, it's worth noting Stock Advisor's total average return is 962% — a market-crushing outperformance compared to 169% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why Advance Auto Parts Is in the Fast Lane Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
