OREANDA-NEWS. Advance Auto Parts, Inc. (NYSE: AAP), the largest automotive aftermarket parts provider in North America, serving both professional installer and do-it-yourself customers, today announced its financial results for the second quarter ended July 18, 2015. Second quarter comparable cash earnings per diluted share (Comparable Cash EPS) were $2.27, which included a $0.03 unfavorable impact from foreign currency and was an increase of 9.1% versus the second quarter last year. These second quarter comparable results exclude $0.08 of amortization of acquired intangible assets and integration costs of $0.16 primarily associated with the acquisition of General Parts International, Inc. (General Parts).
 
Comparable Second Quarter Performance Summary (1)
                   
      Twelve Weeks Ended   Twenty-Eight Weeks Ended
      July 18,
2015		   July 12,
2014		   July 18,
2015		   July 12,
2014
                   
Sales (in millions)     $ 2,370.0     $ 2,347.7     $ 5,408.3     $ 5,317.2  
                   
Comp Store Sales %     1.0 %   2.6 %   0.8 %   2.5 %
                   
Gross Profit (in millions)     $ 1,087.3     $ 1,062.1     $ 2,481.2     $ 2,415.2  
                   
Comparable SG&A (in millions)     $ 801.8     $ 799.4     $ 1,887.5     $ 1,868.2  
                   
Comparable Operating Income (in millions)     $ 285.5     $ 262.7     $ 593.8     $ 547.1  
                   
Comparable Cash EPS     $ 2.27     $ 2.08     $ 4.65     $ 4.33  
                   
Avg Diluted Shares (in thousands)     73,682     73,399     73,665     73,374  
                           
     

(1)

  

Fiscal 2015 and 2014 include certain non-comparable expenses. The Comparable SG&A, Comparable Operating Income and Comparable Cash EPS for the twelve weeks ended July 18, 2015 and July 12, 2014, respectively, have been reported on a comparable basis to exclude General Parts integration and store consolidation costs of $18.6 million and $12.2 million, respectively, and General Parts amortization of acquired intangible assets of $9.8 million and $9.9 million, respectively. The Comparable SG&A, Comparable Operating Income and Comparable Cash EPS for the twenty-eight weeks ended July 18, 2015 and July 12, 2014, respectively, have been reported on a comparable basis to exclude General Parts integration and store consolidation costs of $51.3 million and $27.7 million, respectively, and General Parts amortization of acquired intangible assets of $22.9 million and $22.9 million, respectively. For a better understanding of the Company's comparable results, refer to the presentation of the respective financial measures on a GAAP basis and reconciliation of the financial results reported on a comparable basis to the GAAP basis in the accompanying financial tables in this press release.
     

“I would like to thank all our Team Members for their hard work during the second quarter of 2015,” said Darren R. Jackson, Chief Executive Officer. “Our second quarter comparable store sales increased 1.0% and Comparable Cash EPS grew 9.1% to $2.27. These results were in-line with our expectations given the continuing demands of the General Parts integration. Our integration continues to be on-track overall along with our sales and profitability.”

Second Quarter 2015 Highlights

Total sales for the second quarter increased 1.0% to $2.37 billion, as compared with total sales during the second quarter of fiscal 2014 of $2.35 billion. The sales increase was driven by the addition of new stores over the past 12 months and a comparable store sales increase of 1.0% partially offset by changes in our independent store count. Our comparable store sales were negatively impacted by 34 basis points due to foreign currency fluctuations from our Canadian operations.

The Company's Gross Profit rate was 45.9% of sales during the second quarter as compared to 45.2% during the second quarter last year. The 64 basis-point increase in gross profit rate was primarily the result of lower product acquisition costs, inclusive of the Company's ongoing merchandise cost synergy savings.

The Company's Comparable SG&A rate was 33.8% of sales during the second quarter as compared to 34.0% during the same period last year. The 22 basis-point decrease was primarily the result of lower insurance costs and overall lower administrative costs driven by synergy savings partially offset by expense de-leverage as a result of our low comparable store sales growth. On a GAAP basis, the Company's SG&A rate was 35.0% of sales during the second quarter as compared to 35.0% during the same period last year.

The Company's Comparable Operating Income was $285.5 million during the second quarter, an increase of 8.7% versus the second quarter of fiscal 2014. As a percentage of sales, Comparable Operating Income in the second quarter was 12.0% compared to 11.2% during the second quarter of fiscal 2014. On a GAAP basis, the Company's operating income during the second quarter of $257.0 million increased 6.8% versus the second quarter of fiscal 2014. On a GAAP basis, the Operating Income rate was 10.8% during the second quarter as compared to 10.3% during the second quarter of fiscal 2014.

Operating cash flow increased approximately 3.2% to $330.8 million through the second quarter of fiscal 2015 from $320.6 million through the second quarter of fiscal 2014. Free cash flow increased to $216.3 million through the second quarter of fiscal 2015 from $214.3 million through the second quarter of fiscal 2014. Capital expenditures through the second quarter of fiscal 2015 were $114.5 million as compared to $106.3 million through the second quarter of fiscal 2014.

“Our teams once again delivered on our synergy expectations, expanded our core gross margins and demonstrated expense discipline to grow our Comparable Operating Income 8.7% in the quarter,” said Mike Norona, Executive Vice President and Chief Financial Officer. “We continue to stay focused on our base business while meeting our integration milestones and remain on pace to deliver against our full-year guidance for Comparable Cash EPS in the range of $8.10 to $8.30 including achievement of our full-year synergy targets.”