|Price Range 12mo avg:||$625K – $2.5M|
|$/sf 12mo avg:||$188.83|
|CAP Rate 12mo avg:||7.31%|
|Lease Terms:||15yrs NNN|
|Building Size avg:||7,500 SF|
|Lot Size avg:||1+/- acres|
Advance Auto Parts (NYSE: AAP), headquartered in Roanoke, Va., Advance Auto Parts, Inc., the largest automotive aftermarket parts provider in North America, serves both the professional installer and do-it-yourself customers.
As of September, 2015 Advance now operates 5,297 company-operated stores, 105 Worldpac branches, and services approximately 1,400 independently owned Carquest branded stores in 49 states, Puerto Rico, the Virgin Islands and Canada.
Advance employs approximately 74,000 Team Members.
AAP’s strong financial profile allowed for an all-cash transaction for the acquisition of General Parts International, Inc. (GPII), a leading privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands supports Advance’s commitment to maintaining its investment grade ratings. The transaction created the largest automotive aftermarket parts provider in North America, with annual sales of over $9.3 billion.
Notable Achievements 2008 – Present
- Opened 109 new Advance stores and 18 new Autopart International Stores, bringing the total store count to 3,368.
- Opened 75 new Advance stores and 32 new Autopart International Stores, bringing the total store count to 3420.
- Opened 3500th store in Westerly, Rhode Island
- Awarded full investment-grade status by Standard & Poor’s and Moody’s.
- Secures third consecutive year of double-digit Commercial comparable store sales growth
- Advance Auto Parts celebrates its 10th year as a public company
- Acquired DriverSide and MotoLogic to enhance Advance’s eServices for Commercial Customers
- Opened a new state-of-the-art distribution center in Remington, Indiana offering 20% more Skus and daily replenishment to local Advance Stores
- Acquired 124 B.W.P. Distributors stores, enabling Advance Auto Parts to continue its expansion in the Northeast, which continues to be a strategic growth area for Advance.
- Opened 4,000th store in Montgomery, NY. This new store is located in the Northeast, a key geographic growth area for Advance and part of the Company’s strategy to continue expanding its footprint.
- Celebrated 20 year partnership with JDRF and $35 million dollars raised for diabetes research
- Announced a definitive agreement to acquire General Parts International, Inc. (GPII), a leading privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands, in an all-cash transaction with an enterprise value of $2.04 billion.
- Announced the completion of the acquisition of General Parts International, Inc. (GPII). GPII was a leading privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands.
|S&P Credit Rating:||BBB-|
|Moody’s Credit Rating:||Baa3|
|Annual Revenue 2014:||$9.84B|
|Annual Revenue 2013:||$6.49B|
|Revenue Growth:||↑ 51.6% from 2013|
|Units (Sept. 2015)||6,802|
|Average Units Volume:||$1.8M|
*$82.5M adjusted to $493,825 includes BWP integration costs of $9.0 million and General Parts integration costs of $73.2 million.
Yahoo! Finance: AAP News Latest Financial News for AAP
AutoZone vs Advance Auto: Which Retail Stock Is A Better Pick?
on October 25, 2020 at 10:15 am
The auto industry is gradually recovering from the sales slump experienced during the pandemic-led lockdown period earlier this year. According to General Motors, total industry vehicle sales came in at 15.9 million units (at a seasonally adjusted annualized rate) in the third quarter, reflecting an increase of about 4 million units from the second quarter. Consumers are preferring owned-vehicles to public transportation due to the COVID-19 outbreak. Also, the demand for used cars has been strong over recent months. Challenging macro conditions are impacting consumers’ spending capacity, thus boosting the demand for used vehicles compared to new vehicles.Auto parts retailers have also gained momentum over recent months as people are spending their extra time at home toward DIY (do-it-yourself) vehicle repairs and maintenance activity. Against this backdrop, we will use the TipRanks Stock Comparison tool to place AutoZone and Advance Auto Parts alongside each other and see which auto parts retailer offers a more compelling investment opportunity.AutoZone (AZO)AutoZone, the largest US retailer of automotive replacement parts and accessories, operates 5,885 stores in the country, 621 stores in Mexico and 43 stores in Brazil. After facing challenges in 3Q FY20 due to the temporary closure of stores amid pandemic-led lockdowns, the company’s domestic same-store sales grew 21.8% in 4Q FY20 (ended Aug 29). According to CEO Bill Rhodes, 4Q same-store sales growth marked the company’s largest quarterly growth since going public in 1991.Overall, 4Q FY20 sales increased 14% to $4.5 billion year-over-year with same-store sales of the company’s DIY business rising 24%. The DIY category benefited as people had more time at their hands to pursue car enhancement and maintenance projects. The company also attributed the demand to COVID-19 unemployment benefits.In addition, AutoZone experienced strong growth in its online channels. However, online sales still account for less than 5% of the DIY business. Meanwhile, total DIFM (do-it-for-me) sales increased 16.8% to $976 million year-over-year. Strong top-line growth helped the company deliver EPS of $30.93 in 4Q FY20, reflecting a 47.6% growth on an adjusted basis.AutoZone did not provide guidance for FY21 due to COVID-related uncertainties. At the same time, the company said that it expects sales growth to moderate over time. However, it continues to foresee high demand for its products and services given the challenging economic conditions in which consumers tend to improve their existing vehicles rather than buy a new one.The company expects to open about 150 new stores in the US and 50 international stores in FY21. That's up from the opened 113 US stores and 25 stores across Mexico and Brazil in FY20. It also plans to gradually resume its share buyback program in 1Q FY21 after the temporary suspension in March. (See AZO stock analysis on TipRanks)On Oct. 13, Raymond James analyst Matthew McClintock raised the stock's price target to $1,565 from $1,500 and reiterated his Buy rating. The analyst called AutoZone his top pick and noted “Management gave rare forward commentary for the first time in at least five years, and we certainly believe it was positive for both the forward quarter (1Q21) and forward year (FY21).”Commenting on the commercial business, the analyst added “After more than five years of long-term investments in the DIFM business (as well as persistent skepticism from the investment community), AZO began to deliver outstanding growth and returns for this segment over a year ago, which was only further demonstrated by recent results. We firmly believe that market consolidation opportunities in a post COVID world should only increase our pre COVID expectations for growth in this segment.”The Street is in line with McClintock’s bullish stance. A Strong Buy consensus on AutoZone stock is based on 10 Buys versus 2 Holds and no Sells. With shares down 0.74% year-to-date, the average analyst price target of $1,409.08 implies upside potential of 19.1% in the 12 months ahead.Advance Auto Parts (AAP)Auto aftermarket parts retailer Advance Auto Parts sells its products to professional installers and DIY customers through its 4,819 stores and 167 Worldpac branches in the US, Canada, Puerto Rico and the US Virgin Islands. The company also serves a network of 1,262 independently owned Carquest brand stores.Following an 8.6% decline in 1Q FY20 sales, Advance Auto bounced back in 2Q FY20 (ended Jul. 11) with sales rising 7.3% to $2.5 billion year-over-year. Comparable store sales growth of 7.5% in 2Q marked the highest quarterly growth rate for the company in nearly 10 years. The company attributed strong sales momentum to a spike in industry demand driven by government stimulus, unemployment benefits and a rise in DIY projects.Notably, the company’s DIY omnichannel business drove comparable sales growth in the second quarter and performed better than the DIFM business. The DIY omnichannel business benefited from the company’s nationwide launch of the same-day delivery facility and initiatives to strengthen the front-end user experience on the online platform, which helped in boosting site traffic and conversion rates.However, the DIFM business was hit by the temporary closure of garages across North America due to the pandemic. Plus, Advance Auto’s Professional business derives a significant proportion of its sales from the Northeast, Mid-Atlantic and the West Coast regions, which were severely impacted by COVID-19.Robust sales growth coupled with margin expansion due to favorable channel mix, supply chain efficiencies and cost savings helped in driving 46% growth in 2Q adjusted EPS to $2.92. In addition, Advance auto has been enhancing its supply chain through improved execution and standardization in its distribution centers.It has resumed its single warehouse management system or WMS initiative after halting it in 2Q. Under this initiative, Advance Auto is consolidating its warehouse management system across all its distribution centers. The company aims to complete WMS implementation in its large distribution centers by the end of 2021.Backed by the results, Advance Auto lifted the temporary suspension of its share repurchase program. Looking ahead, the company did not provide a forecast for 3Q but said that DIY momentum in the second quarter continued into the third quarter. (See AAP stock analysis on TipRanks)Earlier this month, JPMorgan analyst Christopher Horvers upgraded AAP to Buy from Hold and raised the price target to $190 from $183.The analyst cited five reasons for the upgrade “(1) strong/sustainable current trends bridging to an easy winter weather comparison with this year looking relatively better vs. an acutely warm winter last year that hurt AAP more than peers (one of the reasons why we downgraded in January); (2) 'own the Pro in 2021' given AAP’s ~50% DIFM mix combined with the exaggerated impact COVID-19 had on DIFM trends in its core Northeast market; (3) increasing top-line benefits from the peak repair cohort (6-12 years old) in 2021 and 2022; (4) AAP’s margin story blossoms in 2021 and more so in 2022 as the company progresses on its transformation; and (5) stock underperformance relative to the market."Overall, the Street is cautiously optimistic on the stock with 10 Buys, 3 Holds and 2 Sells adding up to a Moderate Buy analyst consensus. The average analyst price target of $174.83 implies upside potential of 13% over the coming 12 months. That's after shares declined 3.4% so far this year.ConclusionThe Street has a more bullish outlook on AutoZone stock compared to Advance Auto Parts. Moreover, a lower valuation multiple and higher upside potential make AutoZone stock a better retail pick than Advance Auto currently.To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. 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Advance Auto Parts CEO on spike in Q2 net sales, growing customer base, online traffic
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