DOW JONES NEWSWIRES
Advance Auto Parts Inc.'s (AAP) fiscal second-quarter earnings rose 6.6% as the retailer continued to expand its margins and sales continued to accelerate despite the recession.
But in after-hours trading, its shares were down 4.2% at $43.70. The stock, having essentially doubled since late November, hit a 52-week high at the end of July.
So far, the recession hasn't put much of a brake on auto-parts retailers as consumers have put off buying new cars and are doing more of their own repairs. Still, the company has said it wants to rev up profits by renegotiating rents and moving or closing stores.
The second-largest U.S. auto-parts retailer after AutoZone Inc. (AZO), Advance Auto Parts reported earnings of $80.3 million, or 83 cents a share, up from $75.4 million, or 78 cents a share, a year earlier. The latest quarter included a charge of 6 cents a share for store divestitures.
Sales for the quarter ended July 18 climbed 7% to $1.32 billion.
Analysts estimated adjusted earnings of 83 cents a share on revenue of $1.32 billion, according to a poll by Thomson Reuters.
Same-store sales rose 4.8%, up 0.7% for do-it-yourself customers and 14.8% to commercial repair shops. The gains, however, were less than what was seen in the prior quarter.
Gross margin widened to 49.3% from 47.4%.
During the second quarter, Advance opened 23 stores, closed 21 and moved three. As of July 18, the store count was 3,407. So far this year, the company has closed 24 stores, resulting in a total charge of 10 cents a share. The company expects the costs of shedding 40 to 55 stores to reach 15 cents to 22 cents a share by the end of the fiscal year.
-By Jay Miller, Dow Jones Newswires; 212-416-2355; jay.miller@dowjones.com