Advance Auto Parts Announces Annual Net Sales of $11 Billion
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Advanced auto parts announced its financial results for the fourth quarter (12 weeks) and full year (52 weeks) ended January 1, 2022. The company’s 2020 results for the fourth quarter (13 weeks) and full year (53 weeks ) include one week.
Net sales for the fourth quarter of 2021 totaled $2.4 billion, an increase of 1.3% over the fourth quarter of the previous year. Excluding sales for the additional week of the fourth quarter 2020, net sales increased by 8.6%. Comparable store sales growth for the fourth quarter of 2021 was 8.2%.
Full-year 2021 net sales of $11 billion increased 8.8% over full-year 2020. On a comparative 52-week basis, net sales increased 10.6 %. For the full year 2021, comparable store sales growth was 10.7%.
“Advance had a strong fourth quarter and delivered a record year in 2021 across all key metrics,” said Tom Greco, President and CEO. “We remained focused throughout the year on executing the strategy we set out last April to deliver top quartile total shareholder return. Thanks to the dedication of our team members and independent partners, our business is significantly stronger and better positioned today than it was before the pandemic.
“We closed the year with record net revenue of $11 billion and an increase of approximately 159 basis points in adjusted operating margin compared to the comparative 52 weeks of 2020. We also returned a record $1 billion in cash to shareholders through share buybacks and quarterly cash. dividends,” added Greco. “Additionally, we have now granted more than 24,000 shares to frontline team members, worth more than $60 million at grant since the launch of our Fuel the Frontline program. This investment creates a culture of ownership that allows Advance to remain an employer of choice for the long term.
“As we begin 2022, we remain focused on the disciplined execution of our strategic plan,” Greco said. “While we are still navigating uncertain times with respect to macro factors, including significant inflation, the investments we have made to differentiate our business will continue to provide Advance with a competitive advantage. We believe these investments, along with industry tailwinds such as improved mileage and an aging fleet, will enable us to continue to deliver profitable growth and total shareholder return.
The company’s GAAP gross profit margin declined to 44.7% from 45.8% in the fourth quarter a year earlier. Adjusted gross margin increased 12.1% from the comparative 12 weeks of fourth quarter 2020 to $1.1 billion in fourth quarter 2021. Adjusted gross profit margin was 46.8% of net sales in fourth quarter of 2021, an increase of 145 basis points. compared to the comparative 12 weeks of the fourth quarter of 2020, mainly due to improvements in category management, including strategic pricing, tied inventory and own brand expansion. This was partially offset by continued inflationary costs, an unfavorable channel mix and the recovery of shrinkage benefits in the fourth quarter of the prior year. GAAP gross profit margin increased 47 basis points to 44.8% for full year 2021, while adjusted gross profit margin for full year 2021 was 46% , an improvement of 175 basis points compared to the 52 comparative weeks of the previous year.
In 2021, the company repurchased a total of 4.6 million common shares for a total consideration of $886.7 million, or an average price of $192.92 per share. At the end of the fourth quarter of 2021, the company had $545.5 million remaining under the share buyback program. On February 8, 2022, the company’s board of directors authorized an additional $1 billion to the existing share buyback program.
On February 14, 2022, the Company’s Board of Directors declared a 50% increase in the Company’s quarterly cash dividend to $1.50 per share to be paid April 1, 2022 to shareholders of record as of March 18, 2022.
Orientations for the year 2022
“Today we are presenting our guidance for full year 2022,” said Jeff Shepherd, executive vice president and chief financial officer. “We believe we are well positioned to drive growth building on our record 2021 results and continued execution of our strategic initiatives. We are encouraged by the first four weeks of 2022 with model sales trending at above the top of our full-year guidance range as our industry’s growth drivers remain positive, however our guidance also takes into consideration macroeconomic uncertainty from accelerating inflation in the overall economy and the impact it could have on our major customer.