Advance Auto Parts Inc. is scheduled to report second-quarter earnings before the market open on Thursday, with investors focused on whether the company can sustain margin expansion amid cost pressures.
Analysts project adjusted earnings per share of $0.80, a 15.6% increase from the year-ago period, on revenue of $2.04 billion, up 2.0% year-over-year. Sequential comparisons show a modest improvement in earnings from the prior quarter’s $0.77 per share, though revenue is expected to decline from $2.6 billion due to seasonal factors. Over the past two months, EPS estimates have risen by 0.88%, while revenue estimates have remained largely unchanged.
The stock, currently trading at $56.96, carries a neutral consensus rating from 25 analysts, with a mean price target of $60.05, implying a 5.4% upside potential. RBC Capital maintained a hold rating but raised its target to $67, citing expectations for an in-line earnings print and a more challenging comparison in the second half of the year. Citi, also maintaining a hold rating, lowered its target to $57.
Investors will scrutinize comparable sales growth, projected at approximately 2%, particularly the performance of the professional installer segment and the do-it-yourself channel as vehicle miles driven rise. A key focus will be on whether the company can achieve adjusted operating margins of 4.5%, up 150 basis points from the prior year, despite input cost pressures and supply chain challenges. The company is tracking toward the high end of its full-year guidance.
In the first quarter, Advance Auto Parts reported adjusted EPS of $0.77, surpassing the $0.43 consensus estimate by 79%. Comparable sales grew 3.5%, driven by mid-single-digit growth in the professional segment and low-single-digit growth in the DIY segment.
