Warm weather hurt sales at Advance Auto Parts in the fourth quarter, but other factors were in play too as the company’s performance lagged competitors.
The retailer said same store sales were negatively impacted by the timing of the New Year's day holiday, which fell in the 53rd week last year, by the foreign exchange currency fluctuations from its Canadian business, and by warmer winter weather.
For the fourth quarter ended Jan. 2, the retailer reported aprofit of $54.8 million. On a per-share basis, the Roanoke, Va.-based company said it had net income of 74 cents. Earnings, adjusted for non-recurring costs, were $1.22 per share. The retailer also posted revenue of $2.03 billion in the period, which fell short of some Street forecasts. For the year, the company reported profit of $473.4 million, or $6.40 per share. Revenue was reported as $9.74 billion.
“Fourth quarter sales results did not meet our expectations, however, we demonstrated additional cost discipline to offset the softer than expected sales and met our earnings expectations," said George Sherman, president and interim CEO. "We are a company composed of 5,300 hyper-local businesses that serve the needs of our valuable local customers. We recognize that the best way to substantially improve our customers' experience is to empower our terrific team members who touch those customers every day. We are therefore adapting to a more empowered, field-centric organization that aggressively pursues improved profitability while achieving better than market top line growth. We are relentlessly pursuing opportunities to reduce expenses and increase efficiency while providing our customers with an exemplary experience that drives increased frequency. Through these actions, we fully expect to generate greater profitability and value for our shareholders."
In 2016 the company said it plans to open 65 to 75 new stores including Worldpac branches. It also plans 325 to 350Carquest store conversions or relocations. It expects same store sales in the llow single digits.
As of Jan. 2, Advance operated 5,171 stores and 122 Worldpac branches and served approximately 1,300 independently owned Carquest branded stores in the United States, Puerto Rico, the U.S. Virgin Islands and Canada.