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Advance Auto Parts 3Q profit falls on weaker sales

Associated Press Modified: November 8, 2012 at 10:30 am •  Published: November 8, 2012
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When vehicle sales tumbled a few years ago, auto parts retailers such as Advance Auto Parts got a sales boost, as more Americans kept their vehicles longer and invested more in keeping them running.

But Americans have been buying new cars and trucks at a healthy pace in recent months, fueled by low interest rates and aging cars that need replacement. Americans also are feeling better about the economy and jobs, key drivers of sales.

Advance Auto Parts has been focused on streamlining and simplifying its organization to reduce costs and minimize the impact to sales and service levels.

Selling, general and administrative expenses grew more than one percent, but made up a larger part of its sales for the quarter as the company increased spending on promotions and advertising aimed at driving up customer traffic and maintain market share in a soft consumer environment.

The company reaffirmed its full-year earnings forecast of between $5.05 and $5.15 per share.

Advance Auto Parts Inc., which operates more than 3,725 stores in the U.S., Puerto Rico and the Virgin Islands, opened 35 stores during the quarter and 70 stores this fiscal year. It said it remains on pace to open between 120 and 140 stores in fiscal 2012.

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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.