Advance Auto Parts announced its financial results for the second quarter ended July 16, 2016. GAAP earnings per diluted share were $1.68.
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Second quarter adjusted earnings per diluted share were $1.90 which exclude $0.08 of amortization of acquired intangible assets and integration and restructuring costs of $0.14, primarily associated with the acquisition of General Parts International.
Total sales decreased 4.8% to $2.26 billion, as compared with total sales during the second quarter of fiscal 2015 of $2.37 billion.
The sales decline was driven by the comparable store sales decrease of 4.1%, the store closures in 2015 and the effect of Carquest consolidations. The sales decline was partially offset by new store and Worldpac branch openings.
Advance Auto Parts' Gross Profit rate was 44.8% of sales during the second quarter as compared to 45.9% during the second quarter last year. The 110 basis-point decrease in gross profit rate was primarily the result of supply chain expense deleverage due to the comparable store sales decline and higher supply chain operating expenses.
On a GAAP basis, Advance Auto Parts' SG&A rate was 35.2% of sales during the second quarter as compared to 35.0% during the same period last year.
The 14 basis-point increase was driven primarily by fixed cost deleverage due to our comparable store sales decline and higher self-insurance expense partially offset by lower incentive compensation costs and Advance Auto Parts' continued cost reduction initiatives and expense reduction actions to offset lower sales.
Advance Auto Parts' Adjusted SG&A rate was 34.0% of sales during the second quarter as compared to 33.8% during the same period last year.
On a GAAP basis, Advance Auto Parts' operating income during the second quarter of $216.7 million decreased 15.7% versus the second quarter of fiscal 2015. On a GAAP basis, the Operating Income rate was 9.6% during the second quarter as compared to 10.8% during the second quarter of fiscal 2015.
Advance Auto Parts' Adjusted Operating Income was $243.1 million during the second quarter, a decrease of 14.8% versus the second quarter of fiscal 2015. As a percentage of sales, Adjusted Operating Income in the second quarter was 10.8% versus 12.0% during the second quarter of fiscal 2015.
Operating cash flow decreased approximately 41.7% to $192.9 million through the second quarter of fiscal 2016 from $330.8 million through the second quarter of fiscal 2015.
Free cash flow was $55.0 million through the second quarter of fiscal 2016 compared to $216.3 million through the second quarter of fiscal 2015.
Capital expenditures through the second quarter of fiscal 2016 were $137.9 million as compared to $114.5 million through the second quarter of fiscal 2015. ■