AAP - Embedded Expectations Analysis - 2020 10 19
Advance Auto Parts, Inc. (AAP:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 25.4x Uniform P/E. At these levels, the market has expectations for profitability to remain flat, and management may be concerned about their supply chain initiatives, their position in batteries, and their ability to improve their professional businessSpecifically, management may lack confidence in their ability to continue improving their professional business, maintain new record-high TechNet customer sign-ups, and quickly address the needs of their professional customers. They may also be concerned about the further execution delay of some of their key supply chain initiatives and potential supply constraints, particularly in the Worldpac business. Furthermore, management may lack confidence in their ability to establish their position in the market for batteries, continue reducing costs by leveraging store labor, and further secure marketing investments for DieHard. They may also have concerns about the performance of their online business, the continued decline in driven miles, and their current inventory levels
Advance Auto Parts is an automotive aftermarket parts provider in North America, serving both professional installers (Professional), and do-it-yourself (DIY), customers as well as independently owned operators. The company's stores and branches provide a range selection of brand name, original equipment manufacturer and private label automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles and light and heavy duty trucks. Through its integrated operating approach, the company serves its Professional and DIY customers through a variety of channels ranging from brick and mortar store locations to self-service e-commerce sites.
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