Advance Auto Parts Inc Advance Auto Parts Inc W/I ver: 2

Q1 2021 Earnings Conference Call

6/2/2021

spk_2: Welcome to the Advanced Auto Parts
spk_1: first quarter 2021
spk_2: conference call before we again Elizabeth Taliban Senior vice president communications and investor relations will make a brief statement concerning forward looking statements felt will be discussed on this call. Please go ahead.
spk_1: Good morning and thank you for joining us to discuss our Q12020 results that we highlighted in our earnings released this morning. I'm joined by Tom Greco, our president and chief executive officer and Jeff Sheppard, our executive vice president and chief financial officer going there prepared remarks, We'll turn our attention to answering your questions before we begin. Please be advised that are remarks today may contain forward looking statement. All statements other than statements of historical facts are forward looking statements, including but not limited to statements regarding our initiatives, plan projections, guidance and future performance actual results could differ materially from the projected for implied by the forward looking statements. Additional information about factors that could cause actual results to differ can be found under the capture forward looking statements and risk factors. In our most recent annual report on form 10-K and subsequent filings made with the commission. Now, when you turn to call over to tom Gregory
spk_0: thanks Elizabeth and Good morning First, I'd like to thank our independent partners and team members all over the world for their passion and commitment to serve our customers throughout the pandemic. We also hope that you and your families are healthy and safe. The health and safety of our team members and customers has been a top priority over the past year. As you saw earlier this morning, our final Q1 financial performance exceeded the estimated results be provided on April 20 with strength across all channels. We delivered comparable store sales growth of 24.7 And margin expansion of 478 basis points versus the prior year. On a two year stack, our comp sales growth was 15.4 Adjusted diluted mps of $3.34 represented an all time quarterly high for A. P. And improved more than 230% compared to Q 1 2020. Free cash flow of $259 million $203 million dollars to our shareholders through a combination of share repurchases and our quarterly cash dividend. In addition, we recently announced an updated capital allocation framework targeting top quartile total shareholder return highlighted by operating income growth, share repurchases and an increase in our dividend. This further reinforces our confidence in future cast generation and our commitment to returning excess cash to shareholders. As outlined in april. We're building an ownership culture as well as a differentiated operating model in advance. Over the past few years, we've made substantial investments in our brand, our digital and physical assets and our team. These investments along with external factors enable us to post a strong start to 2021. Clearly the federal stimulus package along with our first real winter weather in three years was a benefit to our industry from a category perspective net sales growth was led by batteries, appearance, chemicals and waivers Geographically all eight regions posted over 20% growth importantly over the past year, the Northeast, our largest region had been below our overall reported growth rate and well below that of our top performing regions In Q one, the gap narrowed and in recent weeks the northeast has been leading our growth. This was in line with our expectations as mobility is increasing in large urban markets in the Northeast, Which were disproportionately impacted by COVID-19 last year. Well D. I. Y. Omni Channel and Professional performed well, delivering double digit comp sales growth. In the quarter, we saw strong increases versus year ago, with a double digit increase in transactions and high single digit increases in dollars per transaction in both channels. In terms of cadence, D. I. Y. Lead the way early in CUBA As the country began to reopen later in the quarter, professional came on strong, resulting in pro growth of over 20% in Q1 with continued momentum into Q two. It changes in channel performance highlights.
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