Advance Auto Parts Inc (0H9G.L) Q2 2024 Earnings Report

In QQ2 2024, Advance Auto Parts reported a clear top-line decline with resilient profitability and positive cash generation. Revenue of $2.683B declined 21.2% year over year, while gross profit reached $1.114B and the gross margin held at 41.5%. Despite the revenue drop, operating income rose about 10% year over year to $71.8M, and net income improved roughly 12% to $45.0M, with an EPS of $0.75. These dynamics translated into an EBITDA of $144.5M and an EBITDA margin near 5.4%, underscoring ongoing cost discipline and mix benefits that offset the weaker top line.

Cash flow was a bright spot: operating cash flow was $85.1M, capital expenditures were modest at $43.5M, resulting in free cash flow of about $41.6M. The company carried a net debt position of approximately $4.0B and $479M in cash, highlighting leveraged balance sheet dynamics but a runway for deleveraging driven by free cash flow. The quarterly performance demonstrates margin resilience and cash generation capability, albeit in a market characterized by cyclical demand for automotive replacement parts and intense competition in the DIY and professional service channels.

Looking ahead, management did not publish explicit quantitative guidance in the provided data. Investors should monitor leverage progression, inventory management (noting a high days inventory on hand), SG&A discipline, and the trajectory of online and professional-channel mix as key drivers of earnings quality. The platform benefits from a diversified store network and cross-brand opportunities (Advance Auto Parts, Autopart International, Carquest, and Worldpac), with potential growth from omni-channel initiatives and parts-services offerings.