On Feb. 15, Advance Auto Parts (NYSE:AAP) released earnings for the fourth quarter ended Dec. 30.

  • Revenue increased by 5.4% to $1.02 billion with a 1.6% increase in comparable-store sales.
  • The bottom line dropped 10.2% to $35.4 million. Management attributed the decline to soft sales, which limited its ability to leverage expenses.
  • During Q4, the company opened 53 new stores, remodeled 12, and relocated 16 stores. Given the weak sales, management will reassess how to allocate capital by opening, remodeling, and relocating fewer stores in hopes of improving selling, general, and administrative expenses and return on capital.
  • Advance Auto Parts is a three-star stock in Motley Fool CAPS, our interactive stock database.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$1,016.2

$963.7

5.4%

Net Profit

$35.4

$39.4

(10.2%)

EPS

$0.33

$0.36

(8.3%)

Diluted Shares

106.2

109.8

(3.2%)



Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

47.1%

46.7%

0.4

Operating Margin

6.3%

7.3%

(1.0)

Net Margin

3.5%

4.1%

(0.6)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$11.1

$40.8

(72.7%)

Accounts Rec.

$97.0

$94.7

2.5%

Inventory

$1,463.3

$1,367.1

7.0%



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable*

$779.1

$748.6

4.1%

Long-Term Debt

$477.2

$406.0

17.5%

*Includes financed vendor accounts payable.

Learn the ways of the balance sheet.

Cash Flow Highlights

FY 2006

FY 2005

Change

Cash From Ops.

$333.6

$321.6

3.7%

Capital Expenditures

$258.6

$216.2

19.6%

Free Cash Flow

$75.0

$105.4

(28.8%)



Find out why Fools always follow the money.

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  • CSK Auto (NYSE:CAO)
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Related Foolishness:

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