At first glance, you might think the turbocharged earnings report from Advance Auto Parts
The Virginia-based auto-parts retailer reported a 21% year-over-year earnings increase in its most recent quarter. There was an 8.7% increase in total sales for the quarter and a 7.7% increase in comparable-store sales.
Since initiating a strategic shift in 1996, Advance has increased its focus on serving commercial clients. That move has helped rev up not only sales, but also profitability. It also probably helped the company's earnings from stalling out during the recession.
Fortunately for shareholders, Advance's financial success has also powered up its stock price. Like competitors AutoZone
Although the profits can't roll in forever, Advance should be in the driver's seat for the foreseeable future. Both consumers and businesses are likely to remain on tight budgets for the rest of the year. That bodes well for the company, since forsaken new-car sales mean older vehicles will need repairs and replacement parts to stay in serviceable condition. All those squeaky engine belts are music to Advance Auto Parts' ears.
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