Advance Auto Parts, Inc. (NYSE: AAP) has reported its financial results for the third quarter ended October 5, 2024. The company's net sales from continuing operations totaled $2.1 billion, compared with $2.2 billion in the third quarter of the prior year. Comparable store sales decreased by 2.3%. The company's gross profit increased by 11.0% to $907.9 million, or 42.3% of net sales, compared with 36.9% in the third quarter of the prior year.
Adjusted operating income was $16.7 million, or 0.8% of net sales, compared with (3.3)% in the third quarter of 2023. The company's effective tax rate was (58.4)%, compared with 24.5% in the third quarter of 2023. The company's diluted loss per share for the quarter was $0.42, and the adjusted diluted loss per share was $0.04, compared with a loss per share of $1.19 in the third quarter of 2023.
Net cash provided by operating activities was $81.0 million through the third quarter of 2024, compared with $28.3 million of cash used in operating activities in the same period of the prior year. Free cash flow through the third quarter of 2024 was an outflow of $48.7 million, compared with an outflow of $202.5 million in the same period of the prior year.
On the strategic front, the company has announced an asset optimization program targeting the reduction of 500 corporate stores, 200 independently owned locations, and four distribution centers by mid-2025. Additionally, it has introduced new fiscal 2027 financial objectives targeting approximately 7% adjusted operating income margin and approximately 2.5x debt leverage ratio.
Looking ahead, the company is providing preliminary guidance for the balance of 2024, including expectations for continuing operations as well as adjusted metrics that take into account non-GAAP adjustments. The company is also introducing new fiscal 2027 financial objectives. These objectives include a net sales target of approximately $9,000 million and comparable sales growth of 0.50% * 1.50%.
The company is executing a strategic plan to improve business performance with a focus on core retail improvements. It has identified opportunities to improve adjusted operating income margin by more than 500-basis points through fiscal 2027.
Advance Auto Parts' investor conference call to detail its results for the third quarter ended October 5, 2024, is scheduled to begin at 8 a.m. Eastern Time on Thursday, November 14, 2024. The webcast will be accessible via the investor relations page of the company's website. Following these announcements, the company's shares moved 7.5%, and are now trading at a price of $44.01. For more information, read the company's full 8-K submission here.
