August 14, 2018—Advance Auto Parts announced its financial results for the second-quarter ended July 14, 2018, and total net sales were $2.3 billion, a 2.8 percent increase versus the second quarter of the prior year.
Comparable store sales for the second quarter of 2018 increased 2.8 percent.
Adjusted gross margin was 43.7 percent of net sales in the second quarter of 2018, a 16 basis point decrease from the second quarter of 2017. The decline was primarily driven by an increase in supply chain costs, including higher transportation and fuel expenses. The company's GAAP gross profit margin decreased to 43.5 percent from 43.9 percent in the second quarter of the prior year.
Adjusted SG&A was 34.9 percent of net sales in the second quarter of 2018, a 35 basis point improvement as compared to the second quarter of 2017. This was primarily driven by savings in labor and insurance costs, partially offset by higher bonus. The company's GAAP SG&A of 36.3 percent of net sales decreased compared to 37.4 percent in the same quarter of the prior year.
The company's Adjusted operating income was $205.3 million in the second quarter of 2018, an increase of 5 percent versus the second quarter of the prior year. Adjusted operating income margin improved versus the same quarter of the prior year by 19 basis points to 8.8 percent of net sales for the second quarter of 2018. On a GAAP basis, the company's Operating income was $167.5 million, 7.2 percent of net sales, an increase of 72 basis points from the second quarter of 2017.
The company's effective tax rate in the second quarter of 2018 was 25.2 percent, compared to 36.0 percent in the second quarter of the prior year. The company's Adjusted EPS was $1.97 for the second quarter of 2018, an increase of 24.7 percent compared to the second quarter of the prior year. On a GAAP basis, the company's Diluted EPS increased 35.9 percent to $1.59.
Operating cash flow was $444.0 million through the second quarter of 2018 versus $267.3 million in the same period of the prior year, an increase of 66.1 percent. Free cash flow through the second quarter of 2018 was $382.2 million, an increase of 163.6 percent compared to the same period of the prior year.
