May 24, 2017—Sales were down 2.7 percent for Advance Auto Parts in Q1 2017, compared to Q1 2016.
The news comes just three months after Advance announced that total yearly sales were down from $9.74 billion in 2015 to $9.57 billion in 2016.
The sales decrease of 3 percent was primarily driven by the comparable store sales decline of 2.7 percent, which Advance said is due to the seasonal demand shifts that occurred between quarters. It is also partially offset by positive first quarter growth at Worldpac.
Advance's gross profit rate decreased from 45.3 percent percent in 2016 to 44 percent in 2017. The company said this was primarily driven by investments in the customer, inventory optimization efforts and supply chain expense deleverage due to the comparable store sales decline.
The company's SG&A (selling, general and administrative expenses) increase was in line with company expectations and reflects the incremental customer focused investments and expense deleverage due to the comparable store sales decline. In contrast to the first quarter of 2016, which included the impact of aggressive cost reduction actions that negatively impacted customer service, Advance is refocusing its priorities to put the customer first and is reinvesting to restore and enhance critical customer capabilities.
Overall, the company's operating income decline (from $271 million to $180 million) was primarily driven by investments in the customer, expense deleverage due to the comparable store sales decline and inventory optimization efforts, Advance said.
