William Blair on Advance Auto Parts (AAP), 'management’s turnaround efforts are seemingly working and starting to materialize'

William Blair analyst Philip Blee reiterated a Market Perform rating on Advance Auto Parts (NYSE: AAP).

The analyst comments "The biggest takeaway from the print was that management’s turnaround efforts are seemingly working and starting to materialize faster than expected. Admittedly, Advance has been a turnaround story for over a decade with very little to show for it, until now. We are incrementally encouraged by CEO Shane O’Kelly’s leadership and ability to quickly instill meaningful change. For example, the company had long spoken to issues with inventory allocation and obsolete merchandise but initiatives to improve productivity seemed to fizzle out during the store rollout phase. Now, the current management team seems to have a handle on the situation. In just over a year, the company has written off obsolete inventory, optimized its SKU count, conducted wide-scale vendor line reviews, adjusted pricing in line with the industry, and recently began to roll out a top-down assortment plan across 10 markets, which led to a 50-basis-point lift in comps with plans to implement similar frameworks across the top 50 markets by year-end."

For an analyst ratings summary and ratings history on Advance Auto Parts click here. For more ratings news on Advance Auto Parts click here.

Shares of Advance Auto Parts closed at $31.31 yesterday.

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