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Advance Auto Parts AAP recently announced a multi-year agreement with Bridgestone Retail Operations, per which the latter will stock Advance’s DieHard batteries in its more than 2,200 tire and vehicle service centers across the United States.
Headquartered in Nashville, TN, Bridgestone Retail Operations is a subsidiary of Bridgestone Americas, Inc, and operates more than 2,200 tire and vehicle service centers across the United States, including Firestone Complete Auto Care, Tires Plus, Hibdon Tires Plus and Wheel Works store locations. The Credit First National Association and Firestone Complete Fleet Care operations also are part of Bridgestone.
Per the above-mentioned agreement, Bridgestone will carry and install the DieHard range of the Silver, Gold, Platinum and Platinum AGM batteries. The system-wide stocking roll-out was concluded in the month of July.
Both companies are highly optimistic about this partnership. Advance Auto Parts is highly thrilled to be entrusted with Bridgestone’s battery business through its iconic DieHard brand. In fact, the automotive parts provider is ecstatic about providing customers and their vehicles with the power, reliability and durability of the DieHard batteries.
For Bridgestone, the collaboration with the DieHard battery brand completes its portfolio of the best-in-class tire and automotive service products offered across the company’s retail store network. The partnership further bolsters Bridgestone’s ability to cater to its customers’ needs through a trusted and reliable brand.
DieHard has served as America’s most trusted auto battery for more than 50 years, facilitating customers in starting their vehicles reliably even during severe weather conditions. Every DieHard battery purchased at a Bridgestone store comes with the DieHard Assurance, which provides consumers free battery replacement and roadside assistance.
Advance Auto Parts operates in the U.S. automotive aftermarket industry and is primarily engaged in selling replacement parts (excluding tires), accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, light and heavy-duty trucks. It is a leading automotive parts provider in North America, serving the “do-it-yourself” or “DIY”, and “do-it-for-me” or “DIFM” (or Commercial) customers. As of Jul 17, 2021, Advance Auto Parts operated 4,748 stores and 215 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. The company also serves 1,306 independent Carquest branded stores across these locations in addition to Mexico and various Caribbean islands.
Advance Auto Parts’ efforts to expand and optimize its footprint by opening new stores, widening online presence and strategic collaborations is anticipated to result in higher sales and profits in the days to come. In the first half of 2021, the company opened six Worldpac branches, 12 Advance and Carquest stores, and 28 independent Carquest stores. The in-store pick-up advancements and enhancements to the firm’s online portal ‘MyAdvance’ have improved the customer shopping experience. The company has enhanced the front-end user experience of its online platform, which is resulting in greater traffic and higher conversion rates, while the in-store execution is yielding notable gains in units per transaction.
The company is undertaking several initiatives to strengthen and streamline its supply chain to meet the evolving need of customers. The cross-banner replenishment and warehouse management systems integration initiatives remain on track, and are set to unlock the firm’s long-term margin expansion.
However, Advance Auto Parts has been bearing the brunt of high selling, general and administrative (SG&A) costs, which are limiting the firm’s margins. The trend is expected to continue amid huge costs for store openings, partnerships and investments to strengthen the supply chain. Rising investments to develop technology platforms and digital initiatives are also expected to dent the firm’s margins and cash flows.
Zacks Rank & Key Picks
Advance Auto Parts currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Better-ranked stocks in the auto sector include Toyota Motor TM, BRP Inc DOOO and LKQ Corporation LKQ, all of which sport a Zacks Rank of 1, at present.
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