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Advance Auto Parts Grapples With Higher Fuel Costs

(Ezequiel Minaya – Wall Street Journal)

An unexpected jump in fuel prices during the latest quarter gummed up the supply chain and tapped the brakes on profitability at Advance Auto Parts Inc., said interim finance chief Jeffrey Shepard.

Higher energy costs were among the lead pressures that reduced the company’s gross profit margin by 54 basis points, Mr. Shepard said, speaking on the company’s conference call. Overall, gross profit margin improved to 44.3% during its fiscal first quarter from 44% posted during the same period last year.

“Biggest drivers of our supply chain headwind were related to transportation costs due to higher fuel prices, as well as the expected costs related to the new distribution centers opened in the second half of 2017,” said Mr. Shepard, who has filled in as CFO since the April departure of Tom Okray. Click here to read more.

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