Advance Auto Parts shares plummet after dismal Q1
Shares of Advance Auto Parts plummeted roughly 30% during early trading Wednesday after the company's first-quarter earnings significantly missed Wall Street's expectations and executives slashed the retailer's yearly guidance and quarterly dividend.
The Raleigh-based auto parts supplier blamed its dismal first-quarter results and bleaker outlook on higher-than-expected costs for its professional sales, inflationary pressure, supply chain problems and lower, unfavorable product mix.
The company's earnings per share for the period came in at just 72 cents, compared with an expected $2.57 per share, according to average analyst estimates compiled by Refintiv. Its quarterly revenue of $3.42 billion slightly missed expectations of $3.43 billion.
"We expect the competitive dynamics we faced in the first quarter to continue, resulting in a shortfall to our 2023 expectations. We have reduced our full-year guidance and our board of directors made the difficult decision to reduce our quarterly dividend," CEO Tom Greco said in a statement.
Shares of other auto parts suppliers such as O'Reilly Automotive and AutoZone were also lower Wednesday. However, some Wall Street analysts believe Advanced Auto Parts' problems could be more operational than industry-wide.
"In our view, AAP issues are, likely, largely its own, and could suggest improved market share opportunities for Outperform-rated AutoZone (AZO) and O'Reilly Auto (ORLY)," Oppenheimer analyst Brian Nagel said in an investor note Wednesday.
Source: CNBC
