Advance Autoparts stock plunges after first quarter disappointment

A customer’s vehicle is parked outside the Advance Auto Parts auto supply store in La Grange, Kentucky.

Luke Charrett Bloomberg | Getty Images

shares of advanced auto parts The company plunged about 30% in early trading Wednesday after its first-quarter results were well below Wall Street expectations and management cut its full-year outlook and quarterly dividend.

The Raleigh, N.C.-based auto parts supplier blamed dismal results and a bleak outlook on higher-than-expected costs of specialty sales, inflationary pressures, supply chain problems and an unfavorable product mix. .

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Analysts’ average estimates compiled by Refinitiv showed the company’s earnings per share came in at just 72 cents per share over the same period, compared with an expected $2.57 per share. Quarterly revenue was $3.42 billion, just below the $3.43 billion forecast.

CEO Tom said, “We expect the competitive dynamics we faced in the first quarter to continue and, as a result, to underperform our 2023 guidance. We have lowered our full-year guidance and the Board has reduced its quarterly dividend. I made a difficult decision,” he said.Greco said in a statement.

stocks of other auto parts suppliers such as oreilly automotive and auto zone Wednesday was also down. But some Wall Street analysts believe the problem with advanced auto parts could be worse than the industry as a whole.

“In our view, the AAP issue is probably largely a stand-alone issue, with the Outperform Rating Autozone (AZO) and the “It could be an indication that O’Reilly Auto (ORLY)’s market share opportunities are improving.” .

Advance Autoparts shares have been on the rise since early January 2022, when they peaked at more than $244 a share in intraday trading.

Advance Auto Parts announced in its quarterly release that it will pay a dividend of 25 cents per share in July. Advance Auto Parts announced a dividend of $1.50 per share in its last quarter earnings.

The company also lowered its earnings guidance for the full year, now expecting earnings per share of $6 to $6.50, down from the previous range of $10.20 to $11.20. That’s despite lowering net sales estimates by just $200 million to $300 million, suggesting operational problems with margins.

The company’s net sales in the first quarter were $3.4 billion, up 1.3% year-over-year. Gross profit fell 2.4% to $1.5 billion.

Net income for the quarter was $42.7 million, or 72 cents per share, down from $139.8 million, or $2.28 per share, in the year-ago quarter.

“We were expecting a difficult first quarter, but the result was below expectations,” Greco said.

Shares of auto-parts suppliers have benefited greatly in recent years from rising new and used car prices due to tight supply.Tight inventories and soaring prices due to stoppage of production coronavirus pandemic Supply chain issues lead many car owners to keep their cars longer, resulting in more repairs and maintenance.

Advance Auto Parts’ stock price peaked at more than $244 per share in January 2022. Since then, stock prices have fallen steadily. The stock fell below $100 a share on Wednesday for the first time since April 2020. The stock opened Wednesday at $79.23 per share.

“We have followed AAP and the auto parts retail industry for many years. We have consistently maintained the view that it hinders sustainable sales and profit growth,” Nagel said.

UBS analyst Michael Lasser said in an investor note on Wednesday that Advance Auto Parts’ results “reflect the challenge of catching up in an industry that is highly competitive and filled with top performers.” rice field.

– CNBC Michael Bloom contributed to this report.

Correction: Average analyst estimates compiled by Refinitiv. The company name was misspelled in previous versions.

Summarize this content to 100 words A customer’s vehicle is parked outside the Advance Auto Parts auto supply store in La Grange, Kentucky.Luke Charrett Bloomberg | Getty Imagesshares of advanced auto parts The company plunged about 30% in early trading Wednesday after its first-quarter results were well below Wall Street expectations and management cut its full-year outlook and quarterly dividend.The Raleigh, N.C.-based auto parts supplier blamed dismal results and a bleak outlook on higher-than-expected costs of specialty sales, inflationary pressures, supply chain problems and an unfavorable product mix. .Related investment newsAnalysts’ average estimates compiled by Refinitiv showed the company’s earnings per share came in at just 72 cents per share over the same period, compared with an expected $2.57 per share. Quarterly revenue was $3.42 billion, just below the $3.43 billion forecast.CEO Tom said, “We expect the competitive dynamics we faced in the first quarter to continue and, as a result, to underperform our 2023 guidance. We have lowered our full-year guidance and the Board has reduced its quarterly dividend. I made a difficult decision,” he said.Greco said in a statement.stocks of other auto parts suppliers such as oreilly automotive and auto zone Wednesday was also down. But some Wall Street analysts believe the problem with advanced auto parts could be worse than the industry as a whole.“In our view, the AAP issue is probably largely a stand-alone issue, with the Outperform Rating Autozone (AZO) and the “It could be an indication that O’Reilly Auto (ORLY)’s market share opportunities are improving.” .stock chart iconstock chart iconAdvance Autoparts shares have been on the rise since early January 2022, when they peaked at more than $244 a share in intraday trading.Advance Auto Parts announced in its quarterly release that it will pay a dividend of 25 cents per share in July. Advance Auto Parts announced a dividend of $1.50 per share in its last quarter earnings.The company also lowered its earnings guidance for the full year, now expecting earnings per share of $6 to $6.50, down from the previous range of $10.20 to $11.20. That’s despite lowering net sales estimates by just $200 million to $300 million, suggesting operational problems with margins.The company’s net sales in the first quarter were $3.4 billion, up 1.3% year-over-year. Gross profit fell 2.4% to $1.5 billion.Net income for the quarter was $42.7 million, or 72 cents per share, down from $139.8 million, or $2.28 per share, in the year-ago quarter.“We were expecting a difficult first quarter, but the result was below expectations,” Greco said.Shares of auto-parts suppliers have benefited greatly in recent years from rising new and used car prices due to tight supply.Tight inventories and soaring prices due to stoppage of production coronavirus pandemic Supply chain issues lead many car owners to keep their cars longer, resulting in more repairs and maintenance.Advance Auto Parts’ stock price peaked at more than $244 per share in January 2022. Since then, stock prices have fallen steadily. The stock fell below $100 a share on Wednesday for the first time since April 2020. The stock opened Wednesday at $79.23 per share.“We have followed AAP and the auto parts retail industry for many years. We have consistently maintained the view that it hinders sustainable sales and profit growth,” Nagel said.UBS analyst Michael Lasser said in an investor note on Wednesday that Advance Auto Parts’ results “reflect the challenge of catching up in an industry that is highly competitive and filled with top performers.” rice field.– CNBC Michael Bloom contributed to this report.Correction: Average analyst estimates compiled by Refinitiv. The company name was misspelled in previous versions.
https://www.cnbc.com/2023/05/31/advance-auto-parts-shares-plummet-after-dismal-q1.html Advance Autoparts stock plunges after first quarter disappointment