AAP - Auto retail stocks drop after Advance Auto Parts earnings misfire
2023-05-31 09:10:58 ET
The broad auto retail sector was rattled on Wednesday after Advance Auto Parts ( NYSE: AAP ) lowered its full-year guidance and cut the quarterly dividend payout.
"We expect the competitive dynamics we faced in the first quarter to continue, resulting in a shortfall to our 2023 expectations," warned CEO Tom Greco.
Advance Auto Parts ( AAP ) reported net sales decreased 162 basis points compared to a year ago. The decline was primarily driven by inflationary product costs that were not fully covered by pricing actions. In addition, unfavorable product mix and supply chain headwinds also contributed to gross margin deleverage in the quarter. Operating income came in at 2.6% of sales vs. 6.0% a year ago amid the sales and cost headwinds.
Looking ahead, Advance Auto Parts ( AAP ) now sees comparable sales of -1% to 0% vs. a prior expectation for +1% to +3%. The retailer also slashed its estimate of store openings to 40 to 60 from 60 to 80.
Within the auto retail sector, AutoZone ( AZO ) was down 6.38% in premarket trading and CarMax ( KMX ) was off 2.66% . O'Reilly Automotive ( ORLY ) dropped 5.27% , Sonic Automotive ( SAH ) fell 2.22% , and AutoNation ( AM ) shed 2.55% . Advance Auto Parts ( AAP ) was down 29.15% at 9:10 a.m. and is likely to open at a new 52-week low.
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Auto retail stocks drop after Advance Auto Parts earnings misfire