AAP - Why Advance Auto Parts Stock Got Absolutely Smashed Today
2023-05-31 10:53:12 ET
Shares of auto parts retail chain Advance Auto Parts (NYSE: AAP) got absolutely smashed on Wednesday after the company's latest quarterly financial results underwhelmed expectations and led to a massive cut to its quarterly dividend. As of 10:15 a.m. ET, Advance stock is down 32%, and the stock now has negative returns over the past decade.
Things didn't look so bad for Advance on the top line. In its fiscal first quarter of 2023, which ended April 22, the company had net sales of $3.4 billion, up 1.3%. While this was meager growth, management hadn't guided for much growth in the first place. So this number was fine.
The problem for Advance is profitability. Management had guided for operating margin improvements in 2023. But in Q1, the company's operating margin shrank to 2.6%, whereas it had had an operating margin of 6% in the prior-year period.
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Why Advance Auto Parts Stock Got Absolutely Smashed Today