AAP - Why did Advance Auto Parts stock crash today? Dismal earnings and a large dividend cut rattled investors
2023-05-31 16:48:59 ET
Advance Auto Parts ( NYSE: AAP ) fell sharply on Wednesday after the auto retailer lowered guidance and reported a sales drop for Q1. The sales decline was noted to be 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. "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.
The financial pressure led AAP to cut its dividend dramatically. Of note, the Seeking Alpha Dividend Safety rating on Advance Auto Parts was flashing D+ well ahead of the large cut in the quarterly payout announced on Wednesday.
Shares of Advance Auto Parts ( AAP ) finished down 35.04% to close at a multi-year low of $72.89.
More on Advance Auto Parts
- Advance Auto Parts earnings wrapup
- Growth metrics on Advance Auto Parts
- Relative strength index and moving averages
- Seeking Alpha's Quant Rating for Advance Auto Parts
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Why did Advance Auto Parts stock crash today? Dismal earnings and a large dividend cut rattled investors