AAP - Why Shares in Advance Auto Parts Got Crushed This Week
2023-06-01 13:40:21 ET
Shares in automotive aftermarket retailer parts retailer Advance Auto Parts (NYSE: AAP) are down an incredible 38% in the week to midday on Thursday, according to data provided by S&P Global Market Intelligence . The move comes after a disappointing earnings release on Wednesday that led to a slump in the share price and a slew of analyst downgrades a day later.
The developments are significant. Not only did Advance report results below expectations, but management also cut its full-year guidance, and the board of directors slashed the quarterly dividend from $1.50 to $0.25. After reporting a 0.4% decrease in comparable-store sales in the first quarter, management now expects full-year compare store sales to be in the range of a 1% decline to flat in 2022, compared to prior guidance for growth of 1% to 3%.
An operating margin of 2.6% was "well below expectations," according to CEO Tom Greco. He put it down to "higher-than-planned investments to narrow competitive price gaps in the professional sales channel, as well as unfavorable product mix."
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Why Shares in Advance Auto Parts Got Crushed This Week