Advance Auto Parts Lowers Earnings Outlook, Shares Plunge
Divetiture-Driven Rally Reverses After Guidance Cut and Weak Earnings
Advance Auto Parts shares reversed their recent rally after the company cut its earnings outlook and reported weaker-than-expected earnings.
Missed Earnings Estimates
The company reported earnings per share of 75 cents, missing the Street view of $1.07.
Revenue came in at $2.4 billion, slightly above estimates of $2.39 billion.
Outlook Cut
Advance Auto Parts lowered its earnings outlook for the year to a range of $2 to $2.50 per share, down from a previous range of $2.25 to $2.75 per share.
Shares Plunge
Shares of Advance Auto Parts fell 6.35% in premarket trading on Thursday.
The company's shares are down over 21% in the past year.
Reasons for the Downturn
Analysts cited several reasons for the company's disappointing results and lowered outlook, including:
- A decline in same-store sales
- Rising costs
- Competition from online retailers
Analysts' Reactions
Analysts were disappointed with the company's results and lowered their ratings on the stock.
Some analysts cited the challenging retail environment as a factor in the company's struggles.
Conclusion
Advance Auto Parts is facing a number of challenges, including declining sales, rising costs, and competition from online retailers.
The company's lowered earnings outlook and weak earnings report have raised concerns among investors.
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