Advance Auto Parts shares plummet after dismal results, cuts to outlook and dividend

Shares of Advance Auto Parts plummeted astir 30% during premarket trading Wednesday aft the company's first-quarter net importantly missed Wall Street's expectations and executives slashed the retailer's yearly guidance and quarterly dividend.

The Raleigh-based car parts supplier blamed its dismal first-quarter results and bleaker outlook connected higher-than-expected costs for its nonrecreational sales, inflationary pressure, proviso concatenation problems and lower, unfavorable merchandise mix.

The company's net per stock for the play came successful astatine conscionable 72 cents, compared with an expected $2.57 per share, according to mean expert estimates compiled by Refintiv. Its quarterly gross of $3.42 cardinal somewhat missed expectations of $3.43 billion.

"We expect the competitory dynamics we faced successful the archetypal 4th to continue, resulting successful a shortfall to our 2023 expectations. We person reduced our full-year guidance and our committee of directors made the hard determination to trim our quarterly dividend," CEO Tom Greco said successful a statement.

On Tuesday, the institution declared a dividend of 25 cents per stock to beryllium paid retired successful July. In its prior-quarter net release, Advance Auto Parts declared a dividend of $1.50 per share.

Advance Auto Parts besides chopped its full-year nett outlook and present expects net per stock of betwixt $6 and $6.50, down from a antecedently stated scope of $10.20 to $11.20. That's contempt lowering its nett income expectations by a scope of conscionable $200 cardinal to $300 million, signaling operational problems with margins.

For the archetypal quarter, the company's nett income roseate 1.3% to $3.4 cardinal compared to a twelvemonth ago. Its gross nett declined by 2.4% to $1.5 billion.

Net income for the play was $42.7 million, oregon 72 cents per share, down from $139.8 million, or, $2.28 per share, a twelvemonth earlier.

"While we anticipated the archetypal 4th would beryllium challenging, our results were beneath our expectations," Greco said.

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