Advanced Auto Parts weaker after earnings miss
Resource from: CNBC Likes:251
May 20,2016
Advance Auto Parts shares were lower Thursday after the company missed earnings forecasts, lowered its guidance, and said its Chief Financial Officer would be leaving.
The stock recovered some of those losses and ended the day down just 0.19 percent.
The auto parts retailer's earnings of $2.51 per share were 9 cents short of estimates, and revenue also missed targets. Comparable store sales fell nearly 2 percent in the quarter, well below analysts' average estimate for a 0.3 percent decline.
Advanced Auto pointed to "availability (of auto parts), service shortfalls.....and lower demand due to unfavorable weather during the quarter" for the same-store sales miss. The company now expects same-store sales to decline by 3 to 5 percent in its current fiscal year, revised from a previous forecast for a gain in the low single digits.
The company said its performance did not meet its own expectations, and that it is moving to improve with "urgency."
Separately, Advance Auto announced that Chief Financial Officer Mike Norona is leaving the company, and that a search is underway for his successor.
The company has been under pressure from activist investor Starboard Value. In September, The Wall Street Journal reported Starboard built a 3.7 percent stake in Advanced Auto, pushing the company to improve its bottom line. After the release of the company's quarterly results on Wednesday, Advance Auto named Starboard Value Chief Executive Officer Jeffrey Smith as its new chairman.
Advanced Auto skidded 6 percent at the open, but was trading down just 1 percent in the afternoon session. In a note to investors, analysts at Stern Agee said: "We expect a negative reaction from shares given the sizable miss and significant guidance reduction. We remain on the sidelines until there is better visibility into improving comp and margin trends."
Advance Auto's stock selloff also hurt rival's shares AutoZone, O'Reilly Automotive, and Genuine Parts Co.
The stock fell the most in 6 months, and lead S&P 500 laggards in early trading Thursday.
(CNBC)
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