NEW YORK (TheStreet) -- Advance Auto Parts (AAP) hit the skids in late trades on Wednesday after the Roanoke, Va., seller of aftermarket car and truck parts came in short on first-quarter earnings and shaved the top end of its same-store sales view for the full year.
The company said it earned $109.6 million, or $1.35 a share, on sales of $1.89 billion for the three months ended April 23, missing the average estimate of analysts polled by Thomson Reuters for a profit of $1.38 a share in the period on sales of $1.92 billion.
Advance Auto notes the selling, general and administrative expenses as a percentage of overall sales swelled to 40.7% in the quarter from 39.8% in the same period a year earlier because of higher spending on advertising and the negative impact of a "modest" increase in same-store sales on store labor and fixed costs.
"With our soft start to the year we are now expecting our comp stores sales to grow in the low single digits for the year," said Mike Norona, the company's executive vice president and chief financial officer, adding that Advance Auto has "adjusted" its cost structure and slowed the pace of its strategic initiatives because of the first-quarter performance.The company had previously forecast a same-store sales increase in the low to mid-single digits for the year on Feb. 9. Advance Auto still expects, however, to meet its outlook for earnings of $4.60 to $4.80 a share for the full year. The stock was last quoted at $65.30, down 7.6%, on volume of around 250,000, according to Nasdaq.com. Based on a regular session close at $70.66, the shares were up more than 50% in the past year, including a gain of 5.4% since the start of 2011, although it's pulled back slightly since hitting a 52-week high of $75.32 on May 13. Wall Street had toned down its optimism on Advance Auto ahead of the report, given the strong run-up in the stock, and 14 of the 20 analysts covering the shares at either hold (12) or underperform (2).
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