Advance Auto Parts (AAP) Stock Sputters on Q3 Data and Outlook, CEO to Retire

Advance Auto Parts (AAP) shares are tumbling after the retailer of automotive replacement parts reported lower-than-expected third quarter earnings and slashed its full-year earnings forecast.
By U-Jin Lee ,

NEW YORK (TheStreet) --Advance Auto Parts (AAP) - Get Report  shares are tumbling 10.62% to $174 in pre-market trading on Thursday after the retailer of automotive replacement parts earlier this morning reported lower-than-expected third quarter earnings and slashed its full-year earnings forecast.

For the latest quarter, the Roanoke, VA-based company reported a profit of $1.95 a share, under analysts' projections of $2.09 a share.

Sales came in at $2.3 billion, but were below estimates of $2.33 billion.

In the same period a year ago, the company earned $1.89 a share on sales of $2.29 billion.

Even though comparable store sales grew year-over-year to 0.5% and profits rose 3.2%, the financial results for the recent quarter were negatively impacted by headwinds due to foreign exchange.

Due to these challenges, the company reduced its full-year earnings outlook to between the range of $7.75 to $7.90 a share, below its previous forecast of $8.10 to $8.30 a share.

"We remain focused on structurally improving our business and progressing through our integration milestones to position the company for long term growth," CEO Darren R. Jackson stated.

In the latter part of 2015, the company said it plans to close 30 stores.

Along with these results, the company announced that CEO Jackson will retire on January 2 and President George Sherman will step in as the interim CEO effective January 3.

And, current Board Chairman John C. Brouillard will be executive chairman effective immediately, the company added. 

Separately, TheStreet Ratings team rates ADVANCE AUTO PARTS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

We rate ADVANCE AUTO PARTS INC (AAP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

You can view the full analysis from the report here: AAP

AAP

data by

YCharts

Loading ...