Advance Auto Parts (AAP) Stock Tanks on Q1 Earnings, Revenue Miss
NEW YORK (TheStreet) -- Advance Auto Parts (AAP) - Get Report stock is plunging 12.14% to $126.60 in pre-market trading on Thursday after reporting 2016 first quarter earnings and revenue that fell short of analysts' estimates and announcing the departure of its CFO.
Before the market open, the auto parts supplier reported adjusted earnings of $2.51 per share, below analysts' estimates for $2.60 per share.
Revenue fell 1.9% year-over-year to $2.98 billion for the most recent period, missing analysts' estimates for $3 billion.
The decline in revenue was driven by a 1.9% decline in same-store sales due to availability and service shortfalls as well as lower demand given unfavorable weather, according to a company statement.
Gross margin narrowed to 45.3% from 45.9% a year ago, due primarily to the drop in comparable-store sales.
Additionally, the company announced that CFO Mike Norona will leave the company but remain in his current position until a successor has been named.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Advance Auto Parts' strengths such as its reasonable valuation levels, solid stock price performance, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: AAP
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
