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Advance Auto Parts stock down 9% after mixed third-quarter earnings – News Opener

Shares of Advance Auto Parts Inc. dropped more than 9% in the extended session Tuesday after the specialty retailer missed Wall Street expectations for its quarterly earnings as it sold more of its cheaper in-house brands than national brands.

Advance Auto Parts
AAP,
+0.09%

earned $111 million, or $1.84 a share, in the third quarter, compared with $170 million, or $2.68 a share, in the year-ago quarter. Adjusted for one-time items, the retailer earned $2.84 a share.

Sales rose 0.8% to $2.6 billion. Same-store sales fell 0.7%. That was due to increased penetration of owned brands, which have a lower price point than national brands, the company said.

Analysts polled by FactSet expected adjusted earnings of $3.32 a share on sales of $2.65 billion.

“Our industry has proven to be resilient, and the fundamental drivers of demand remain positive,” Chief Executive Tom Greco said in a statement. “While we continue to execute against our long-term strategic plan, we’re not satisfied with our relative topline performance versus the industry this year and are taking measured, deliberate actions to accelerate growth.”

Advance Auto Parts kept its sales outlook for the year intact, calling for sales between $11 billion and $11.2 billion. It cut its expectations for adjusted EPS, however, to between $12.60 and $12.80, from a previous outlook of adjusted EPS between $12.75 and $13.25.

That’s to account for a stronger dollar, the company said. The retailer also cut its cash-flow guidance as it works to make “strategic inventory investments,” an “important step to accelerate growth in 2023,” it said.

Shares of Advance Auto Parts have lost 23% so far this year, compared with losses of around 16% for the S&P 500 index
SPX,
+0.87%
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