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Key Takeaways
- Advance Auto Parts predicted better-than-expected full-year profit, news that sent shares of the auto parts retailer higher.
- The company posted a surprise quarterly loss, but it cut costs and looked to have “greater discipline and accountability.”
- Shares of rival AutoZone hit an all-time high Tuesday after reporting earnings and revenue that exceeded forecasts.
Advance Auto Parts (AAP) posted a surprise fourth-quarter loss, but its earnings outlook sent shares higher on Wednesday.
The auto parts retailer reported a loss of $0.59, while analysts had anticipated a profit. Revenue fell 0.4% to $2.47 billion, basically in line with expectations. Same-store sales declined 1.4%. For 2023, revenue was up 1.2% to $11.29 billion, with same-store sales down 0.3%.
CEO Shane O’Kelly said full-year results were “below our expectations,” and the company is “focused on instilling greater discipline and accountability both in the fundamental business and in how the organization executes across the board.”
O’Kelly added that Advance Auto Parts slashed $150 million in annualized selling, general and administrative (SG&A) costs in the quarter, and recently launched an initiative to cut expenses “related to our indirect spend by an additional $50 million on an annual basis.”
The company predicts fiscal 2024 EPS in the range of $3.75 to $4.25, exceeding forecasts. However, its guidance for revenue of $11.3 billion to $11.4 billion was less than anticipated.
Advance Auto Parts became the second firm in the sector in as many days to please investors. Yesterday, shares of rival AutoZone (AZO) hit an all-time high after the company beat profit and sales forecasts.
Advance Auto Parts shares were up 6.6% at $68.95 at around 2:00 p.m. ET. Even with today’s gains, the company’s stock has lost more than half its value in the past year.