Advance Auto Parts Stock Plummets 17% After Disappointing Q2 Results and Guidance Cut
Advance Auto Parts (NYSE:) faced a sharp decline in its stock price, dropping 17% following the release of its second-quarter 2024 results and full-year 2024 guidance. The company’s downward revisions in net sales, earnings, and comparable store sales growth outlooks were major contributors to the stock’s tumble.
The revised guidance now forecasts net sales of $11.15 billion to $11.25 billion, down from the previous range of $11.3 billion to $11.4 billion. Earnings guidance was also slashed from $3.75 to $4.25 per share to just $2 to $2.50 per share. Additionally, the 2024 comparable store sales outlook was adjusted to a range of flat to down 1% year over year.
The second-quarter results were mixed, with net sales of $2.683 billion, almost unchanged from the previous year. However, free cash flow saw an improvement, with an outflow of $4.6 million compared to $312 million in the same quarter of 2023. Despite reporting a 0.4% growth in comparable store sales, the company’s overall outlook remains subdued.
Advance Auto Parts also announced the sale of its Worldpac unit to Carlyle Group for $1.5 billion, with expected net proceeds of around $1.2 billion after taxes and fees. This strategic move might signal a shift in focus towards the company’s retail automotive parts stores.
Investors should keep an eye on any further changes prompted by shareholder activists and monitor Advance Auto Parts’ performance against its revised guidance. Failure to meet these targets could result in further declines in the company’s stock price.
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