Advance Auto Falls After Profit Misses Analysts’ Estimatesby
Advance Auto Parts Inc. fell the most in six months after posting first-quarter profit that trailed analysts’ estimates and slashing its forecast for the year, citing problems with its service and supply chain.
Profit was $2.51 a share, excluding some items, in the quarter through April 23, the Roanoke, Virginia-based company said Thursday in a statement. Analysts projected $2.60, on average. Same-store sales dropped 1.9 percent, worse than analysts’ average estimate of a 0.3 percent decline.
Advance Auto, which has been under pressure from activist investor Starboard Value, attributed the same-store sales decrease to “service shortfalls” and the availability of parts. Revenue by that measure will tumble 3 percent to 5 percent this year, the company said Thursday, compared with an earlier forecast for a mid-single-digit percentage gain.
“Our customers are our top priority and we are elevating our intensity to get the right parts to the right place at the right time as we empower our team members to serve the customer better than anyone else,” Chief Executive Officer Tom Greco said in the statement.
The shares tumbled as much as 7.5 percent to $132.98 in New York, the biggest intraday decline since Nov. 12. Advance Auto already had slid 4.5 percent this year through Wednesday.
The company also said Chief Financial Officer Mike Norona is leaving the company. He’ll stay in the role until a successor is named. On Wednesday, Advance Auto named Starboard CEO Jeffrey Smith as its new chairman.