Shares of Advance Auto Parts (NYSE:AAP) fell nearly 5% in early trading Wednesday after posting mixed third quarter results, lowering its FY guidance, announcing a new CFO, and initiating separate sale processes for Worldpac and Canadian businesses.
Third quarter net sales rose 2.9% to $2.7 billion, which modestly beat the consensus of $2.68 billion. Comparable store sales increased by 1.2%. The company reported a loss of ($0.86) per share, versus the consensus of $1.44.
The company lowered the top end of its next sales guidance for the year and its EPS guidance. They now see net sales of $11.25-$11.3 billion, versus the prior of $11.25-$11.35 billion. They see comparable store sales of (0.5%)-0.%, versus its prior outlook for (0.5%)-0.5%. For EPS, they see $1.40-$1.80, versus its prior outlook of $4.50-$5.10.
Tony Iskander, interim chief financial officer, said, “Based on our year-to-date results and current business trends, we are adjusting our previously provided full year outlook ranges. Our updates include the impact of non-recurring expenses in Q3 as well as continued pressure in Q4 from higher product costs that we do not expect to offset with price. We are taking significant steps to improve our cost structure and remain focused on returning the business to profitable growth.”
In addition, Advance Auto Parts said it is initiating separate sale processes for Worldpac as well as its Canadian business.
Worldpac, a premier distributor in the automotive industry, specializes in providing original equipment and aftermarket parts for a wide range of vehicle makes and models. Renowned for its cutting-edge technology, extensive catalog, diverse product brands, and top-notch training programs, Worldpac stands out in its field. In Canada, the company primarily caters to commercial clients and operates under the Carquest brand.
The company has engaged Centerview Partners to assist in the sale processes.
The company also announced the appointment of Ryan Grimsland as executive vice president and chief financial officer, effective November 27, 2023. Tony Iskander, who has served as interim chief financial officer since August 2023 will continue in his role as senior vice president, finance and treasurer.