Advance Auto Parts closing hundreds of locations following sluggish performance
Advance Auto Parts plans to close over 700 locations as part of a financial restructuring
FOX Business Flash top headlines for November 14
Check out what's clicking on FoxBusiness.com.
Advance Auto Parts on Thursday announced that it is planning to close more than 700 locations in the U.S. as it looks to improve its financial performance amid sluggish consumer demand.
The company announced it plans to close 523 corporate stores as well as 204 independently-owned locations and four distribution centers by the middle of 2025. It also flagged that it will reduce its headcount, but didn't provide details.
That news comes as it revealed its quarterly earnings on Thursday, which showed that Advance's comparable store sales decreased by 2.3% in the third quarter and faces rising expenses "due to wage investments in frontline team members that were partially offset by a reduction in marketing expenses."
Advance Auto Parts is aiming to boost its operating income margin by over 500 basis points through fiscal 2027 and expects to incur between $350 million and $750 million in total costs related to the restructuring.
TESLA ISSUES SIXTH RECALL THIS YEAR FOR CYBERTRUCKS
Advance Auto Parts plans to close more than 700 locations, including a mix of corporate and independently-owned stores. (Tierney L. Cross/Getty Images / Getty Images)
In the third quarter, Advance reported an adjusted loss of 4 cents per share — down from a loss of $1.19 a year ago. For the full 2024 year, it said it expects earnings to be between a loss of 60 cents per share and breakeven.
Advance Auto Parts completed the sale of auto parts wholesaler Worldpac on Nov. 1 for $1.5 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAP | ADVANCE AUTO PARTS INC. | 41.35 | -3.09 | -6.95% |
US REGULATORS PLACE 1.4M HONDA VEHICLES UNDER INVESTIGATION FOLLOWING CONCERNS OF ENGINE FAILURE
"We are pleased to have made progress on our strategic actions, including the completion of the sale of Worldpac and a comprehensive operational productivity review of our business," said CEO Shane O'Kelly in a statement.
"We are charting a clear path forward and introducing a new three-year financial plan, with a focus on executing core retail fundamentals to improve the productivity of all our assets and to create shareholder value," he added.
Advance Auto Parts' stock is down over 28% over the past year and more than 32% in 2024 to date, though it rose about 2% during Thursday's trading on the news.
Advance Auto Parts hasn't yet specified which locations it plans to close. (Jeffrey Greenberg/Education Images/Universal Images Group via Getty Images / Getty Images)
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Reuters contributed to this report.