Advance Auto Parts, Inc. (NYSE:AAP) posted disappointing second quarter earnings this morning, as weak same-store sales growth and smaller margins weighed on results.
The Roanoke, VA-based company reported second quarter adjusted net income of $1.90 per share, a 16% drop from the year-ago period. Analysts expected a much higher profit of $2.12 a share.
Revenue fell 4.8% from last year to $2.26 billion, which was in-line with estimates.
Other notes from the report included:
- Same-store sales fell 4.1% from last year.
- Gross margin fell to 44.8% from 45.9% a year ago.
- Operating income rate fell to 9.6% from 10.8% last year.
- Total store count through 1H16 fell 1.9% to 5,192.
From the press release:
“Our second quarter results were not acceptable and we are moving thoughtfully and swiftly to make the necessary changes across a number of critical areas within the organization to alter the trajectory of the business and improve our operating performance,” said Tom Greco, Chief Executive Officer. “There’s a heightened sense of urgency and accountability throughout the organization and we are taking decisive actions to deliver near-term improvement with a focus on accelerating our commercial growth and improving our execution.”
Greco continued, “I continue to be energized by the immense opportunity for improvement. The actions we need to take are well within our control and we are focused on building the right foundation for the long term. We are hard at work constructing a comprehensive strategic plan, which will help us reliably and consistently deliver industry leading performance and unparalleled customer service going forward. We remain confident in our business, our people and the opportunity that lies ahead to create long-term value.”
Advance Auto Parts shares fell $4.26 (-2.54%) to $163.50 in premarket trading Tuesday. AAP shares had gained 11.46% year-to-date prior to today’s report.
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