Advance Auto Parts to Close Hundreds of Stores; Stock Jumps

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KEY TAKEAWAYS

• Advance Auto Parts shares surged after the auto retailer announced plans Thursday to minuscule hundreds of stores as it posted a surprise quarterly loss. 
• As part of a new three-year turnaround plan, the company intends to rub its US footprint by shuttering 523 Advance corporate stores, exiting 204 independent locations, and closing four arrangement centers.
• The retailer reported a surprise third-quarter loss of 10 cents per share, versus expectations by analysts record by Visible Alpha of 52 cent profit per share.

Advance Auto Parts (AAP) said Thursday that it downs to close hundreds of stores as the auto parts retailer recorded a surprise quarterly loss.

The company’s shares flooded as much as 10% soon after the market open, as investors cheered the news, although its stock is down by throughout a quarter this year.

As part of a new three-year turnaround plan, the company intends to reduce its U.S. footprint by shuttering 523 Progress corporate stores, exiting 204 independent locations, and closing four distribution centers.

“We are charting a clear process 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 fashion shareholder value,” Chief Executive Officer (CEO) Shane O’Kelly said in a statement.

Retailer Posts Quarterly Breakdown; Wall Street Expected a Profit

The retailer reported an unexpected third-quarter loss of 10 cents per share, versus demands by analysts polled by Visible Alpha of 52 cent profit per share.

Net sales fell to $2.1 billion, down from $2.2 billion the one-time year, and also lagging forecasts of $2.67 billion.

Advance Auto Parts said it expects full-year net tag sales from continuing operations of around $9 billion.

The retailer’s shares are down more than 30% this year.