Shares of Advance Auto Parts (AAP) surged 6.51% in Thursday's trading session following the release of its better-than-expected third-quarter results. The automotive parts retailer reported adjusted earnings of $0.92 per share, significantly beating Wall Street's expectations of $0.76 per share and marking a substantial improvement from the $0.05 loss per share in the same quarter last year.
The company's strong performance was underpinned by a 3% increase in same-store sales, outpacing analysts' projections of 2.3% growth. Despite a 5.2% year-over-year decline in net sales to $2.04 billion, the figure still marginally exceeded the consensus estimate of $2.03 billion. Advance Auto Parts also saw an improvement in its adjusted gross profit margin, which rose to 44.8% from 42.3% a year ago.
Adding to investor optimism, the company narrowed its full-year 2025 guidance, now expecting adjusted earnings per share between $1.75 and $1.85, up from the previous range of $1.20 to $2.20. CEO Shane O'Kelly expressed confidence in the company's turnaround efforts, stating, "We delivered our strongest quarterly performance in over two years." However, he also noted ongoing challenges, including the impact of inflation on consumer behavior and potential supply chain disruptions in the auto parts industry.
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