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Goldman Sachs lowered its price target from $54 to $49 while keeping a Sell rating on the stock. Barclays also trimmed its target to $50, bringing the average analyst target across all firms to $52. These moves follow a quarter where the company struggled to grow sales at existing stores. Analysts are cautious because the retailer is trying to fix its supply chain and boost profits at a time when its core customers are spending less on car repairs.
Source: Goldman Sachs
Advance Auto Parts reported profit of $1.03 per share, which was higher than the $0.81 analysts expected. However, revenue of $2.00 billion came in slightly lower than the $2.04 billion forecast. The stock fell about 15 percent as investors focused on a surprise decline in same-store sales, a measure of sales at locations open at least a year.
The results show a business in the middle of a difficult turnaround. While management is successfully cutting costs and reducing debt, they are doing so while customers are pulling back on spending. The professional repair shop business grew slightly, but it was not enough to offset weakness from everyday car owners who are doing fewer repairs themselves.
Source: 8-K filing
Management has cleared their own profit targets for seven straight quarters. This shows they have a firm handle on costs even while the business struggles to grow its actual sales.
| Expectation | |
|---|---|
| EPS | $0.83 |
| Revenue | $2.05B |
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