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Advance Auto stock plunges 35% after forecast, dividend cut

NEW YORK : Advance Auto Parts Inc's stock slid by more than one-third on Wednesday in its biggest daily percentage drop since the company went public in 2001 and led a sell-off in other auto parts retailers after the company cut its dividend and full-year forecast.

Advance Auto's shares closed down 35.0 per cent at $72.89, and hit their lowest level since March 2020.

Shares of Genuine Parts Co fell 5.6 per cent, while Autozone eased 2.8 per cent and O'Reilly Automotive slipped 2.7 per cent.

The company cited elevated raw material, labor and freight costs as it reported results, and slashed its quarterly dividend to 25 cents from $1.50 previously.

Its lowered forecast follows a recent disappointing outlook from Foot Locker Inc and underscores weakness in some areas of retail this earnings season.

"In a tough earnings season, (Advance Auto) saved perhaps the worst for last, with as big a miss and cut as we can remember," D.A. Davidson analysts wrote in a research note.

Trading volume on Wednesday in Advance Auto was more than 20 million shares, about 20 times the stock's 25-day moving average and the busiest trading session on record, per Refinitiv data.

Including the session's move, Advance Auto shares are down about 50 per cent for the year to date.

The current average Wall Street recommendation on the stock is a "hold" and the median price target is $141, according to Refinitiv data.

Source: Reuters

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