Advance Auto Parts(US:AAP) The Motley Fool·2025-02-26 19:52Core Viewpoint - Advance Auto Parts reported disappointing financial results for Q4 2024 and provided weak guidance for 2025, leading to a significant drop in stock price by 16% [1] Financial Performance - For the full year 2024, Advance Auto Parts achieved net sales of $9.1 billion, slightly exceeding management's guidance [2] - The company expects net sales to decline to between $8.4 billion and $8.6 billion in 2025 due to ongoing store closures [3] Capital Expenditures and Cash Flow - Advance Auto Parts forecasts capital expenditures of $300 million for 2025, anticipating negative full-year free cash flow ranging from $25 million to $85 million [3] Business Turnaround Efforts - The company is in the early stages of a multi-year turnaround, involving the sale of noncore assets, closure of underperforming stores, and supply chain reconfiguration [2][4] - New management has been tasked with improving profit margins, which have lagged behind competitors due to an inefficient supply chain [4] Future Outlook - Advance Auto Parts aims for net sales of $9 billion and an adjusted operating margin of 7% by 2027, which would result in adjusted operating income exceeding $600 million [5] - The current market value of Advance Auto Parts is below $2.3 billion, indicating potential for growth if turnaround efforts succeed [5]