Advance Auto Parts Tumbles On Weak Outlook, Margin Concerns

Core Insights - Advance Auto Parts Inc. reported second-quarter adjusted earnings per share of 69 cents, exceeding analysts' consensus estimate of 57 cents, with quarterly sales reaching $2.01 billion, surpassing the expected $1.978 billion [1] - Comparable store sales for the second quarter saw a slight increase of 0.1% [1] Analyst Ratings and Market Reaction - Following the results, Goldman Sachs analyst Kate McShane maintained a Sell rating on the company, with a price target of $43, anticipating a positive market reaction to the stronger-than-expected results but cautioning about a larger-than-expected reduction in fiscal year 2025 earnings per share guidance due to increased interest expenses [2] - The analyst will monitor trends for the current quarter and the company's outlook for the remainder of fiscal year 2025, focusing on the turnaround plan, tariff impacts, supply chain consolidation, inventory levels, pricing conditions, and the health of the DIY consumer [3] Risks and Opportunities - Upside risks include stronger-than-expected same-store sales growth, driven by gains in the DIFM segment and a rebound in DIY sales, as well as faster-than-anticipated expense reductions that could enhance margins [4] - AAP shares were trading lower by 9.16% to $55.95 at the last check on Thursday [4]