Although Advance Auto Parts (NYSE:AAP) reported weaker-than-expected profit figures for its second quarter and slashed its full-year outlook on this front, the stock still traded over 6% higher in early Wednesday trade.
This is because the company has also announced the initiation of an extensive operational and strategic review, as well as named Shane O'Kelly as its new president and chief executive officer.
For Q2, the company reported EPS of $1.43, falling short of the analyst estimate of $1.70 by $0.27. The revenue for the quarter amounted to $2.69 billion, exceeding the consensus estimate of $2.66B.
“Profitability in the quarter was below expectations, primarily related to our inability to price to cover inflation. However, we began to see early signs that the strategic investments we are making are beginning to drive an improvement in topline sales and transactions. This is evidenced by positive comparable store sales growth in the final four weeks of the second quarter, which has continued into the third quarter,” Tom Greco, president and chief executive officer, said.
Looking ahead, AAP anticipates EPS in the range of $4.50 to $5.10, which is a decrease from the previous range of $6.00 to $6.50. This new projection contrasts with the consensus estimate of $5.85.
Additionally, the company foresees FY2023 revenue ranging from $11.25B-$11.35B, up from the prior outlook of $11.2B-$11.3B, and slightly ahead of the consensus estimate of $11.22B.
In a separate statement, AAP said Mr. O’Kelly will succeed Tom Greco, who has served as president and CEO since April 2016. Mr. Greco announced his planned retirement in February 2023 and will stay on as an advisor to ensure a seamless transition.
“As we undertake an operational and strategic review of the business, I look forward to working alongside the entire Advance team and our board of directors to drive growth, operational excellence and value for all stakeholders,” O’Kelly said in a press release.
The company also announced today that Tony Iskander has been named interim chief financial officer.