(Reuters) - Shares of U.S. auto parts retailers fell sharply on Wednesday after O'Reilly Automotive Inc (O:ORLY) said its same-store sales were much below the company's estimates for the second quarter, due to a mild winter and weak demand.
O'Reilly's stock plunged as much as 21.1 percent to a more than two-year low of $173.89, while also recording its biggest intraday percentage loss in more than five years.
The company — which will report second-quarter results on July 26 — said sales at stores open for at least 12 months rose only 1.7 percent, compared with its forecast of an increase of 3 percent to 5 percent.
Analysts on average were expecting O'Reilly's quarterly same-store sales to rise about 4 percent, according to Thomson Reuters I/B/E/S.
Weak demand likely reflected muted confidence from lower-end consumers — earning less than $50,000 annually — as they were left cash-constrained, partly due to rising healthcare, debt and housing costs, Wedbush analyst Seth Basham said.
These consumers are among the do-it-yourself (DIY) after-market auto parts industry's core customer group.
Confidence among minorities — such as Hispanics, a key group for DIY auto retailers — was sinking as they felt less confident, avoided leisure trips, and saved money for fear of being detained under the Trump administration's immigration policy, Basham said.
Rising competition from e-commerce players such as Amazon.com Inc (O:AMZN) may also have been one of the factors impacting O'Reilly's same store sales, analysts said.
O'Reilly's, which generated about 58 percent of its 2016 sales from DIY customers, said comparable store-sales shortfall would also have an impact on its operating profitability in the second quarter.
Shares of rivals Autozone Inc (N:AZO) and Advance Auto Parts Inc (N:AAP), which also cater to the DIY customers, also hit multi-year lows.
Advance Auto fell as much as 16.3 percent to a more than three-year low of $99.13, and Autozone as much as 10 percent to a more than two-year low of $514.47.