Shares of Advance Auto Parts (AAP) plunged 33% on Wednesday after the company cut its full-year guidance and cut its dividend.
The auto parts retailer posted first-quarter adjusted earnings per share of 72 cents, largely missing Wall Street consensus estimates of $2.65
“Although we anticipated the first quarter to be challenging, our results were below our expectations,” Tom Greco, CEO of Advance Auto Parts, said in the company’s earnings release.
“We expect the competitive momentum we faced in the first quarter to continue, resulting in a shortfall against our 2023 expectations. We have reduced our full-year guidance and our Board of Directors has taken the difficult decision to cut our quarterly dividend.”
Advance Auto Parts declared a dividend of 25 cents per share, down from its previous $1.50.
The company expects its free cash flow for the full year to be between $200 million and $300 million, down from its previous guidance of $400 million.
The auto parts retailer also cut its target for full-year store openings to between 40 and 60, down from a previous expectation of 60 to 80.
Shares of peers O’Reilly Automotive (ORLY), AutoZone (AZO) and CarMax (KMX) were all trading down around 3% on Wednesday.
Ines is a senior economics reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre