Advance Auto Parts to close stores, cut jobs amid sluggish demand
Nov 14 (Reuters) -Advance Auto Parts AAP.N said on Thursday it willclose about 500 stores by mid-2025 and cut some jobs undera restructuring effort, as demand for vehicle parts takes a hit from fewer consumers opting to repair their cars.
Shares of the auto parts retailerwere down about 4.7% in premarket trading after it also reported a surprise third-quarter adjusted loss of 4 cents per share.
Analysts on averagewere expecting a profit of 49 cents, according to data compiled by LSEG.
The automotive industry has had a difficult second half of the year, burdened by inflationary headwinds and stiff competition from Chinese automakers putting out affordable yet feature-packed vehicles.
Auto suppliers such as Aptiv PLC APTV.N and BorgWarner BWA.N cut theirannual sales forecastslast month on expectations of lower vehicle production as consumers cutback on purchases.
As part of its turnaround efforts, Advance Auto Parts announced plans to close 523 corporate stores, exit 204 independent locations, and shutter four distribution centers by mid-2025. The company aims to improve its adjusted operating income margin by over 500 basis points through fiscal 2027.
It expects to incur about $350 million to $750 million of total costs related to the restructuring.
Separately, the North Carolina-based company said it expects 2024 earningsfrom continuing operations of between a loss of 60 cents per share and breakeven, compared with estimates foran adjusted profit of $2.16 per share.
Reporting by Kannaki Deka in Bengaluru; Editing by Devika Syamnath
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