Advance Auto Parts Inc. (AAP) stock plummeted 5.07% in pre-market trading on Friday, November 15, 2024, following the release of its third-quarter 2024 earnings results. The company reported a disappointing financial performance, with net sales from continuing operations decreasing by 3% compared to Q3 last year, and adjusted operating income of just $16.7 million, or 0.8% of net sales.
A major factor contributing to the stock's decline was Advance Auto Parts' announcement of a strategic plan to close more than 500 Advance stores and exit relationships with over 200 independent locations. This decision was made after a comprehensive review of the company's asset productivity, with the goal of optimizing its store footprint and improving profitability.
The company cited several reasons for the store closures, including unprofitable locations, low distribution center productivity in certain markets, and the need to establish a stronger foundation for operational execution. Advance Auto Parts aims to focus on its strongest markets, where it will have the number one or two position based on store density.
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