Advance Auto Parts (AAP) said Thursday that it plans to close hundreds of stores as the auto parts retailer recorded a surprise quarterly loss.
The company's shares surged as much as 10% soon after the market open, as investors cheered the news, although its stock is down by over a quarter this year.
As part of a new three-year turnaround plan, the company intends to reduce its U.S. footprint by shuttering 523 Advance corporate stores, exiting 204 independent locations, and closing four distribution centers.
“We are charting a clear path forward and introducing a new three-year financial plan, with a focus on executing core retail fundamentals to improve the productivity of all our assets and to create shareholder value," Chief Executive Officer (CEO) Shane O’Kelly said in a statement.
The retailer reported an unexpected third-quarter loss of 10 cents per share, versus expectations by analysts polled by Visible Alpha of 52 cent profit per share.
Net sales fell to $2.1 billion, down from $2.2 billion the prior year, and also lagging forecasts of $2.67 billion.
Advance Auto Parts said it expects full-year net sales from continuing operations of around $9 billion.
The retailer's shares are down more than 30% this year.
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