Why Shares in Advance Auto Parts Slumped This Week
Auto parts retailer Advance Auto Parts (NYSE: AAP) shares declined nearly 18% in the week through Thursday afternoon. There are no prizes for guessing why: A disappointing set of third-quarter earnings released on Tuesday sent the stock crashing as investors ran for the exits.
The company's comparable same-store sales declined by 0.7% in the quarter ending on Oct. 8. It's a figure notably below what its peers reported in their most comparable quarters. For example, O'Reilly Automotive reported a 7.6% increase in its comparable-store sales in its quarter ending Sept. 30, and AutoZone's domestic same-store sales increased 6.2% in its quarter ended Aug. 27.
To be fair, part of the reason Advance Auto Parts' sales lagged behind its peers comes down to a conscious decision to increase sales of owned-brand products. They tend to carry lower prices (which reduces sales figures) but generate higher margins for the company.
Source Fool.com
