(Reuters) – Advance Auto Parts Inc on Wednesday lowered its full-year profit outlook due to high costs, sending shares of the auto parts retailer tumbling 24% before the opening bell.
High prices for raw materials, labor and freight, as well as ongoing supply chain constraints, have weighed on automotive industry production and distribution in recent months.
The company also cut its full-year sales forecast and its quarterly cash dividend.
“We expect the competitive momentum we faced in the first quarter to continue, resulting in a shortfall from our 2023 expectations,” chief executive Tom Greco said in a statement.
The Delaware-based vendor now expects to report net sales of between $11.2 billion and $11.3 billion for 2023, down from its previous forecast of $11.4 billion to $11.6 billion. of dollars.
The provider, which serves both professional installers and DIYers, cut its earnings per share forecast for the year to between $6 and $6.5, from $10.2 and $11.2.
Despite the price actions, the company added that supply headwinds and an unfavorable product mix dragged down its first-quarter earnings.
The company posted net income of $0.72 per share, down from the $2.26 reported last year.
The Delaware-based supplier reported net sales of $3.42 billion for the quarter ended April 23, up 1.3% from a year earlier.
The company said it lowered its quarterly cash dividend to provide greater financial flexibility and declared a dividend of $0.25 per share, down from the $1.50 per share announced in February.
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Maju Samuel)