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Advance Auto Parts said Thursday it will close about 500 stores by mid-2025 and cut some jobs under a restructuring effort, as demand for vehicle parts takes a hit from fewer consumers opting to repair their cars.
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 and BorgWarner cut their annual sales forecasts last month on expectations of lower vehicle production as consumers cut back on purchases.
On a post-earnings call with analysts, Advance Auto Parts executives told analysts its quarterly results were impacted by lower consumer spending, hurricanes and the CrowdStrike outage.
Separately, the company in a regulatory filing said it was planning to close 523 corporate stores, exit 204 independent locations and shutter four distribution centers by mid-2025.
It also flagged headcount reductions, but did not provide any further details. Advanced Auto Parts did not immediately respond to a Reuters request for comment.
The company said it aims to improve its adjusted operating income margin by over 500 basis points through fiscal 2027 and expects to incur about $350 million to $750 million of total costs related to the restructuring.
During the third quarter, it reported an adjusted loss of 4 cents per share, compared to a loss of $1.19 a year ago.
Separately, the North Carolina-based company said it expects 2024 earnings from continuing operations of between a loss of 60 cents per share and breakeven.
Advance Auto shares gave up early gains and closed at $41.20, up 0.6%. The stock has fallen 32% this year.
