Advance Auto Parts (AAP) closed down a whopping 35% on Wednesday after the company cut its full-year guidance and slashed its dividend.
The automobile parts retailer posted first quarter adjusted earnings per share of $0.72, widely missing Wall Street consensus estimates of $2.65. The company also posted top-line revenue of $3.4 billion, missing Street estimates of around $3.4 billion.
"While we anticipated the first quarter would be challenging, our results were below our expectations," Advance Auto Parts CEO Tom Greco said in the company's earnings release. "We expect the competitive dynamics we faced in the first quarter to continue, resulting in a shortfall to our 2023 expectations. We have reduced our full-year guidance and our board of directors made the difficult decision to reduce our quarterly dividend."
The company now sees its FY 2023 EPS forecast in a range of $6.00-$6.50, down from its prior forecast of $10.20-$11.20, representing a 40% cut in its outlook.
Advance Auto Parts also reduced its quarterly dividend to $0.25 per share, down from its prior $1.50, which the company says will "provide enhanced financial flexibility."
The company also expects its full-year free cash flow to come in between $200 million to $300 million, down from its previous forecast of $400 million. The auto parts retailer also trimmed its full-year store openings target to between 40 and 60 versus a previous expectation of 60 to 80.
Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre