OAN Staff James Meyers
2:00 PM – Thursday, November 14, 2024
The automotive aftermarket parts provider Advance Auto Parts announced on Thursday that it will close more than 500 stores by mid-2025, while also cutting jobs in an effort to save money.
The company claims that demand for vehicle parts has gone down due to consumers not repairing their cars as much, sending its shares up 4.5% in afternoon trading.
The announcement comes as the auto industry has reportedly faced a difficult second half of the year as a whole, with rising inflation and tough competition from Chinese automakers.
Meanwhile, 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.
Advance Auto Parts said in a separate filing that it’s planning to close at least 523 corporate stores, exit 204 independent locations, and shutter four distribution centers by 2025.
The auto parts chain store also noted that it’s looking to improve its adjusted operating income margin by over 500 basis points through fiscal 2027, and that it expects to acquire close to $350 million to $750 million of total costs related to restructuring.
Additionally, in the third quarter, it reported an adjusted loss of 4 cents per share, compared to a loss of $1.19 a year ago. However, the company claimed that it expects 2024 earnings from continuing operations between a loss of 60 cents per share and breakeven.
At the start of 2024, Advance Auto Parts had 4,786 stores across the U.S.
Company representatives declined to provide a list of stores that would be part of the mass closings.
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