Advance Auto Parts, Inc. (NYSE:AAP) posted lower second-quarter profits and warned things will be even tougher over the second half of the year.
The Raleigh-based auto parts supplier lifted sales by 0.8% to US$ 2.7 billion in the three months to June, but profits dipped 3% to US$1.1 billion as higher product and staff costs outstripped price rises.
An operational and strategic review is underway to address these issues, said the statement.
Sales improved in the last few weeks of the quarter and will be up for the full year, the company added, but margins will be lower as will annual earnings and free cash flow.
“This reflects additional headwinds anticipated in the back half of the year driven by our ongoing commitment to maintain competitive price targets, impacts from a shift in channel mix and investments in our team to help retain top talent,” said the statement.
Separately, AAP announced Shane O’Kelly, from Home Depot, will be its new chief executive from September 11 to replace Tom Greco who is retiring.
Shares were up 2.2% to US$68.85 in pre-market trading.