By (Reuters) -Advance Auto Parts said on Thursday it will close about 500 stores by mid-2025 and cut some jobs as demand for vehicle parts takes a hit from fewer consumers opting to repair their cars, sending its shares up 4.5% in afternoon trading.
The automotive industry has had a difficult second half of the year, burdened by inflation and competition from Chinese automakers putting out affordable yet feature-packed vehicles.
Auto suppliers such as Aptiv (NYSE:APTV) and BorgWarner (NYSE:BWA) cut their annual sales forecasts last month on expectations of lower vehicle production as consumers cut back purchases.
On a post-earnings call with analysts, Advance Auto Parts (NYSE:AAP) executives told analysts its quarterly results were impacted by lower consumer spending, hurricanes and the CrowdStrike (NASDAQ:CRWD) 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.