Advance Auto stock plunges 35% after forecast, dividend cut

By Caroline Valetkevitch

NEW YORK (Reuters) - Advance Auto Parts Inc's stock slid by more than one-third on Wednesday in its biggest daily percentage drop since the company went public in 2001 and led a sell-off in other auto parts retailers after the company cut its dividend and full-year forecast.

Advance Auto's shares closed down 35.0% at $72.89, and hit their lowest level since March 2020.

Shares of Genuine Parts Co fell 5.6%, while Autozone eased 2.8% and O'Reilly Automotive slipped 2.7%.

The company cited elevated raw material, labor and freight costs as it reported results, and slashed its quarterly dividend to 25 cents from $1.50 previously.

Its lowered forecast follows a recent disappointing outlook from Foot Locker Inc and underscores weakness in some areas of retail this earnings season.

"In a tough earnings season, (Advance Auto) saved perhaps the worst for last, with as big a miss and cut as we can remember," D.A. Davidson analysts wrote in a research note.

Trading volume on Wednesday in Advance Auto was more than 20 million shares, about 20 times the stock's 25-day moving average and the busiest trading session on record, per Refinitiv data.

Including the session's move, Advance Auto shares are down about 50% for the year to date.

The current average Wall Street recommendation on the stock is a "hold" and the median price target is $141, according to Refinitiv data.

(Reporting by Caroline Valetkevitch in New York; Editing by Lance Tupper and Matthew Lewis)

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