Advance Auto Parts Stock Plummets on Weak Earnings
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Advance Auto Parts (AAP) shares cratered nearly 16% in early trading Thursday after reporting disappointing Q2 results, before paring losses to 9.5%. While the company beat adjusted EPS estimates ($0.69 vs $0.58 expected), GAAP earnings told a different story - plunging 50% year-over-year to just $0.25 per share.
The automotive retailer's troubles ran deeper than bottom-line misses. Revenue fell 9% annually despite edging past forecasts, while operating margin collapsed to 1.1% from prior levels. Most alarming was the $201 million free cash outflow, quadruple last year's burn rate. "These numbers were objectively terrible," analysts noted, contrasting sharply with management's characterization of "solid" performance.
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