Advance Auto Parts said Thursday it will close about 500 stores by mid-2025 under a restructuring plan, as demand for auto parts has been hit by fewer consumers choosing to repair their cars. announced that it would reduce its workforce.
The auto parts retailer's stock rose about 2% even though it also reported a surprise third-quarter loss of 4 cents per adjusted share.
Analysts on average had expected a profit of 49 cents, according to data compiled by LSEG.
The auto industry had a difficult second half of the year, hit by inflationary headwinds and intense competition from Chinese automakers who are launching affordable yet feature-packed cars.
Auto suppliers including Aptiv and BorgWarner last month cut their annual sales forecasts, predicting a decline in vehicle production as consumers hold back on purchases.
As part of its turnaround, Advance Auto Parts announced plans to close 523 corporate stores, exit 204 independent stores and close four distribution centers by mid-2025.
The company aims to improve its adjusted operating margin by more than 500 basis points by fiscal 2027.
Total costs related to the restructuring are expected to be approximately $350 million to $750 million.
Separately, the North Carolina-based company expects 2024 continuing operations earnings to breakeven from a loss of 60 cents per share, compared with an adjusted profit of 1 share. It is expected that the price will be $2.16 per share.
