Auto-parts retailer Advance Auto Parts has revised its full-year profit forecast due to rising costs. The company now expects to earn between $4.50 and $5.10 per share for the year, compared to the previous forecast of $6.00 to $6.50 per share. This adjustment also resulted in a reduction in the outlook for free cash flow and operating income margin.
However, Advance Auto Parts has increased its sales outlook for the year, with a new range of $11.25 billion to $11.35 billion, up from $11.2 billion to $11.3 billion. The company also expects comparable-store sales to be slightly lower or higher within a range of 0.5%. This is an improvement from the previous guidance, which projected a decline of up to 1% or flat sales.
Interim Chief Financial Officer Tony Iskander explained that these adjustments are a response to anticipated challenges in the second half of the year, which include maintaining competitive pricing, changes in distribution channels, and investments in talent retention.
Despite the revised profit outlook, shares of Advance Auto Parts rose by 4% to $70.10 in premarket trading.