In an unexpected turn of events, Advance Auto Parts experienced a loss in the third quarter despite an increase in sales. The aftermarket car-parts retailer recorded a loss of $48.6 million for the three months ending October 7, compared to a profit of $115.9 million during the same period last year.
Earnings per share for the quarter were reported at a loss of 82 cents, down from $1.92 per share in the prior year. Analysts surveyed by FactSet had anticipated earnings of $1.44 per share.
Despite the loss, sales saw a growth of 2.9%, reaching $2.72 billion, exceeding analyst expectations of $2.68 billion as reported by FactSet. Comparable sales, after adjusting for store openings and closings, increased by 1.2%. However, the company's gross profit margin took a hit due to changes in inventory reserves estimation, costing the company approximately $119 million. Additionally, increased product costs and elevated supply-chain expenses were not offset by higher prices.
This unexpected loss poses a challenge for Advance Auto Parts as it navigates the ever-changing automotive market. Despite the setback, the company remains committed to optimizing its operations and ensuring a strong financial performance moving forward.