The second-quarter profit of Advance Auto Parts took a hit as the company struggled to adjust its prices to match rising costs. The aftermarket car-parts retailer reported a profit of $85.4 million, or $1.43 a share, for the three months ended July 15. This is a decrease from last year's $144.4 million, or $2.38 a share. Analysts had expected earnings of $1.69 a share.
Despite the decline in profit, sales managed to increase slightly by 0.8% to $2.69 billion, surpassing the expected $2.66 billion. However, same-store sales, which factor in store openings and closings, dropped by 0.6%. Additionally, the cost of sales rose by nearly 4%.
Advance Auto Parts' Chief Executive, Tom Greco, acknowledged that the profitability fell short of expectations due to their inability to adjust prices to compensate for inflation. However, he expressed optimism about the positive impact of strategic investments on the company's revenue and transactions. This optimism was supported by the growth seen in same-store sales during the final month of the second quarter, which has continued into the start of the current quarter.
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