Down Despite Deal Progress

Advance Auto Parts had a rough day…and that’s putting it lightly. Let’s look at what the auto parts retailer said that caused the worst one-day selloff in its history. 👇

Adjusted earnings per share of $0.72 widely missed the $2.57 expected by analysts. That’s despite revenues of $3.42 billion, only missing estimates by $0.01 billion. Not only did the significant miss cause executives to rethink their full-year guidance, but the board of directors reduced the quarterly dividend from $1.50 to $0.25 per share. ✂️

They now expect full-year adjusted earnings per share of $6.00 to $6.50, down from a previous range of $10.20 to $11.20. That comes as it reduced its sales expectations by a range of just $200 to $300 million, signaling margin troubles. For the foreseeable future, higher-than-expected costs for its professional sales, inflationary pressure, supply chain issues, and unfavorable product mix will continue to pressure results. ⚠️

Analysts believe AAP’s business model has structural issues preventing its operational teams from driving solid results. In a highly competitive space like auto parts, it’s simply not possible to skate by. And it’s clearly losing market share to O’Reilly Automotive and AutoZone, among others.

$AAP shares fell 35% and are near their 2020 and 2017 lows. 📉

It was a massive day of tech earnings, but we’ll do our best to recap some of the biggest movers.

First up is C3.ai, which failed to live up to the recent hype. The company’s fourth-quarter adjusted loss per share of $0.55 on revenues of $72.4 million topped the $0.13 on $71.3 million in revenue consensus view. However, its fiscal 2024 revenue guidance of $295 to $320 million was shy of analysts’ $317 million estimate. While the results were positive, if your shares are up over 200% this year, you must beat on all metrics to maintain your momentum…, especially in this market. Unfortunately, the company didn’t, so $AI shares are falling 16% after hours following a 9% regular-session decline. 🤖

Next is Salesforce, which beat estimates and raised its full-year earnings guidance. The software giant reported adjusted earnings per share of $1.69 vs. the $1.61 expected. Its revenues of $8.25 billion also topped the $8.18 billion estimate. Like other tech giants, the company has been reining in costs to boost earnings amid slowing revenue growth. As a result, executives raised their fiscal year 2024 revenue forecast to $7.41-$7.43 per share. However, they left their revenue forecast intact. $CRM shares are volatile after hours but down about 5% currently. 🌧️

Then there’s Crowdstrike, which beat estimates but reported slowing YoY revenue growth. The cybersecurity firm reported adjusted earnings per share of $0.57 on revenues of $692.6 million. That compared to $0.51 and $676.4 million anticipated by analysts. Despite revenues growing 42% YoY, investors are concerned about the deceleration from last year’s 61% growth. As did executives’ current quarter revenue guidance of $717.2 to $727.4 million, which was mixed vs. the $698 to $742 million consensus range. $CRWD shares are down 12% after hours. 🔻

And finally, Chewy topped estimates. The online pet retailer’s adjusted earnings per share of $0.05 and revenues of $2.78 billion beat the $0.04 per share loss and $2.73 billion in revenue anticipated. In addition, the company said gross margins were up one percentage point. Meanwhile, net sales per active customer and sales from auto-ship customers reached record highs. $CHWY shares rose 12% after hours. 📦

Let’s see how clothing retailers are faring this earnings season. 👚

First, we’ll start with Nordstrom, which beat on the top and bottom lines.

The department store’s adjusted earnings per share of $0.07 beat the $0.10 loss anticipated by analysts. Revenues of $3.2 billion also beat the $3.1 billion expected. 🏬

The company saw sales decline YoY across most categories, though activewear, beauty, and men’s apparel were above-average performers. Gross margins also jumped 1.1% YoY as the company pared down its inventory levels. 🛒

Despite the challenging macroeconomic environment, executives remain optimistic due to their higher-end customer base. As a result, they reiterated their fiscal 2023 outlook. They now see revenue declines of 4% to 6% YoY and adjusted earnings per share of $1.80 to $2.20.

Shares of $JWN are up about 7% after hours, offsetting a similar regular session decline. 🤷

Meanwhile, PVH is extending its losses after hours following mixed results.

The Calvin Klein parent’s adjusted earnings per share of $2.25 on revenues of $2.16 billion beat the anticipated $1.94 and $2.12 billion. The company also reaffirmed its full-year guidance for 3% to 4% revenue growth and adjusted earnings per share of $10.

However, where the issue came in was the company’s rising inventories. That number rose 24% YoY due to what executives said were “abnormally” low levels in the first quarter of 2022, early receipts of inventory, and higher product costs. 📦

Other companies have been reducing inventory aggressively at the expense of their margins. So investors are concerned about potential inventory mismanagement impacting future results here.

$PVH shares are down about 3% after hours. 🔻