Advance Auto Parts To Close 50 Stores -- Despite Increased Second-Quarter Earnings

Jose Florez

The auto parts retail giant has seen a spike in earnings so far this year.

According to Bloomberg, financial results for Advance Auto Parts confirm a 9 percent increase per share for the second-quarter of 2015. On Thursday, the stocks rose over $15 a share. The increase in earnings have raised a few eyebrows -- especially from analysts.

However, despite the increase in earnings, Advance Auto Parts is reportedly getting ready to close down 50 stores. Stores that are under-performing are said to be the ones that will close down, according to reports. In addition, almost all the job cuts will be related to the integration of General Parts International.

The stores are expected to close by the end of 2015, as Nasdaq.com reports.

In light of unexpected increased earnings and the shutdown of many stores, Darren Jackson, CEO of Advance Auto Parts, told financial analysts of the company's goals for the rest of 2015.

"The biggest takeaway is the need to eliminate or simplify our work and deliver what matters most to our customers. With this focus, we see an opportunity to achieve 12 percent faster, and have now challenged ourselves to get there by the end of 2016."
"While performance management will improve many of our outlier stores, closing stores is required on the chronic under performing and unprofitable stores."

Nasdaq.com explains as follows.

"For fiscal 2015, Advance Auto Parts affirmed its forecast for comparable cash earnings in a range of $8.10 to $8.30 per share. The Street expects the company to report earnings of $8.26 per share for the year.

"AAP closed Wednesday's trading at $172.00. In Thursday's pre-market activity, the stock is up $0.59 or 0.34 percent to $172.59."

"AAP closed Wednesday's trading at $172.00. In Thursday's pre-market activity, the stock is up $0.59 or 0.34 percent to $172.59."

Some believe that since Amazon replaced stores like Radioshack, online stores could soon take over the auto parts industry as well. Although it sounds plausible, Advanced Auto Parts continues to dominate the auto parts industry, even despite all the store closings.

[Photo via Advanced Auto Parts]

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